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5 Issues Affecting Businesses In The Election

Tuesday, July 10th, 2012

Presidential Election 2012Although I try not to talk politics, there are times when it can’t be ignored. GAWDA members, like all business owners, are paying close attention to the upcoming Presidential election. One distributor told me last week that he was looking forward to November. And of course, the Supreme Court’s recent decision on the health care law has only heightened the discussion of how the elections will impact businesses.

Paychex recently published its list of the issues that are of greatest importance to small business owners as we hurdle toward Election Day. “As campaigns for elected office intensify between now and November, it is important that the issues small business owners care about are included as part of the national debate,” said Martin Mucci, Paychex president and CEO. Here are their top five issues in order:

1. Taxes: Provisions that could impact small businesses include: the continued viability of business structures (such as S-corps) largely intended to provide insulation from certain types of tax; the possible scaling back (or conversely, creation) of certain tax breaks targeted specifically to businesses; the ongoing potential for increased unemployment tax burdens on businesses; and the general question of whether the basic federal business tax rate should be adjusted.

2. Overall Regulatory Burden: In addition to taxes, the existence of a “business-friendly” environment, also referred to as freedom from undue regulatory burden, is usually seen as a primary factor in a small business owner’s appetite for expanding and/or investing in his or her business.

3. Employment Regulations: Worker-focused regulations include an increase to the federal minimum wage, the creation of additional “protected” categories during the hiring process, steps to ease the formation of labor unions, and other items which might not garner broad support from the business community.

4. Immigration: A key focus of the immigration debate will likely be the extent businesses should play a role in managing and enforcing immigration policy through hiring practices.

5. Retirement Security: There is growing concern over the inadequacy of retirement savings for many Americans and the possible role that some think employers could play in a mandated solution such as an Auto IRA program or other similar option.

While taxes are always an issue, the one item that really stood out to me was the overall regulatory burden. This is something about which I’ve held many conversations with GAWDA members. In the gases and welding environment, there are many regulatory bodies that distributors must pay attention to, including DOT (and its FMCSA and PHMSA administrations), FDA, OSHA, EPA and so forth. Thank goodness for GAWDA’s consultants to help make sense of it all!

What is the top issue in the upcoming elections as far as your business is concerned?

Good News For Small Businesses

Tuesday, June 28th, 2011

Last week brought good news for small businesses, as the government reported record numbers for contracting dollars spent with small businesses. In Fiscal Year 2010, ending September 30, 2010, small businesses won $97.95 billion in federal contracts, which translates to 22.7 percent of government contracts. This is the closest the government has come recently to its contracting goal of 23 percent.

In speaking to GAWDA members, I have learned that government contracts can be a complicated business. In the recent article, “Small Business Scramble,” Jim Earlbeck, president of Earlbeck Gases & Technologies, told Welding & Gases Today, “It’s a moving target.” However, as the numbers above show, it can also be profitable.

With contracting moving to the Internet over the last few years, the game has changed. For some, this means opened doors to contracts that were not easily accessible before. For others, it means increased competition.

If you’re interested getting a piece of the nearly $100 billion dollars that go to small business contracts, start by checking out “10 Steps to Winning DoD Contracts.” Also check out Federal Business Opportunities at fbo.gov, where you can search available contracts.

What’s your experience like working with the government? Share by leaving a comment.

Speed Dating for Businesses

Tuesday, October 12th, 2010

Photo courtesy of mrleroneThe West Virgina Small Business Administration recently turned matchmaker when it borrowed the concept of speed dating to help small businesses find loans. Companies spent six minutes each with various lenders to find their perfect match. The meet-ups not only helped companies find lending options, it gave them the opportunity to ask general questions about putting a loan package together.

I thought this was not only a great way to help businesses get loans, but I thought it was a very unique idea. It got me wondering if something like this could translate into a customer interface. What if you were given six minutes with a series of customers, while they hopped from you to your competitors. Would your company stand out above the others?

There’s an important point underlying the SBA event. The six minute meet and greets were not only used for banks to push their own interests, but also to help borrowers understand the lending process and what goes into loan packages. The point is, if you are given six minutes, if you can help a customer, solve a problem of theirs, give them a better way to accomplish their work, chances are they’ll remember you.

So what do you think? How would you distinguish your company? Could you sell your real value in six minutes?

Proof That Economic Recovery Is Here

Tuesday, October 5th, 2010

On Monday, I attended an economic trends webinar called “Recovery—Are We There Yet?” presented by Jeff Dietrich, an economist with the Institute for Trend Research. He offered encouraging news about the direction of the economy over the next year. Perhaps most important, he says we are not headed for a double-dip recession, or a W-shaped recession. The recovery may not be quick, but it is actively happening.

Also of note, Dietrich says medical equipment and supplies production is one of the strongest sectors the U.S. economy. This is good news if you supply medical oxygen and other gases. While U.S. industrial production rates dipped to around -14% year-over-year at the worst part of the recession, medical production never went below 0%. He projects a 4.5% increase for 2011.

Medical Equipment & Supplies Production
More good news: customers have money to spend. The problem is they are cautious about spending it. Through the recession, customers have been stashing their money, building their personal savings up to record levels. During normal economic levels, Americans keep somewhere around $250-300 billion in their personal savings. Through the recession, personal savings hit levels upwards of $900 billion, and they currently rest at $650 billion. Dietrich says an additional $4 trillion is available in credit cards and home equity line of credit loans. This means that as the economy returns to normal levels, customers will have money to spend. That’s good news for all of us.

Personal Savings

Will the Small Business Jobs Act Work?

Wednesday, September 29th, 2010

Barack Obama Signs Small Business Jobs ActThe Small Business Jobs Act was signed into law on Monday. The new legislation could have an impact on many GAWDA members, seeing as many members fit the category of small businesses. And while the main feature of the act is $30 billion in lending, it is called the Jobs Act, not the Loans Act. The target is 500,000 jobs, and it hopes to help small businesses create those positions by offering access to credit, tax cuts for hiring and write offs for buying equipment.

Is this enough for to get small businesses hiring? We’ll find out soon enough. One thing’s for sure—the Jobs Act has no shortage of skeptics.

A lobbyist for the National Association of Wholesaler-Distributors (NAW)—a GAWDA-affiliated association—is quoted by the Associated Press as saying, “Business doesn’t need credit. Business needs customers. If they don’t have a customer base because demand is down, they’re not going to borrow, because there is nothing for them to borrow for.”

The American Small Business League suggests creating this customer for small businesses by allotting a larger portion of government contracts to smaller companies. “Considering the current state of our economy, I can’t imagine why President Obama and Congress would not support legislation to stop giving small business contracts to large and Fortune 500 firms,” says ASBL President Lloyd Chapman.

Clearly, small business advocates want customers before they will justify spending. Just as customers have tightened their belts, companies have worked to operate leaner and leaner. Who will take the leap and start spending again? We are faced with a chicken-egg situation between customer spending and business spending, and neither side wants to go first.

So how big will the impact be? One GAWDA member I spoke with said it would impact his company very little, since the company is not quick to take out loans. What about you? Will your company take advantage of the new legislation?