Small businesses are engine that makes nation go
Is there anyone left who does not know that small business is the most significant growth vehicle for our economy?
Small business drives creativity in the economy, moves at the speed of change, and innovates faster than its larger multinational competitors can manage change.
Yet, small business remains the invisible partner when it comes to the kind of state and federal needs it has, needs that feed economic growth when satisfied.
Allow me to mention just a few of the obstacles faced by the true small business.
Try accessing the federal procurement process as a small business, and you will discover that, should you get through the registration process, and even be awarded a contract, holding onto that contract against large business is almost impossible.
Additionally, the federal government also does too little to protect new patents for innovative products developed by small business. The multinationals redesign an element of a great idea and dare the entrepreneur to sue them.
Of course, the biggies have legal staffs and the small business has only invoices and expenses. How about insurance? Try insuring your employees and you quickly discover you need 75 percent participation to buy more expensive insurance than you can afford.
Looking for a small business loan from the SBA? Get ready to risk your home. Finally, to add insult to injury, you will need to pay an accountant to handle your taxes, because the tax laws are just too complicated and the taxes are just too high.
So Democrats and Republicans, if you really want to do more to help small business than lip service at every election, here are a few starting points to think of as a contract with small business:
1. No small business (under $5 million in annual sales) should pay state or federal taxes based upon profits for any year that the business created a living wage job, one in which the job occupant does not have to draw down social services. The paperwork for this program would be: I didn't do $5 million in sales, so I owe you nothing.
2. Small businesses that create living wage jobs should be eligible for a tax credit, much like the earned income tax credit for individuals, when they create living wage jobs. The tax credit encourages the business to take on the sizable risk of hiring.
3. Any small business creating a living wage job should be eligible for low interest SBA loans that are not guaranteed against the personal property of the entrepreneur.
4. Change the equipment depreciation schedule to allow at least 20 years to depreciate the investment in new equipment for the business.
5. Create a real, affordable, insurance fund that small business owners and employees can access.
6. Require the SBA to give small business help in managing all federal regulations.
7. Protect small business from lawsuits that could break the business. No suit should be able to demand more than a percentage of one year of profits, allowing the business to reserve a litigation account with knowledge that the account will protect them.
OK, so that's the deal. Want to really stimulate the economy? Take the above seven principals for a starting point. We can pay for the program with a slightly higher expense to the multinationals.
Big business and small business are not the same, let's help the real engine of the economy for a change.
Dr. Jim Crawford is employed at Ohio University and is a partner in Interconnections, LLC, a Tri-State strategic planning consultancy. He can be reached at email@example.com. The views expressed by Dr. Crawford are his and his alone, and do not represent the views of Ohio University or Interconnections, LLC.