Taking Care of (Small) Business

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President Obama announced recently that he was forming a panel of Small Business experts to help him get America back to work. As the owner of a business with fewer than 500 employees, I am delighted that our President recognizes that Small Business has historically been the engine of job creation and business innovation. Entrepreneurs have played a starring role in creating our national identity. If we are going to get Americans back to work, however, we need some help. I have four quick suggestions.

\"RR1. Health Care Costs.

Our system is busted, and it punishes Small Business. Why should it cost me one-third more to insure my employees than it does Citibank? Only when the burden of health care costs is shared evenly by all employers will we have the consensus to reform the process. Small- and medium-sized businesses have to buy all of their insurance at “retail prices.” We have no ability to form buying groups, much less bargain. Thus, we as a business segment are subsidizing the health care costs of Fortune 100 companies. What the insurance companies can’t make on them, they make on us. The system is also inefficient: A friend recently gave birth at a prominent New York City Hospital. It was a normal birth with no complications. She got seventeen invoices from separate departments and doctors within the same hospital. Imagine the bureaucracy it takes to generate 17 different invoices.

2. Timely Payments.

In 2007, over 95% of our invoices were paid in 30 days or less. In 2010, more than 75% were paid in 60 days or more. Given that our client base is Corporate America, we in effect were providing financing. If the banks and finance companies can collect interest on their loans to us, shouldn’t we be able to collect interest on our loans to them? We are facing a painful reality: that satisfaction with our work bears no relation to the timeliness of payment for that work. Small Business lending might be nice, but just getting paid on time would be better.

3. More Equitable Travel Costs.

On any given day, my firm maintains a minimum of 50 people on the road. We spend almost a million dollars per year on airfares. From O’Hare to Newark, from Miami to LAX, air travel is getting more miserable and costly with each passing year. In addition to the extra time one must now spend on airport security lines, we must also pay more to fly. Why is it that, unlike those of trains or the bus, ticket prices on airlines can vary so greatly? Small Business carries the load. We pay the highest ticket prices, effectively subsidizing both the leisure traveler who can plan far in advance and the corporate traveler who, again, based on volume, negotiates a lower ticket price. Given that airports, air traffic control and FAA are all run on State and Federal dollars, shouldn’t we all pay at least close to the same price for the privilege of using the system? On a recent business trip from New York to San Francisco, I sat next to a tourist who had paid two hundred dollars for the same seat I was charged nine hundred dollars for. One more thing. All members of Congress need to do their commuting on commercial flights. No free rides for any politician on government aircraft. If they are responsible for regulating aerial infrastructure, shouldn’t they be obliged to use it?

4. Form 8802 United States Residency Certification.

Last year we worked in 19 different countries. With the declining value of the US dollar, we can compete very effectively for work around the world. Critical, however, is the need to avoid double taxation on work done outside the country. Every year we struggle to get this paperwork out of the IRS. You have to apply online. You are promised action within 30 days; it has often taken three months. Approval seems to be arbitrary, in that for over a decade, one in three of our applications has been delayed or rejected for reasons they do not communicate. Want Small Business to do its part in correcting the balance of payments? Make it easier for us to do the work.

On paper, 2010 was a great year for us. Merchants and marketers were climbing out from underneath their desks where they had spent 2009, and realized that they needed to face the new world order— or get left behind. But cash flow was a major headache. We got through 2010 doing more work with fewer bodies. My staff is getting crispy. I’m ready to hire, and take on some more space, but the costs may be prohibitive.  More than Lehman Brothers or Bear Stearns, this country can’t afford to see Small Business fail.



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