Tag Archives: small business

Creating Jobs Through Small Businesses

By Congressman Steve Austria

If we want to get serious about our nation’s unemployment crisis, we must provide certainty in the marketplace and look at how to help our job creators, and small business owners. One economic booster to get people back to work is through small business growth as these small businesses and farms help create about seven of every ten new jobs in America. To jump start our economy and get Americans back to work, Washington must also do its job by stopping all the wasteful borrowing and out-of-control spending; reducing taxes; removing the Washington red tape and the burdensome regulations; put an energy policy in place that has less reliance on overseas foreign oil; and finally addressing the government health care reform issue by focusing on lowering the cost of healthcare for hard-working families and small businesses.

A 2010 study by the Small Business Administration found that small businesses were disproportionately affected by federal regulations with an annual regulatory cost per employee that is 36 percent higher than the costs facing large firms. Additionally, whether a small business pays taxes at the corporate or individual level, it can face up to a 35 percent federal tax rate. Recently, I supported legislation that Congress passed, which will enable small businesses with fewer than 500 employees to use extra capital to invest, grow, and create more jobs through a 20 percent tax deduction.

During a time when job growth has stunted we cannot allow for the federal government to raise taxes on our job creators and impose unnecessary regulations – all which stifles job growth. It is our small businesses that are the backbone of our economy.

JOBS Act Passes U.S. Senate, Several Amendments Opposed by Small Business Leaders

The National Small Business Association applauded the Senate for bipartisan passage (73-26) of the JOBS Act late last week. Although not identical to the House-passed version, the amended Senate bill will, without question, positively transform the ability of small businesses to raise capital and help companies generate sustainable economic growth and jobs.

“There is a direct correlation between job growth and small-business owners’ ability to garner financing,” stated NSBA President and CEO Todd McCracken. “This is the right bill at the right time, and we applaud the Senate for moving beyond partisan politics to pass this very important legislation.

Small Business & Entrepreneurship Council (SBE Council) president & CEO Karen Kerrigan issued the following statement upon U.S. Senate passage of the JOBS Act:

“Startups and high-potential businesses have been plagued by a capital chasm since the financial crises, and the JOBS Act offers several reforms to help entrepreneurial firms at their various stages of growth and development. We would prefer that the crowdfunding provision be less onerous and complex, and feel the Securities and Exchange Commission has been given to much rein from a regulatory perspective (Reed amendment). Still, the Merkley amendment to H.R. 3606 was an improved measure from the original Senate bills. We applaud President Obama for his support of this initiative, as well as the bipartisan collaboration in Congress that made this legislation possible,” said Kerrigan.

According to Kerrigan, the final product will be a powerful package with significant benefits for the small business community. Other reforms contained within the JOBS Act will help small businesses access and accelerate their growth in the public markets. Inflexible and costly rules impeding the growth of promising enterprises are properly addressed in H.R. 3606, allowing these firms to more efficiently scale up while freeing up more resources for investment and job creation.

“A strong entrepreneurial ecosystem depends on access to capital. Freeing up new sources of capital – as the JOBS Act will do – will strengthen our nation’s small business sector, and add to their job creating capacity,” added Kerrigan.

Majority Leader Eric Cantor (R-VA) said the U.S. House would vote on the Senate amended package early next week.

However, prior to the Senate vote, Kerrigan stated opposition to both the Reed and Merkley amendments for the following reasons:

“The Reed Amendment (#1931) proposes a significant policy change that will burden small businesses with new and costly Security and Exchange Commission (SEC) registration and compliance burdens. The intent of H.R. 3606 is to help jumpstart and encourage entrepreneurship, small business growth and investment – not drive up their costs. The Reed Amendment eviscerates Section 601 of the legislation for community banks, which means they would be deprived of the opportunity to raise capital. That means less lending to the communities and small businesses they serve.

“The Merkley Amendment (#1884) unnecessarily restricts the potential of crowdfund investing. The Amendment imposes excessive costs and burdens on small issuers, provides for unfettered regulatory activity by the SEC, and is too restrictive and complex when it comes to setting and defining investment limits. For example, audit requirements in the Amendment represent a significant barrier to entry (a “crowdfunding tax”) that many promising and eligible small businesses will not be able to afford. Why require an audit for the smallest of firms when a CPA review would do? With respect to SEC oversight, the Amendment goes overboard in granting the agency profound authority. The potential for regulatory intrusiveness is a major concern, particularly as the SEC has not demonstrated a consistent record of action in responding to the concerns of small businesses. SBE Council believes the $1 million cap in the Amendment is too low, and the caps on individuals are far too complex.”

If the amended JOBS bill is passed by the House, it is still expected more small businesses and start-ups will get the adequate funding they need, more jobs will be created, and a healthier pro-business environment will be created.

Small Business Group’s Response to President Obama’s State of the Union

In response to President Barack Obama’s State of the Union address, the nation’s leading organization dedicated to promoting entrepreneurship and protecting small business issued the following response:

“Entrepreneurs are heartened to hear that President Obama wants to make the U.S. the best place on earth to do business. Indeed, across the globe, nations are cutting taxes, simplifying their tax systems and reducing regulations to make it easier to start up and grow a business. Developed and emerging countries alike have quickly adapted to the competitive environment and are reaping rewards in their aggressive efforts to attract capital and business investment. President Obama has awoken to this realization, and mere rhetoric alone will not change the competitive dynamic. Entrepreneurs and investors must now see dramatic changes on the policy front. This means, immediately locking in a pro-growth tax system, restraining the regulatory tide that is sweeping over every sector of our economy and reducing government spending,” said Small Business & Entrepreneurship Council (SBE Council) President & CEO Karen Kerrigan.

SBE Council chief economist Raymond J. Keating added: “While the President’s pro-business rhetoric is encouraging, other specifics in his speech were disappointing. First, his explicit call for a tax increase on upper-income earners showed that he still fails to grasp that such a tax hike on entrepreneurs and investors would be bad for the economy. Second, his call, in effect, for higher taxes on oil companies in order to subsidize other energy sources reveals a desire for politics to overrule markets, with the result being higher costs in the end. And third, he took one step forward on trade, by urging Congress to approve the South Korea trade deal, but two steps back by failing to push ahead now with the Panama and Colombia accords.”

Kerrigan concluded: “We look forward to working with President Obama and Congress in the critical areas of reducing regulation and simplifying the tax system. Leadership and action are desperately needed on these issues if the U.S. is to become more competitive in the global economy. Furthermore, small business owners have substantive ideas for improving the health care overhaul bill that was enacted into law. We only hope the Administration will listen to our solutions this time around.”

SBE Council is a nonpartisan, nonprofit advocacy and research organization dedicated to protecting small business and promoting entrepreneurship.

Ready To Start A Business? The Ohio’s Small Business Development Centers Partnership with SCORE Could Help

Two organizations are using their combined strengths to offer extensive quality training and assistance to start-up businesses. The Small Business Development Centers (SBDC) of Ohio are partnering with SCORE’s Southern Ohio District to offer services that will encourage small businesses to grow, expand, and increase productivity, providing long-term sustainable success.

The Small Business Development Center of Ohio Network was created in 1985 through a partnership between the U.S. Small Business Administration and the Ohio Department of Development. The SBDC provides quality in-depth business management consulting, training and technical assistance.

SCORE was organized in 1965 and is a resource partner of the U.S. Small Business Administration. It is a nonprofit organization whose 13,000 national volunteers are successful entrepreneurs and executives who share their “no cost” expertise to start up and in business clients. Some volunteers have mentored their clients for more than 10+ years.

Both Ohio’s SBDC’s and SCORE’s Southern Ohio District will provide counseling and mentoring to individuals and groups where knowledge and guidance are shared from previous experiences, and will host informational seminars and workshops coaching and educating businesses about available services and resources, maximizing business potential.

“Our focus is to educate and guide businesses about the opportunities and resources available, putting the right tools in their hands and allowing company owners to benefit and strengthen their bottom line,” said Karen Shauri, State Director of SBDC of Ohio. “This partnership increases our network reach and maximizes both organizations’ strengths and talents.”

To accomplish these objectives, the Ohio SBDC program links federal and state government resources and local public/private nonprofit resources to meet the needs of the small business community.

“The combined business objective of our partnership is to help strengthen our clients’ opportunities for successful growth and profitability” said Mary Jane Good, SCORE’s Southern Ohio District Director.
The focal point of the collaboration is small business development. This joint effort will enable the organizations to maximize resources to best reach goals. By partnering two organizations, Ohio’s business community can have access to a wide variety of resources, furthering economic growth and success.

The SBDCs foster a strong climate for small business growth with many local community partners including colleges and universities, economic development agencies, chambers of commerce, and other community organizations. In 2010, SBDCs served more than 25,000 clients and assisted with 432 business starts.

SCORE has strong business partnerships with Chambers of Commerce, various universities, schools, libraries, city officials, and organizations. Since October 1, 2010 the Southern Ohio District has provided more than 2,695 services to interested individuals in the form of face to face, online counseling, and seminars. The District has Chapters in Columbus, Dayton, Greater Cincinnati, Newark, Chillicothe and Marietta.

President Obama Announces “New” Regulatory Strategy, SBE Council’s Kerrigan Responds

President Obama released a new regulatory strategy today, which hopefully will lead to less regulation on small business owners and more accountability in the regulatory agencies said a national small business advocate. According to Small Business & Entrepreneurship Council (SBE Council) President & CEO Karen Kerrigan, an effective strategy would immediately take steps to reform or scale back both existing and proposed regulations.

“The new and improved regulatory approach outlined by President Obama in his Executive Order and Presidential Memorandums will certainly recognize the staggering cost burdens inherent in the new health care law, for example, and other initiatives underway at EPA and the Department of Labor,” said Kerrigan. “That being the case, we await a new attitude across the entire federal government in listening to small business concerns and offering alternatives or exemptions,” she added.

SBE Council’s Kerrigan sees an opportunity for the White House and Congress to work together on reducing regulation and advancing reforms to modernize and alter the regulatory process. For example, the House Committee on Government Oversight and Reform is embarking on an initiative to identify both existing and proposed regulations that are an impediment to job creation, small business growth and economic recovery. Chairman Darrell Issa (R-Calif.) also plans to study various reform ideas to accomplish what the President hopes to do through his Executive Order and twin Memorandums.

“If the President and his team are genuine in what they want to accomplish for small business, and we believe that to be the case, then he and Chairman Issa are on the same page,” said Kerrigan.

President Obama’s new regulatory strategy includes several things, including a commitment to enforce existing law with regard to the obligations that government department and agencies have to small business when new regulations and proposed; more transparency, access and reporting from Federal enforcement agencies as they relate to investigations and compliance; and, a “to do” list for regulatory agencies focusing on how they will go about streamlining the regulatory process, identifying outmoded or duplicative regulations, improving the effectiveness of regulations, and lessening burden, among other directives.

“The President expressed a commitment to small business owners in announcing his new regulatory strategy. He must execute on this promise,” said Kerrigan. “Entrepreneurs remain on edge about the costs of new laws and other regulations coming down the pike. They are expecting more costs and red tape from Washington. Given that set of expectations, they will not add jobs or aggressively invest in the growth of their businesses,” she concluded.

Small Business Lending Fund Update

The U.S. Department of the Treasury (Treasury) is expected to soon release the criteria small banks must meet in order to participate in the $30 billion Small Business Lending Fund (SBLF) created by the NSBA-supported Small Business Jobs and Credit Act.

Meanwhile, Sens. Mary L. Landrieu (D-La..), chair of the U.S. Senate Committee on Small Business and Entrepreneurship, and George LeMieux (R-Fla.) recently sent a letter to Treasury Secretary Timothy Geithner, urging swift implementation of the SBLF and the State Small Business Credit Initiative, which was created by the same legislation.

NSBA echoes this call for immediate implementation. The SBLF has been on the drawing board for long enough. It is high time that it be deployed. America’s small businesses still are struggling through a destructive credit crunch and the realization of the SBLF stands to help the situation.

According to an internal poll conducted by the Independent Community Bankers of America (ICBA), nearly a quarter (24 percent) of their 5,000 community-banks members planned to utilize the SBLF. This means 1200 community banks stand poised to increase their small-business lending.

NSBA joins Landrieu and LeMeiux in urging Treasury to expedite the realization of the SBLF and State Small Business Credit Initiative.

Source: NSBA, December 7, 2010

Health Care Reform Consensus: It Will Harm Millions of Small Businesses

By Daniel Downs

Small business employs more people than large corporate establishments. By comparison, small businesses employ 50.2 percent of all American workers, while large corporations employ only 49.8 percent. Depending on the statistical source used, the number of Americans employed by small businesses is between 60 to 69 million. Self employed entrepreneurs make up between 32 to 38 percent of small businesses.

Small businesses also lead the nation in creating new jobs. According to Small Business Trends, two-thirds of all new jobs are created by small business. http://smallbiztrends.com/2009/11/who-creates-the-most-jobs.html

So why do Congressional Democrats favor the interests of big business? Why does their health care reform legislation give them large deductions for self-insured health care? One answer might be elite the liberal Congressional millionaires maybe attempting to protect their investments self-insuring corporations. Another possibility maybe that big corporations have better lobbyists, but who cares?

The largest and best employers in America are overwhelmingly opposed to Congress’ health care reform legislation. They oppose it not only because it gives unfair breaks only to large corporations but also because it will raise the cost of doing business, and threatens the ability of small firms to grow their business and create new jobs.

One aspect of the legislation specifically targets the construction industry, according to the Small Business & Entrepreneurship Council. “The bill singles out the construction industry by not exempting businesses in this sector from the “play-or-pay” employer mandate that other firms with 50 or fewer employees are exempt from.” Interestingly, the government defines small business as firms with 500 or less employees. Consequently, many other small businesses will be adversely affected by the unfunded mandates.

About one-third of the 22 million self-employed cannot even afford health insurance. Those who do purchase health coverage have experienced double-digit premium increases every year, making it difficult to retain insurance, according to the National Association for the Self-Employed (NASE). Because the Senate tabled an amendment that would have given a 50 percent deduction to small businesses, the cost of adequate health care will continue rise if the Democrats health care bill passes.

As outlined by the National Federation of Independent Business (NFIB), Congress’ health care reform will significantly increase the cost of health care to small businesses in the following ways:

The legislation includes a new $60 billion tax that falls almost exclusively on small business because the fee (tax) is assessed on insurance companies, which is confirmed by the Congressional Budget Office. This cost will be passed on to small business in the form of higher premiums, at least 10 percent higher. The cost of health care insurance is already 18 percent higher for small businesses than for large corporations. And, as previously stated, the new legislation exempts self-insuring large corporations from the additional costs.

Because employer mandates assess multiple penalties based on the income of full-time employees, there will be job loss, greater reliance on part-time employees, and harm to entry-level and low-wage workers.

The new reporting requirements increases administrative costs by $17 billion.

Small business with high rates of employee turnover may be put out of business because of a $600 fine for not providing all employees health insurance within 60 days.

Congress’ health care reform also limits previous cost saving options like tax-exempt Health Savings Accounts.

According to Small Business Coalition for Affordable Healthcare, a government-run health care plan cannot compete fairly with the private market and threatens to destroy the marketplace, further limiting choices.


One thing is certain; the health care reform of congressional Democrats will be neither affordable nor free-market friendly. Those are a few reasons why small businesses should petition their representatives. Small business owners can also sign the SBECs “Not On Our Backs” Small Business Health Care “Not On Our BacksPetition to voice their opposition to the proposed national health care legislation.

Mandating Higher Insurance Costs

By Marc Kilmer

At a time when the U.S. Senate is debating legislation that will supposedly bring down health insurance costs for Americans, the state House of Representatives just passed legislation that would hike these costs. While this legislation was passed with the best of intentions, it’s effect will be to hurt small businesses and lead to more uninsured in the state.

The legislation at question is two bills that mandate insurance companies cover treatment for autism (up to $36,000 a year) and treatment for diabetes. Some Ohioans will certainly benefit from these mandates and will find their costs for these treatments decline. The benefits from the legislation aren’t the whole story, though. The wider harm caused to everyone else that has health insurance was disregarded by legislators who promoted these measures.

Treatments for autistic children can be very expensive. Parents of these children understandably want someone else to help share their burden. Likewise, coverage for diabetics can cost a lot of money. But this legislation doesn’t really force insurance companies to pay for these treatments. Instead, legislators have forced everyone who has insurance to pay for them. Insurance companies don’t just print money to pay for services. They get money from the insurance premiums you pay. If they need more money, they raise the price of premiums.

While not the intended effect, if these bills become law it will lead to higher prices for health insurance in Ohio. Not all health insurance will be affected, though. Big companies that provide their own insurance aren’t covered by state law. Small businesses and individuals who purchase their own insurance are the ones who will be paying for this legislation.

Ohio has seen many small businesses close their doors or lay off workers in the past couple years. Business owners are cutting cut costs to stay in business. Even a modest price increase for health insurance will likely mean that some will drop such coverage completely. The result will be more people without insurance in the state. For those companies that do decide to keep insurance, it will mean either less profit for employers or lower wages for employees, both of which are especially unwelcome during a recession.

Ohio already mandates that insurance companies must cover a number of procedures, artificially raising the cost of insurance. For instance, even if you believe that chiropractors offer few legitimate medical treatments, your insurance must cover their services. Or even if you’ve never touched a drug in your life, state legislators mandate that your insurance cover drug addiction treatment. But compared to other states, Ohio does pretty well. Legislators have been steadily adding to these mandates over the years, though, and the governor wants even more regulation of health insurance. At the same time, these same politicians decry the rising cost of health insurance, even though they are directly responsible for part of this price increase.

All this is not to say that insurance should not cover treatment for autism or diabetes. Health insurance consumers should have the freedom to buy such insurance if they wish. But if you want to pay lower prices for a policy without such coverage, you should be free to do so, too. Not every one wants, or can afford, a policy that covers every disease or treatment. Ohioans should have the freedom to shop for insurance policies that meet their budgets and their medical needs. The Ohio House of Representatives wants to take that freedom from you, though. If this were the automobile market, it would be like legislators saying that if you don’t buy a Cadillac, you can’t own a car at all. For some people, a Kia works just fine.

The best way to help health insurance consumers is to remove government mandates and allow health insurance companies to tailor policies to meet individual consumers’ needs. Imposing politically-driven restrictions on insurance drives up the cost for all and helps only a very few. That’s not the kind of health insurance reform Ohioans need.

Marc Kilmer is a policy analyst with the Buckeye Institute for Public Policy Solutions, a research and educational institute located in Columbus, Ohio.

Small Business Outlook on the Economy

The latest Discover Financial Services “Small Business Watch” survey was released on Monday, August 31. The best that can be said seems to be that small business owners’ lack of confidence in the economy may have bottomed. Clearly, the readings from small businesses are still anything but rosy.

A few key findings on the August survey:

• 43% of small business owners believe the economy is getting worse – the lowest level in the survey’s three-year history – while 38% see it getting better. Meanwhile, 15% see it staying the same.

• 48% of small business owners ranked the economy as poor, 41% fair, and only 9% as good or excellent.

• As for their own firms, 30% saw economic conditions improving, 43% getting worse, and 23% unchanged.

• In addition, 27% of small business owners said they were going to boost spending on business development, 43% said reduce, and 25% no changes.

The only real positive that can be pulled from this survey is that the negatives were a bit less negative than in recent months. According to this poll, most small business owners clearly are still quite sour on the economy.

Considering the importance of small business to economic growth, innovation and job creation, perhaps our elected officials at the federal, state and local levels should take note. Rather than focusing on big spending programs, a pro-growth course includes tax and regulatory relief to help reinvigorate confidence and investment among our nation’s entrepreneurs.

That, however, would require a major shift in thinking among many in power right now. For example, the current plan is to sock America’s entrepreneurs and investors with higher personal income, capital gains, dividend and death taxes over the coming 16 months, while also increasing energy and health care costs in the future. That is anything but pro-small business, and therefore is bad for the economy.

Source: Raymond J, Keating, Small Business & Entreprenurial Council News, September 3, 2009