Bulls Eye: Obama’s Agenda for Small Businesses

Bulls Eye Financial SecutiryThis week President Obama forwarded to Congress a comprehensive legislative Agenda for Small Businesses. The Agenda hit the bulls eye in regards to the views and opinions of small business owners, as determined by the Gazelle Index National survey. Obama’s proposal is an outgrowth of his Startup America Partnership, whose fundamental goal is to facilitate the start-up and growth of young companies– under the premise that they will create most of the new jobs, which are so badly needed  Start up brings together a broad cross-section of business owners, policymakers and practitioners to identify the resources and factors that are most likely to needed by high-growth companies. The Partnership has assembled assistance that is valued at $1 billion. The  assistance provide small businesses increased access to capital; to expertise of business trainers, advisers and mentors; to low cost critical services; to talent required to grow companies successfully; and to new customers new market opportunities.

The Gazelle Index national survey was conducted during the last weeks of November 2011. The survey is unique in that it is the first ever quarterly survey of small-business owners which breaks results down by firms whose owners are Hispanics/Latino, African American/black, non-minority/white, women and men. The survey included 631 responses from randomly selected CEOs. Each operated a business with 10 to 100 employees. The results have a margin of error of + or -5%. The survey asked CEO about the government policies that would most likely influence them to hire workers. In rank order of preference,the policies they identified are as follows:

  1. reducing taxes on businesses and corporations
  2. making small-business loans easier to get
  3. providing a tax credit for hiring unemployed workers
  4. providing a tax credit for new investment

At the same time, the survey asked the  CEOs to identify the most important factors that are crucial in their ability to achieve their strategic business goals. In rank order, they responded as follows:

  1. improving management efficiency
  2. improving product quality
  3. reducing labor and operational costs
  4. increasing business-to-business sales
  5. improving product and service innovation

The President’s Small Business Agenda reflects the strategic priorities that were identified by survey respondents.  The components of the President’s agenda, which was just forwarded to Congress, are as follows:

  1. Implementing 21 different proposals to cut taxes and encourage growth and investment
  2. Elimination of capital gains taxes for investing and strategically positioned small businesses
  3. Creating a 10% income tax credit for hiring new workers
  4. Increasing the tax deduction for start up business expenses from $5000-$10,000
  5. Increasing the mini-public offering limit from $5 to $10 million; exempts firms from SEC filing
  6. Allowing entrepreneurs and small businesses to raise capital through “crowdfunding”
  7. Increasing annual support for the Small Business Investment Company program from $1 to 5 billion

Some analysts are down on the proposal because they feel it is too targeted toward businesses that are not really small. Others feel the Small Business Agenda has many advantages, especially for start up companies that anticipate scaling up quickly. In truth, whether one agrees or disagrees with the President’s Agenda, clearly it reflects very closely the views and opinions of the nation’s small business owners. On this point, the President has hit the bulls eye.