We Are Witnessing The Death Of Small Business In America

[Jetdawgg]

Unfortunately, the problems that small businesses are experiencing right now have been building up for decades. The economic environment for small businesses in America has become incredibly toxic. Sadly, we can see this in the numbers. According to Kane, the following is how the decline in the number of startup jobs per 1000 Americans breaks down by presidential administration...

Bush Sr.: 11.3

Clinton: 11.2

Bush Jr.: 10.8

Obama: 7.8

http://theeconomiccollapseblog.com/a...ess-in-america

[palmetto defender]

Haven't had to technically use statistics in a while but I would guess that there is not a significantly ststistical difference from GB I to WJC. Also probably not from WJC to GWB. HOWEVER, there is a significant decline to Obama. Why? His policies are destructive to small business. Large business to.

[Brooklyn Jet]

Whats your point Dawg?

The rest of the article points out :

There is anecdotal evidence that the U.S. policy environment has become inadvertently hostile to entrepreneurial employment. At the federal level, high taxes and higher uncertainty about taxes are undoubtedly inhibiting entrepreneurship, but to what degree is unknown. The dominant factor may be new regulations on labor. The passage of the Affordable Care Act is creating a sweeping alteration of the regulatory environment that directly changes how employers engage their workforces, and it will be some time until those changes are understood by employers or scholars. Separately, there has been a federal crackdown since 2009 by the Internal Revenue Service on U.S. employers that hire U.S. workers as independent contractors rather than employees, raising the question of mandatory benefits. New firms tend to use part-time and contract staffing rather than full-time employees during the startup stage. According to Labor Department data, the typical American today only takes home 70 percent of compensation as pay, while the rest is absorbed by the spiraling cost of benefits (e.g., health insurance). The dilemma for U.S. policy is that an American entrepreneur has zero tax or regulatory burden when hiring a consultant/contractor who resides abroad. But that same employer is subject to paperwork, taxation, and possible IRS harassment if employing U.S.-based contractors. Finally, there has been a steady barrier erected to entrepreneurs at the local policy level. Brink Lindsey points out in his book Human Capitalism that the rise of occupational licensing is destroying startup opportunities for poor and middle class Americans.

So I ask, whats your answer to fix this?

[parafly]

People can argue about federal policies until they are blue in the face, but at the end of the day, the country is seeing a decline in small business due to the actions of the consumer base.

Consumers have put a top priority on convenience and cheap prices. Under this environment, big box stores thrive and small businesses die. The convenience of a one stop shop combined with cheap prices driven by foreign labor and large scalability are proving to be irresistible to the average consumer.

If you want to see a resurgence in small businesses, stop blaming the government and the President, and go spend your money accordingly. Voicing your displeasure about government policies while continuing to shop at Walmart, Target, and Starbucks is not going to solve anything.

[chiefst2000]

Originally Posted by parafly

People can argue about federal policies until they are blue in the face, but at the end of the day, the country is seeing a decline in small business due to the actions of the consumer base.

Consumers have put a top priority on convenience and cheap prices. Under this environment, big box stores thrive and small businesses die. The convenience of a one stop shop combined with cheap prices driven by foreign labor and large scalability are proving to be irresistible to the average consumer.

If you want to see a resurgence in small businesses, stop blaming the government and the President, and go spend your money accordingly. Voicing your displeasure about government policies while continuing to shop at Walmart, Target, and Starbucks is not going to solve anything.

Wrong. Shopping at Wallmart isn't the problem. People have been shopping there for years. Small businesses aren't just stores on main street. People run all types of companies. There are many diverse reasons why small businesses are suffering. Government regulation plays a very large roll in it. The meandering economy doesn't help things. The main issue however is that success rates for start up businesses are just too low. If startup costs are high and there is a high chance of failure it makes sense that people would choose the safer path. Just getting an LLC today requires a multi week multi step process including ads in the local papers, lawyers and fees.

A friend of mine opened a small ice cream shop in NJ a few years back. By the time he was finished with the permits, regulations and red tape the cost to open was over $400,000. He didn't even own the building for that price. I knew when it opened that the deal was destined for failure. Startup costs were too high. 3 years later he was out of business.

There are endless stories like that one. Lately it seems that the return for risking capital to start a business very often simply isn't worth the risk.

[parafly]

Originally Posted by chiefst2000

There are many diverse reasons why small businesses are suffering.

Correct, and my point is that consumer choices are the ultimate factor.

3 years later he was out of business.

He was out of business because too many consumers chose Carvel, Cold Stone, and Ben & Jerry's over his mom and pop local shop. Were start up costs a factor in the business failure? Perhaps, but they wouldn't have put him out of business if he had an adequate number of customers.

[chiefst2000]

Originally Posted by parafly

Correct, and my point is that consumer choices are the ultimate factor.



He was out of business because too many consumers chose Carvel, Cold Stone, and Ben & Jerry's over his mom and pop local shop. Were start up costs a factor in the business failure? Perhaps, but they wouldn't have put him out of business if he had an adequate number of customers.

Carvel, Cold Stone etc are mom and pop franchises just like the Tasti Delight my friend opened. None of those stores are corporate owned.

He went out of business because his startup expenses were too high. Nothing else. When he wanted to add sandwiches and soup to the shop there was another slew of regulations and hoops to jump through. The cost was a killer (alongside a poor choice of location IMO).

My point is that back in the 80's anything an entrapreneuer threw money at turned to gold. Real Estate - Gold, Buy a taxi medallian - Gold, Put money in stocks - gold. Gas Station - Gold. Almost every type of investment worked out between 1980 and 2000. For the past 12 years that just hasn't been the case. Real Estate has been a disaster. Stocks are crap. Good luck buying a 1Million dollar taxi medallian and making a profit. Open a restaurant? They have a 90% failure rate. Things are tough today.

[parafly]

Originally Posted by chiefst2000

My point is that back in the 80's anything an entrapreneuer threw money at turned to gold. Real Estate - Gold, Buy a taxi medallian - Gold, Put money in stocks - gold. Gas Station - Gold. Almost every type of investment worked out between 1980 and 2000. For the past 12 years that just hasn't been the case. Real Estate has been a disaster. Stocks are crap. Good luck buying a 1Million dollar taxi medallian and making a profit. Open a restaurant? They have a 90% failure rate. Things are tough today.

I agree.

From my personal experience, it seems like the current model for a small business is to open, gain relative success quickly, and get bought out by a larger entity at a profit. I've seen this happen on multiple occasions, although admittedly, in was in the tech industry where things run a bit differently.

[Jetdawgg]

Originally Posted by Brooklyn Jet

Whats your point Dawg?

The rest of the article points out :



So I ask, whats your answer to fix this?

There are quite a few issues here as small businesses continue to fail. The local laws are crushing to a small business as they bring taxes and other regulations.

The federal gov't is not easy to navigate either. Cash flow is difficult and made even tougher when lending is restricted.

I cannot say that the Obama policies (Obama care) are going to help either. A friend of mine had to go to work with his sister in her business as he lost his job (a small business) and she had to layoff several employees.

The gov't has not been buying many products either. The gov't at each level has been in retrenchment for five years already with no end to this in sight

[Winstonbiggs]

Weak demand and credit is very tough to get without putting up hard assets. This seemingly meaningless tax increase on the rich will also shrink cash flow to many small businesses, particularly when the first quarterly taxes are due in April.

[Jungle Shift Jet]

But but but "there's no difference between (R) and (D)"...

The OP like other "conservatives" emerged from his closet to stridently decry Romney and either voted for B. Hopenchange or some other puke or sat on his duff...an' now is complaining about the neo-commie?

It is to laugh

[BushyTheBeaver]

Originally Posted by parafly

I agree.

From my personal experience, it seems like the current model for a small business is to open, gain relative success quickly, and get bought out by a larger entity at a profit. I've seen this happen on multiple occasions, although admittedly, in was in the tech industry where things run a bit differently.

That's the standard business plan for most high tech startups and has been for some time. Nothing new about it.

[Jetdawgg]

Originally Posted by Jungle Shift Jet

But but but "there's no difference between (R) and (D)"...

The OP like other "conservatives" emerged from his closet to stridently decry Romney and either voted for B. Hopenchange or some other puke or sat on his duff...an' now is complaining about the neo-commie?

It is to laugh

Romney lost big time. He was clueless

[detjetsfan]

But let's blame Obama instead

[detjetsfan]

Originally Posted by Winstonbiggs

Weak demand and credit is very tough to get without putting up hard assets. This seemingly meaningless tax increase on the rich will also shrink cash flow to many small businesses, particularly when the first quarterly taxes are due in April.

It's actually never been easier to borrow money than it is now if you're trying to start a small business. Again, these Bush tax cuts for the rich were supposed to help small business yet in the end all we saw was the end of small businesses, the growth of monopolies and super-corporations like Wal-Mart that kill Main Street, and Wall St fatcats hoarding 95% of the nation's wealth in Off-Shore Accounts and other tax shelters.

[Jungle Shift Jet]

Originally Posted by Jetdawgg

Romney lost big time. He was clueless

Sure. an' you're the un-clueless one who doesn't know how/why SMB is getting clobbered.

[Jungle Shift Jet]

Originally Posted by detjetsfan

But let's blame Obama instead

Yeah Vincenzo you got it *slaps knee*

that's who is cornering the market in every SMB area from lumber yards to catering to electronics to landscaping to medical supplies to CPA work- Wal-Mart

[Winstonbiggs]

Originally Posted by detjetsfan

It's actually never been easier to borrow money than it is now if you're trying to start a small business. Again, these Bush tax cuts for the rich were supposed to help small business yet in the end all we saw was the end of small businesses, the growth of monopolies and super-corporations like Wal-Mart that kill Main Street, and Wall St fatcats hoarding 95% of the nation's wealth in Off-Shore Accounts and other tax shelters.

You're post is a manifesto that has nothing to do with reality. You can't borrow money without a personal guarantee or puting up hard cash assetts if you're a small business. The idea that money is easy for small businesses is simply BS as is the idea that taxes going up on individuals doesn't impact the cash flow of small business and force them to either contract slightly or reduce other expenditures.

I'm all for higher taxes there's no getting around it but you don't have to BS anyone that this doesn't have an impact in a realatively stagnant economy. If it did why are Democrats overwhelmingly willing to institutionalize the Bush tax rates?

Comrade small businesses always get the shaft because small businesses don't have friends in either party or in labor.

[MnJetFan]

If you need answers on computer repair. Do you use the Geek Squad or Staples? I use Staples all the time. Tools I buy from a local hardware store instead of Home Depot or Lowes.