Posts Tagged ‘small business’
You’ve quietly mumbled under your breath while watching the evening news. You’ve commiserated with colleagues at lunch. You may have even taken the time to write an e-mail or call the office of one of our elected officials. A handful of you may have even showed up at a city council meeting, taken your three minutes of fame at the podium delivering a speech that would make Jimmy Stewart proud. Or maybe you rationalized that you’re too busy. That someone else will carry the load. You wrote a check to a business association or chamber of commerce so your work is done.
What have your efforts accomplished?
Try higher property taxes, increased bed taxes, taxes on tanning salons, ballooning utility costs, more regulations and red tape, a rotting city core, larger pot holes, scarier streets, more graffiti, less baseball and a whole lot more vacancies. As business people, we want to believe Tucson welcomes our entrepreneurial spirit. We tuck in each night dreaming of a community that wants us to succeed. They appreciate the hard work and risks we take. After all small business is the economic engine the politicians all love to brag about. Dream’s over – time to wake up!
Our current flock of elected officials seem to have little interest in supporting you or making your road to riches any easier. You’re in this community to be taxed, regulated and demonized. If you’ve made a business career here you’ve really done something special.
Want to know how we got here? Take a look around. How many of our local politicos have ever owned their own business? How many have built a successful career in the private sector? How many have spent their careers in nonprofit or government jobs? Most have risen from the ranks of the progressive party machines. Are there exceptions? We guess so.
Let us share the real problem the business community has in our region. Our politicians don’t get us. They don’t respect us. And they certainly don’t fear us.
Since the dawn of the democracy, when elections come around politicians count votes. Environmental lobbies, neighborhood associations, unions and university and government employees vote. When a politician’s primary goal is to get re-elected or move to a higher office, catering to the groups that walk the streets, pick up the phones and show up at rallies is perceived as essential to future success.
What are we as a business community to do? For starters, we need to identify strong pro-business candidates then truly support them. The heat will get turned up on you or your business but you must take a stand. A trite chamber of commerce endorsement isn’t going to cut it.
We must ensure that our elected officials are true friends of business. If they aren’t we must take them out of office in a strong and swift show of force. When we do win a seat, the business community needs to remind the other sitting officials that we have the power to influence an election. Once they fear us, they will respect us. Once they fear us, they will listen to us. Once they fear us, things will change.
Don’t fall back on your indifference. Don’t go back to watching “Dancing With The Stars” or “The Biggest Loser.” Sure, we can continue to wait and hope someone else will carry the load but how’s that worked out for us so far?
Wake up business community. Wake up Tucson.
Early ballots will be arriving in mailboxes Oct. 8. If you haven’t requested an early ballot, call (520) 740-4330. Any registered voter in the city of Tucson can vote for any of the six council candidates running. This is a partisan race — for now — and it’s not limited to individual ward-only voting. Inform your employees, family and friends of what is at stake in this election. Research the candidates and measure results.
Contact Joe Higgins at email@example.com or Chris DiSimone at firstname.lastname@example.org. They’re the hosts of “Wake Up Tucson,” which airs 6 a.m. – 7 a.m. weekdays on The Voice KVOI 1030-AM. Information about the show is online at WakeUpTucson.net
Couldn’t resist – Inside Tucson Business ran a story on another list that we really don’t want to end up on. We are in the top 10 most expensive cities to do business in ….NATIONWIDE. Apparently there is a recalculation on how cities are measured and we as a region didn’t fair too well.
We are going to find out how if there is a typo in this statement…. “small businesses saw their annual taxes jump from $744 to $200,000, Jensen said in an e-mail.” Seems a little to big to make sense. Maybe $744 to $2000?
We made a similar list a year ago when ASBA ranked Tucson as the most unfriendly city in the state to do business in. ASBA has over 3000 members statewide that apparently aren’t afraid to point out that Tucson needs to clean up it’s act.
Tucson among 10 most expensive to do business
Published on Saturday, July 25, 2009A new study ranks Tucson among the 10 most expensive cities in the United States in which to do business.
The 15th annual Kosmont-Rose Institute Cost of Doing Business Survey released July 20 puts Tucson and Phoenix in an alphabetical list that also includes Akron, Ohio; Chicago; Jersey City, N.J.; Los Angeles; New York; Newark; Philadelphia; and San Francisco.
The survey, done by Claremont McKenna College, Claremont, Calif., ranked 411 cities in terms of their relative cost to do business. Categories include taxes, fees, economic incentives, transportation amenities, the existence of special enterprise zones, and public-private partnerships. Survey officials said two of the biggest determinants of a city’s cost of doing business tended to be business license fees and property taxes.
Research associate Brad Jensen said what caused Tucson to jump so much was a 2007 change in the way taxes are calculated setting an annual tax of $200,000 for the first $10 million in receipts of the first 100 employees and doing away the old system that was graduated based on the number of employees. Under the change, small businesses saw their annual taxes jump from $744 to $200,000, Jensen said in an e-mail.
The survey was originally developed to compare costs among 250 cities in California but has been expanded to include 161 cities outside the state.
Laura Shaw, senior vice president of marketing and communications for the economic development agency Tucson Regional Economic Opportunities Inc., said she couldn’t comment specifically on the new study because she hadn’t seen it but said a Forbes study released in March this year ranked Tucson No. 105 out of 200 cities.
Once again, Texas cities came out looking pretty good. Four out of 10 cities are in Texas and four out of 10 are in Oregon of all places.
The press release from the Kosmont-Rose Institute took some pot shots at California.
California cities such as Los Angeles, Oakland, San Francisco, and Santa Monica received “Very High Cost” ratings, and as in past years, Los Angeles County continues to be the location of the Survey’s most expensive jurisdictions with 11 of the 50 most expensive cities being in the County. Communities in western states such as Washington, Colorado, and Nevada consistently provide low cost areas in which to do business.
“California and many of its cities are now grappling with the triple witching hour of property tax losses, sales tax recession, and income tax losses,”said Larry Kosmont, president and CEO of Kosmont Companies and founder of the Survey. “Even well-run cities are having a hard time fending off tax increases, particularly since the financially faltering State wants to take back local redevelopment money and gas tax from their local cities and counties. However California should not raise anymore taxes at a time when businesses are already suffering, unless we want to see the exodus continue of companies leaving the State to other more business friendly locations.”
Since the Survey’s inception, California has consistently been one of the most expensive states in which to operate a business and as a result the state has earned a mixed reputation for its treatment of businesses. Recent trends support these conclusions. State workers’ compensation costs are once again on the rise after some years of stability, and a new one percent increase in the sales tax went into effect for the state of California on April 1, 2009. Further, several California counties and cities have recently increased their local sales tax rates. As a result, the California sales tax ranges from 8.25 percent in counties without add-on sales tax to a hefty 10.75 percent in some cities in Los Angeles County.
Even more challenging to a healthy economy are finances at the State level. With the State bleeding red ink due to a 26.3 billion dollar shortfall, and the overall economy in a downturn, the California legislature will need to carve out a budget deal premised primarily on drastic service cuts. However, many worry that the budget will continue to ignore the unfunded programs that are not sustainable due to ongoing revenue deficits that make voter approved commitments such as Proposition 98 education mandates unachievable. This makes the State’s future appear dim to many business leaders.
“California faces tough choices and spending reforms that are needed to resolve budget deficiencies, sufficient for California to become financially solvent, will not be easy ones to accept,” said Kosmont. “Pension and In Home Supportive Service reforms could save the State billions of dollars, however these and other reforms can be perceived as harsh. Ultimately, the California legislature needs to decide if they want to bring credit stability to a system that the business and financial community views as unmanageable and less creditworthy as each day passes.”
Talk about a tough time to become President of the US. Two wars, one of the worst economy’s in years, Isreali unrest, huge federal deficits and the list goes on. Let’s hope Obama’s plan for small business works.
What Obama’s Proposed Tax Cuts Mean for Small Businesses – From Business Week
Posted by: Colleen DeBaise on January 05
Here’s a welcome report for entrepreneurs this new year: President-elect Barack Obama’s massive stimulus plan is expected to include three key tax breaks for small-business owners.
Details are still emerging, but the plan could include a longer window for businesses to “carry back” losses; an incentive to invest in machinery, equipment and other capital improvements; and a tax credit for job creation.
How soon can that get money into your hands? Faster than you might imagine. I spoke with Barbara Weltman, a tax attorney in Millwood, N.Y., who says an extension of a carry back period for losses could significantly help businesses that had been profitable in years past, but struggled in 2008.
Here’s how it might work: If you experienced a downtick last year, you can claim a net operating loss or NOL, which is essentially when expenses exceed revenues. Current tax law allows you to use that NOL to offset the past two years’ income, which could win you an immediate cash refund. Under the Obama stimulus plan, that carry back period would be extended, allowing you to use that NOL to reduce the past five years’ tax bills. That’s “a big deal,” she says. “It allows you to get an immediate cash infusion that you can use to help you survive now.”
If you do get a cash refund, another proposed tax break might spur you to plow that money back into your business. The Section 179 (first-year expensing) deduction for purchases of new equipment or machinery is expected to increase to $250,000. Currently, the limit for 2009 is $133,000.
Another piece of the Obama stimulus package could be a one-year tax credit for job creation. The president-elect has pledged to create 3 million new jobs to offset 2008’s steep losses. Republican Congressional leaders have indicated they would support tax relief, although size and scope would need to be worked out. The emergency package could be passed within weeks of Obama’s inauguration.
When the environmental consulting business renewed its credit line last month, the interest rate nearly doubled to 10% from 5.25%. Fuel costs for the company’s vans and trucks had risen. Customers were taking longer to pay bills.
Chief Executive Deb Peters says she didn’t want layoffs, so she asked some of her 33 employees to mow the company’s lawn and do other yard work, saving $7,000. Another $7,000 in savings came from switching the ink on Quality’s letterhead to black from color.
Then the operations manager tried to halt delivery of $130 worth of doughnuts, bottled water and vanilla coffee creamer for a monthly staff meeting. No way, Ms. Peters said. Employees who work billable hours agreed to work one or two more per week to pay for the treats.
“It’s like riding a roller coaster,” she says of running her business these days.
Across the U.S., companies are looking for cuts in every budgetary nook and cranny in an economy dragged down by slowing consumption, an imploding stock market and tight credit. They’re cutting payrolls and scrimping on everything from photocopying to free coffee, from sales trips to shampoo. Some are having to reluctantly turn away business because they can’t borrow enough money to accommodate it.
Louis Licari, founder of the tony Louis Licari salons in New York and Beverly Hills, Calif., recently installed new weight scales so hair-color solution could be more precisely measured. Hair-washers who use too much shampoo and conditioner will be scolded, he says. “There’s no more by-the-eye measuring — too much waste goes down the sink,” says Mr. Licari, whose salons employ about 120.
Still, to keep customers coming, he says he can’t afford to cut some costly perks, like the “major arrangement” of flowers at the front desk that is replaced every week. “We’ll still do coffees, teas, cookies and brownies,” he says. “Even if I have to bake them myself.”
At 2nd Wind Exercise Equipment Inc. of Minneapolis, “We’re analyzing things with a magnifying glass,” says Chief Executive Dick Enrico. Sales managers traveling to the company’s fitness-machine stores have been ordered to compare the cost of renting a car versus expensing the use of their own vehicle at federal mileage rates.
At Shooters Restaurant & Sports Bar in Wareham, Mass., food sales have dropped almost 80% in the last month, prompting a new menu of “recession specials,” says Jim Hoban, an owner. Spaghetti and meatballs has been cut to $4.99 from $8.99. The fried clam plate is $7.99, down from $9.99.
“No one has got any money to eat out,” Mr. Hoban says of his largely blue-collar clientele. “We are basically giving the food away, hoping that they’ll buy a beer” or something else extra.
The Mashantucket Pequot Tribal Nation, which operates two big casino complexes in Connecticut, plans to lay off 700 employees, or about 6% of its work force, as revenue falls. Among the first to go was the nation’s chief executive, Patricia Irvin, whose position was eliminated. “Although it has taken a few months, the recession’s impact can now be clearly seen in our industry,” Michael Thomas, tribal council chairman, said in a statement.
And construction by a different tribe, the Mohegan Tribal Gaming Authority, of a 39-story, 919-room hotel in Uncasville, Conn., recently was stopped because of the economy. The Mohegans had planned to spend $734 million on the hotel, a restaurant, a retail center and concert venue.
Hinckley Co., a storied Portsmouth, R.I., yacht builder, last week said it was shedding 49 workers, or about 9% of its work force, citing a sudden slowdown. The company was hitting its sales targets through the year’s first two quarters. “The tipping point really was the last 30 days,” says Edward A. Roberts, vice president of marketing and product development, “when we saw a fairly abrupt change in the demeanor in people getting to the last step” of the buying process. People who negotiated contracts to buy boats were suddenly unwilling to sign, he says.
Instead of sending the usual four boats to a major show in Annapolis, Md., next week, Hinckley will send two, and two salespeople instead of five. “We’ll still open a bottle of champagne in the afternoon,” Mr. Roberts says. “We won’t switch to beer.”
The Greyhound Lines Inc. bus depot in Montpelier, Vt., will shut its doors next week because of a ridership drop, says station manager Michael Coffin. Starting Tuesday, Greyhound plans to cut one of its four daily round trips between Vermont and New York City. That means Mr. Coffin may lose 25% of his customers and ticket-sales commissions. “I’m pretty much going to be forced to close, and get myself back out in the work force,” says the 50-year-old Mr. Coffin.
Others are missing opportunities. Three weeks ago, Vista Window Co. of Warren, Ohio, received a surge in orders for its vinyl replacement windows after a competitor shut its doors. Vista sought a $1.75 million loan to hire workers, buy machinery and raw materials and secure more warehouse space, says Ed Kalaher, vice president of corporate affairs. Its bank refused, saying it was no longer comfortable with Vista’s debt-to-assets ratio. Vista turned away the business and will delay further expansion plans for at least another year, Mr. Kalaher says.
The company’s sales have grown by at least 40% a year since it opened seven years ago and this year are expected to hit more than $20 million. “In years past, there was a certain amount of value that momentum, growth, opportunity brought with lenders,” Mr. Kalaher says. “That doesn’t hold any weight anymore.”
Lifeline Program, an insurance-settlement company in Atlanta, saw its revenue grow 20% annually for six years while relying on loans of up to $250 million every 18 months to finance its operations. But its usual lender, part of a multinational bank, shut the door on the company’s most recent request for money, forcing it to lay off half its 50 employees. “This has been a shocking blow to me as a business owner,” says Scott Page, the company’s president and chief executive.
Bonnie Ulman, president and founder of Haystack Group Inc., an Atlanta public relations firm, noticed earlier this year that clients were taking longer to finalize contracts and pay bills. Rather than replace several employees who left, she asked her 15-member staff to take on additional tasks. To save on magazine subscriptions, Ms. Ulman asked workers to find cheaper online options. Employees started to make two-sided photocopies and favor the U.S. Postal Service over FedEx.
“We used to give $10 Starbucks gift cards [to top performers] every week, but that’s cut to every month,” Ms. Ulman says. Rather than celebrate the holidays this year with dinner at a fancy restaurant, employees and clients will volunteer for Habitat for Humanity, then eat at Ms. Ulman’s home.
“You’ve got to batten down the hatches to stay focused on the firm and your clients,” says Ms. Ulman.
—Timothy Aeppel, Paulo Prada, Philip Shishkin and Sara Silver contributed to this article.
Here is a great commentary from today’s Arizona Republic. For those in our community that get a weekly paycheck, thank your lucky stars! For those of us that are self employed you realize just how scary it can be. Many small businesses will not be able to survive these next few months. There day is filled with fear. The news outlets talk about how bad it is at every turn. Small business owners have no idea of that lies around the corner? How long can we hold out? Will fuel go through the roof again? When will my customers start spending money with me?
From E.J. Montini – Arizona Republic – Dec. 21, 2008
The businessman’s message ran for 1 minute and 36 seconds on my answering machine. He was trying to set me straight about the problems being faced by people like him, which he thought were ignored by people like me. And he was right.
I didn’t have the brains or the guts to go into business for myself.
I grew up in a mill town, come from a family of millworkers and spent several summers working in a steel mill outside of Pittsburgh to help pay for college. Professionally, I drifted into a less physically demanding form of assembly-line work and have spent many happy years toiling away in what I call the Paragraph Factory.
I feel close to the working people who are bearing the brunt of the economic downturn, like a Phoenix couple I wrote about last week, both of whom had been laid off from their jobs.
The anonymous local businessman was responding to that article when he left his message on my voice mail.
He chose not to leave his name or telephone number, or even to tell me what business he was in. I doubt that he had rehearsed all that he was going to tell me.
There is a raw, emotional quality to his voice. His sentences start and stop. He sounds a bit disjointed. A little frustrated. A little sad.
All for good reason.
“Who has more to lose, Ed?
“The common person that gets laid off from their job making $50 or $60,000 a year, you know, has a small savings. And they just lose their job. And they get unemployment or severance. And they can go six months and hopefully survive and keep their house.
“Or the business owner that had to lay them off? Who had been working for 25 or 35 years. Has bought their own property. Has some kind of a liquid income, so finally they can get above their heads. And pay their bills. And pay all their taxes. And pay all their employees’ health insurance and all that.
“And finally get to an area where maybe they can start giving bonuses. See that light on the corner. And being 48 years old and possibly you’re going to turn that corner and see retirement on the horizon. And then to all of a sudden, in two years, lose all of that and begin where you started back in 1985.
“You tell me, which is worse?
“That you’ve already made all that money, and you bought the property, and your kids are going to college, and you’re doing all that, and then after 25 years of working hard, you lose all that?
“Or just to lose your job and have to go look for another job? Maybe have to deal with it for six months or something.
“Look on both sides.
“Business owners may be callous or whatever, but they are losing worse because we have a lot more to lose. Twenty-five years after buying a property and you just lose it all in two years.
“Isn’t that amazing?”
Then he hung up.
There probably won’t be any federal bailout money for guys like him. In the meantime, some of his taxes already may have gone to assist big-time bankers and types and might wind up helping some of the working stiffs who were behind on their mortgages and about to lose their homes.
The small-business man didn’t ask for help, however. Or for sympathy.
Imagine that. Even after losing everything and having to start anew, as he had “back in 1985,” all that he asked is that I take a moment to “look on both sides.”
At a time when so many others are looking for a handout, that is amazing.
Reach Montini at 602-444-8978 or email@example.com.
Ask any small business owner that has gone through the City of Tucson Certificate of Occupancy process and get ready for a long detailed nightmare story. Field inspections contradicting plans that have already been approved. One City inspector signs off on your building only to have another inspector stop your project over the very same approval. I know of a one year old building that had to re-do their restroom because it was out of code – after ONE YEAR. The parking requirements are archaic, just look at big box parking lots and you’ll see dozens of empty ‘heat sink’ spaces sitting empty.
The Tucson Citizen featured a local small business owners experience HERE and HERE( the online comments from the Star article are classic!). Long story short, Jim Heath bought a building with a large cooler attached and was told he had to remove it prior to getting a CofO. I had the opportunity to talk with Jim Heath and he went through every option in the play book and things didn’t look good.
A procedural change in the business licensing process a little over a year ago triggered a requirement that all business that change their address, owners, uses, locations automatically trigger a requirement for CofO before they can be legal. By some accounts over half of Tucson businesses operate without a CofO.
The question is, does the City like the unique character of older commercial buildings? Many times to bring an older building, and I mean as recent as a building built 10 years ago into compliance, may be a huge expense if not impossible. The parking requirements, ADA requirements, landscape set backs, lighting codes, water retention basins and now rainwater collection towers trigger many properties into non-compliance.
Our community needs to make a decision;
Do we want the unique character of older inner city buildings?
Affordable rents are important for small businesses to launch their ventures. Infill commercial rents from $12 to $18 per square foot. A new development in Oro Valley can run up to $40 per square foot or more.
Issues of life and safty are non-negotiable but we must be flexible.
The Star correctly addressed the underlying land code issue HERE. It doesn’t get more clear than this:
Mike Hammond of Picor Commercial Real Estate said he had a client who was tripped up by a rule saying that if the flush handle on a toilet is not on the side away from the wall, you have to replace the toilet. Cost: Six toilets times $500, plus labor. Reason: Unclear.
This is absurd and bad for business. It must be fixed. Thankfully, various elected officials, city workers and citizens like Hammond and Warne are working to get that done.
Hammond says Tucson’s land-use code has become so byzantine that “quality developers that we want in our city can spend $15,000 on a project and then discover they can’t do what they want to.”Because of such hassles, many of them borne of confusion among city workers about what the code means, commercial developers like Warne and Hammond warn that Tucson is losing new businesses, and thus jobs, to competitors like Marana, Mesa and Chandler.
As for revitalizing the central city in the face of such bureaucratic hassles? “That’s just a myth,” Hammond said.
I caught this article in Business Week and couldn’t resist a sad commentary on our country and county. Everyone has read the Walmart stories about how they are the death of many small businesses, how they underpay their workers, how they squeeze suppliers to the point that they are forced overseas in order to maintain shelf space. The usual capitalist pig type stuff.
I personally quit shopping there a few years back because of many of the above reasons. I like to shop local and keep the money in the small businesses of our community. I’ve shopped at Walmart in the past and from time to time I’ll venture in to see how Sam’s vision is coming along. I do shop at Sam’s Club for full disclosure.
I had the opportunity to meet and talk about one of my ventures with M. (real name withheld as I didn’t ask him if I could blog about our conversation). M is a former CEO for Sam’s Club International, Petsmart among others. He’s in the top echelon of American CEO’s.
We met at an Applebee’s in Phoenix, which I thought was odd for a CEO type like M. He pulled out an Applebee’s credit card and mentioned that he was on their board of directors, so much for judging a book by it’s cover. M. and I got into a deep discussion about Walmart and I shared with him my philosophical reasons for not shopping there. He had an interesting theory and since he’s been inside I think it has quite a bit of merit.
His theory on Walmart is that just like major retailing giants that dominated America in the past, Walmart will implode on it’s own success. In the 40’s 50’s and 60’s the dominate retailer in America was Sears and Roebuck (and Montgomery Wards to a lessert extent). Sears pioneered the catalog business, built mega stores in downtown’s and eventually suburbs across the country. The Sears Tower went up as a testament to their dominance.
M’s theory is the entrepreneurial spirit that made them the power house got lost in the beauracratic maze that inevitably sets in an organization (or government for that matter). The theory goes that middle management works harder to justify their existence than they do on making necessary moves for the organization. Eventually the sharp edge is lost and an economic hiccup can set off a series of dominoes until its too late. Same thing happened to KMart and eventually, according to M. it will happen at Walmart.
As an aside, M. turned me on to Greenleaf’s Servant Leadership and I highly recommend the book and its philosophy, it’s one of those life changers.
Walmart’s quest for low prices took the quality out of most of their merchandise. Walmart’s customer service is non existent and most of the employees look so overwelmed and under supported that they could care less about the principals that Sam insisted on to build his brand. In the mean time I’ll still be shopping at Target and waiting for the day that I can say I told you so.
But hey if gas prices have your pocket book a little lite and the ARM on your mortgage just adjusted, stretching a buck could become a big part of raising your family. To each his own.
Let’s bring it back to Tucson. Walmart cracked the top ten largest employers in our region at 5626 employees. Read the post HERE. The Oro Valley market place celebrated a shiny new Walmart in what some people describe as a bait and switch job perpetrated by the OV council. A council which have since been replaced.
The sad commentary is that the jobs Walmart creates don’t come with quality benefits or high wages our region desperately needs. Walmart’s are part of our equation but we must bring in higher paid skilled industries to create an economic base that can afford simple things like buying a home.
Check out TheStoryOfStuff.com for an different way of looking at our consumption.
Small business owners struggling
Oct. 28: Hudson Cleaners owner Brian Ferwerda, one of the nation’s 27 million small business owners, is feeling the effects of the economy hard – and he’s not alone. NBC’s Tom Costello reports on Congress’s plan for ailing small businesses.
Small businesses employ over 50% of Americans. A poll this month stated 74% feel the economy getting worse and 38% admit having cash flow problems in the last 90 days.
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