It's all in your head: feeling optimistic or pessimistic about the state of the economy? Uncertain times like these can really mess with your mind. Here's what other entrepreneurs are doing to keep it together—and keep moving ahead

Entrepreneur, Jan, 2005 by Chris Penttila

It's surreal--and exhausting--to ponder how much our country has been through over the past five years. The dotcom boom. The controversial 2000 presidential election. The dotcom bust. 9/11. Enron. Iraq. Janet's "wardrobe malfunction." The list goes on.

These strange times can mess with an entrepreneur's head. As we hit the midpoint of the first decade of the new millennium, chances are you're either feeling exceedingly optimistic or somewhat pessimistic about how things are going.

There are plenty of people on both sides of the fence. Economic pessimists point to disappointing job-growth figures, an increasing number of bankruptcies, shaky consumer confidence and anemic investment as indications that the times are bad and getting worse. As of September, 724,320 job cuts had been announced--higher than every year-end total prior to 2001, according to Chicago-based global outplacement firm Challenger, Gray & Christmas Inc. The Economic Cycle Research Institute, an independent forecasting group in New York City that releases a weekly report gauging growth in the overall economy, concluded economic growth fell to an 81-week low this past October as mortgage applications slowed and more people filed initial jobless claims.

"I have never been so pessimistic in making any [economic] forecast since 1981-82," says Robert H. Parks, economist and professor of finance at Pace University in New York City, and author of Unlocking the Secrets of Wall Street. Parks doesn't see evidence of a sustained economic recovery. Instead, he sees the specter of rampant asset inflation concerning housing and stocks, skyrocketing deficits, and a war with no end in sight. "The biggest single problem of the business community [in 2005] will be uncertainty," he says. "Trying to make a small business blossom over the next 18 months is going to be a very rough job."

Economic optimists, on the other hand, point to 11 straight quarters of economic growth, low inflation and interest rates that remain at historic lows as signs that the times are good and getting better. So while the job market may not be growing as quickly as expected, it is still growing.

SurePayroll--a Skokie, Illinois-based national provider of payroll services exclusively for small businesses--collects hiring and wage data from its 13,000 clients, and estimates that although the average small-business paycheck has dropped 3.3 percent year-to-date, the average head count grew from 5.5 to 5.6 employees between the second and third quarters of 2004. "Hiring has increased at small businesses across the country," says Michael Alter, president of SurePayroll, "which bodes well for saying the economy is recovering."

GLASS HALF-FULL OR HALF-EMPTY?

Entrepreneurs form their worldviews not from surveys, but from what they see happening around them. For Nate McKelvey, it's been a wild ride since he started Quincy, Massachusetts-based online luxury jet charter company CharterAuction.com in 1999. McKelvey, 35 hit the tail end of the VC boom and bootstrapped the company for most of 2000. At the same time, a now-defunct competitor received $35 million in venture backing. "I was thinking I had a horrible idea at the absolute wrong time," he says.

But 9/11 spurred a flurry of bookings that helped CharterAuction.com close 200l with sales of $1.2 million. Today, the 25-employee company books luxury jets for highfliers ranging from Wall Street executives and celebrities to political bigwigs including Bill Clinton and Rudolph Giuliani.

McKelvey describes CharterAuction.com as a survivor that's made every penny count. He's encouraged by the company's international business, which has increased from 8 to 15 percent of the company's total business over the past two years. CharterAuction.com projects sales of more than $15 million in 2004 and hopes to maintain 60 percent annual growth in 2005. Even VCs are leaving voice mails, a sign things have come full circle.

Life isn't worry free, however: Rising oil prices and wide fluctuations in the stock market have required CharterAuction.com to adjust its marketing strategy to promote aircraft availability over price. "From my perspective, [the glass] is more than three-quarters full," McKelvey says. "For people who stuck it out, the nuclear winter is over."

Still, entrepreneurs can feel weighed down by all the instability at home and abroad. Melissa Wayne is co founder of 3 Oh! 5 Creative Inc., a 9-year-old postproduction company in North Hollywood, California, that produces movie trailers, TV spots, broadcast marketing pieces and bonus features for DVDs. Business boomed after 9/11 as people sought escape through movie rentals, but Wayne, 53, can't escape reality. She is troubled by issues ranging from the war in Iraq and the soaring national debt to the way other countries view the United States.

"There are so many changes going on. It's going to be a rocky road for quite a while," she says. "My reaction after 9/11 was that the world as we know it is over." Running a small company that can adapt quickly to market changes gives Wayne some confidence about the new millennium, but she's staving off major capital improvements and won't expand her staff of 4o until things seem more stable.