Published by the National Small Business Association
Volume 22, Issue 2
How Satisfied are your Customers? Is your business part of the emerging small business Technology Trend? The Political Pulse
SURVEY SAYS Increasing operational costs, an ensuing credit crunch, and a tumultous economy are causing many small business owners to question if they are alone in facing present day market conditions. NSBAâ€™s 2008 Survey of Small and MidSized Business measures all sides of the issues facing small business owners and uncovers some interesting results.
Save up to 42% on your health insurance?
Don’t Look So Surprised.
Lock in Your Rate until 2011 WE ARE DEDICATED TO AMERICA’S SMALL BUSINESS COMMUNITY. As America’s oldest small business advocate NSBA is dedicated to meeting the needs of America’s small businesses and helping the community to overcome the challenges they face every day. We realize that one of the largest barriers for small business owners and employees is the rising cost and burden of HealthCare, which is why NSBA is proud to offer its members the opportunity to take advantage of the new NSBA Health Plans.
WE PROVIDE YOU AND YOUR FAMILY WITH EXCELLENT SERVICE. NSBA Member Bene¿ts Department is pleased to provide our members and their families with comprehensive and affordable health insurance plans that are meant to save them money. With multiple plans and an extensive network of national providers (over 750,000), this is one of the most comprehensive health insurance programs available. You can be con¿dent in our ability to provide you with affordable health insurance coverage for years to come.
ENROLL TODAY! 1-888-624-5886 or
HEALTH SAVINGS ACCOUNT INSURANCE PLANS
Health Savings Accounts are the most innovative approach to health care in years and may save you up to 42% over traditional PPO plans. Furthermore, you don’t pay taxes on the funds you deposit in your Health Savings Account. Unused funds in the account roll over from one year to the next, and earn interest tax-free. Call today to learn more about the advantages of Health Savings Account Insurance plans.
Traditional PPO HEALTH PLAN
The traditional PPO plan is a cost-effective traditional plan for both everyday and catastrophic needs. You’ll be able to control your premiums without giving up bene¿ts, and can still choose to add optional features, like an of¿ce visit copay for more protection and convenience. Providing up to $25 Million in bene¿ts, this traditional plan offers quality and Àexibility.
PPO “Light” HEALTH PLAN
The PPO “Light” Plan is ideal for those who are without health insurance or are thinking about dropping current coverage due to cost. This health plan provides extensive access to providers and up to $2 million in health-care bene¿ts, for as little as half the price of other popular plans.
www.nsbahealthplans.org With TeleExpress Member Enrollment, you can build your health plan, enroll right now over the phone in as little as 15 minutes and be approved in as little as 24 hours. All plans are completely voluntary with no obligation.
NSBA LEADERSHIP CORNER
A Message from NSBA’s Chair C Chair Marilyn D. Landis
The Small-Business Constituency
First Vice Chair Keith Ashmus
With all the new data coming out about how the economic slowdown is affecting small business, NSBA’s role—the nation’s oldest small-business group representing the more than 70 million people in the smallbusiness community—is one of increasing importance. The federal government and Congress continue looking for ways to address and stabilize the economy, and it’s up to us to ensure that they hear from small business. Each year, NSBA holds an event in Washington, D.C. called the Washington Presentation where members from across the country fly to the nation’s capitol to discuss pertinent small-business issues with their peers and lobby their elected officials. The Washington Presentation will be held on June 3 and 4 this year with an in-depth session focusing on the upcoming elections. We will hear from DC insiders and pundits on the elections, and have invited the candidates to participate as well. When NSBA takes to the Hill, we will spend the morning hearing from Congressional leaders on pertinent smallbusiness topics before the group embarks on a day packed with key lobbying visits. It is during these meetings that the smallbusiness message—your message—will be delivered. In the past several columns, I’ve touched on the importance of your involvement and activism. Many of you have signed up to be a Media Advocate for NSBA. Many of you have nominated an outstanding smallbusiness owner for our 2008 Small Business Advocate of the Year Award. I thank you for your efforts, and urge you to continue your active involvement in our—your— association as we continue to push for small business-friendly policies. There are a number of characteristics about the small-business community that make us such a unique constituency for our elected officials. First, there is no question that small business is the center of job-creation in our economy, providing us with a heightened level of necessity in the corridors of Congress. Second, there are millions of us. Third, we are an incredibly diverse group of voters— both a pro and a con where Congress is
Secretary Lois W. Riske Treasurer Scott Hauge Immediate Past Chair Grafton H. “Cap” Willey, IV Vice Chair, Communications Chris Holman Vice Chair, Advocacy Larry Nannis Vice Chair, Membership Phyllis Shearer Jones President Todd McCracken Editor Molly Brogan Writers Molly Brogan Jere Glover Kyle W. Kempf Jody Milanese Jim Morrison Greg Smith
HOW TO REACH US National Small Business Association 1156 15th Street NW Suite 1000 Washington, DC 20005 Phone: (202) 293-8830 Fax: (202) 872-8543 Web: www. nsba.biz Notification of address changes should be sent to the address listed above.
NSBA is a volunteer-led association. Our primary mission is to advocate federal policies that are beneficial to small business and promote the growth of free enterprise MAY/JUNE 2008
By Marilyn Landis
n D. L
concerned. Despite our economic importance and sheer numbers, the small-business community isn t necessarily seen as unified isn’t unified voting block which creates a challenge for us. How do we urge lawmakers to recognize the importance of small business when they’re campaigning and crafting laws? The traditionally-accepted belief is that the small-business community will vote for whichever candidate they want to vote for, regardless of their small-business background. Not so. According to the 2008 NSBA Survey of Small and Mid-Sized Business, neither Republicans nor Democrats can claim a majority of small-business voters. The largest increase in party affiliation from the 2007 survey is the number of respondents who identify as Independent in 2008. What this means is that the small-business vote is up for grabs—and it is a small-business vote. When asked which issue among a wide array of issues was most important, Democrats, Republicans and Independents responded remarkably similar. Reducing the tax burden ranked first, followed by health care and regulatory reform. There are clearly a set of key issues on which candidates can reach-out to the small-business community, diverse as it is. If you are unable to attend this year’s Washington Presentation, please take a moment to reach-out to your elected officials and tell them that small-business issues matter to you. Tell them that smallbusiness needs to be considered in any kind of economic stimulus bill. Tell them that you are just one of 70 million in the smallbusiness community. Tell them that you’re voting.
ON THE TRAIL
Taking The Political Pulse: What are the polls really saying? By Greg Smith
It is no secret that politicians are cold hearted drones that lack a beating pulse, right? Wrong, well sort of. Any beltway insider will tell you the notion that politicians lack a beating pulse is nothing more than a myth. In fact, locating a politician’s pulse is as simple as looking to the polls. Ok, so maybe a politician’s physical health cannot be measured by poll numbers, but their political health can. Why are poll numbers such a vital component to assessing the health of a campaign or candidate? Pollsters will tell you that it is because the numbers never lie. What they might fail to mention is that sometimes numbers can be easily manipulated, if you hire the right people. This is even more true in a presidential primary race, one that has seen the unexpected birth and death of candidates almost overnight on both the left and right. While the mantra of the candidates has been thematic of change, some things never change – especially the reliance of candidates, campaigns, and media on the latest poll numbers. It is easy for the DC outsider to get lost in the daily barrage of numbers which is why below you can find a recap of the most reliable and non-partisan poll data on the remaining political contenders.
All data was provided by Chicago based RealClearPolitics.com (RCP). RCP is one of Americaʼs premier independent political websites. RCP culls and publishes commentary, news, polling data, and myriad other resources. RCP Polls are an average of all national polls available providing a fair, balanced, and accurate snapshot of the current political atmosphere.
Democratic Candidates Senator Barack Obama
Republican Candidates Senator John McCain
Senator Hillary Clinton Obama Clinton 48.0 42.9 Spread -- Obama +5.1
Congressman Ron Paul McCain Paul 56.7 6.5 Spread -- McCain +50.2
General Election Senator Hillary Clinton
General Election Senator Barack Obama
Senator John McCain Clinton McCain 48.0 43.5 Spread -- Clinton +4.5
Senator John McCain Obama McCain 47.8 43.4 Spread -- Obama +4.4
FROM OUR AFFILIATES Join us for three days of learning, networking and celebrating with your peers.
September 18-20, 2008 Gaylord National Resort and Convention Center Washington, D.C.
Featured Speakers Include:
Bill George on discovering authentic leadership
Rod Beckstrom on the unstoppable power of decentralized organizations
Paul Bennett on building enduring brands
Greg Alexander on benchmarking sales
Michael Gerber on awakening the entrepreneur within Michael Port on growing your business, through innovation
Ohio In Fight for Small Business Mandate Could Become Trend
By Steve Millard, COSE President & Executive Director
When Ohioans go to the polls in November, they will likely decide on an issue that could have a severe impact on Ohio’s businesses. That’s why the Council of Smaller Enterprises’ (COSE) Board of Directors voted to oppose the so-called Healthy Families Act, a ballot initiative that would require businesses with 25 or more employees to provide at least seven days of paid sick leave to full time employees, and a pro-rated amount to part-time employees. COSE will actively encourage smallbusiness owners, employees and others to vote to reject this mandated paid sick leave initiative, should it appear on the ballot. COSE believes mandatory paid sick leave will make Ohio even more unfriendly to businesses and employees by threatening in-state expansion and forcing companies to look elsewhere to set up shop. It also takes away independence, and the desire to continue to grow. In a COSE survey, members said that this initiative would make small business owners think twice before they expand to over 24 employees and risk being affected by this mandate, and 41% indicated that they would
specifically delay or cancel plans to hire additional employees. Furthermore, while the 25 employee threshold exists, small-business owners still have to compete with other businesses for the best employees. If larger businesses are forced to offer 7 days of paid sick leave to employees, employers with fewer than 25 employees may have to follow suit. Thirteen other states may also face a version of this issue at the ballot this year. If the issue passes in the first wave of states, it is likely to become a trend that will hit most of the country. In Washington D.C. and San Francisco, the two cities where this type of legislation has been enacted, and in many of the other states where it is being proposed, this same coalition of interests has written the language to include the smallest of businesses – something we fear happening in Ohio. For more information on the mandated paid sick leave issue in Ohio, log on to www.cose.org/ mandatedsickleave.
Ari Weinzweig on building a corporate vision
Bo Burlingham & Doug Tatum on sustaining your companyís highgrowth Norm Brodsky on sharpening your street smarts Marissa Mayer on creating web search strategies Register now using this special NSBA promotional code Incptnr908 to receive a $495 discount on this powerful networking event. For more information or to register visit www. Inc500Conference.com or call us at 866-447-8097.
FROM THE HILL
Plain and Simple Congressman Bruce Braley (D-Iowa) Talks About Plain Language By Congressman Braley
I know that lawyers are often blamed for the legalese that makes government documents so difficult to read and understand. Some might find it unusual that this “Plain Language” bill was introduced by someone who practiced law for 23 years before being elected to Congress. They might be surprised to learn that the use of clear, concise language in communications has been a passion of mine since I began practicing law in 1983, when the Iowa Supreme Court adopted plain language requirements for jury instructions. Since that time, I’ve been speaking and writing about the importance of using plain language to improve both written and spoken communications. I was proud to introduce the Plain Language in Government Communications Act, a bill that requires the federal government to write documents such as letters from the Small Business Administration or a notice from the Department of Veterans Affairs in simple, easy-to-understand language. And I was pleased that the National Small Business Association (NSBA) was one of the first groups to endorse this legislation. Since then I have held a hearing in my Small Business Subcommittee on Contracting and Technology, where NSBA President Todd McCracken testified so eloquently. He talked about the important contributions small businesses make to our economy. He also discussed the substantial benefits small businesses will see by eliminating federal gobbledygook. We all understand small businesses often have limited resources and are forced to hire lawyers and outside consultants to navigate the maze of federal paperwork and convoluted language. The use of clear, easy to understand language in government paperwork will substantially reduce burdens on small businesses. Writing government documents in plain language will increase government accountability and will save smallbusiness owners time and money. Plain, straightforward language makes it easy for taxpayers to understand what the federal government is doing and what services it is 6
offering. The Plain Language in Government Communications Act will require the federal government to write new publications, forms, and publicly distributed documents in a “clear, concise, well-organized” manner. I am encouraged this legislation has passed the House and am optimistic that we will continue to see action on Senator Daniel Akaka’s companion bill in the Senate. I hope this bill makes it easier for Americans and small businesses to work with and understand their government. I also hope that, in some small way, this bill honors the memory of our former colleague,
Maury Maverick, Sr., who served two terms in the House from 1935-1939. Congressman Maverick invented the term “gobbledygook” to describe bureaucratic language that was as hard to understand as the call of wild turkeys in his native South Texas. I want to thank the NSBA and others who join me in standing up for plain language … in standing up for effective communications with our constituents … in standing up for small-business owners … and in standing up for the taxpayers, who will see significant time - and cost-savings when this bill is signed into law.
With the Network,
you can work in more spots than just hotspots. With Wi-Fi, you’re trapped. Confined to hotspots. Get BroadbandAccess for your Mac or PC from Verizon Wireless and work in more spots than just hotspots. Simply click to connect and start working on the go, all on America’s most reliable wireless broadband network.
Limited Time Offer
USB wireless modem for your Mac or PC
UM 150 USB Modem $50.00 2-yr. price -$50.00 mail-in rebate with new 2-yr. activation on a $39.99/50MB BroadbandAccess plan.
For mobile broadband solutions for your small business, let Verizon Wireless be your “go-to” guy. Call 1.800.VZW.4BIZ
Visit your local Verizon Wireless Store
Activation fee/line: $35. IMPORTANT CONSUMER INFORMATION: Subject to Customer Agmt, Calling Plan, rebate form and credit approval. Up to $175 early termination fee, and other charges. BroadbandAccess is available to more than 240 million people in 248 major metropolitan areas. Offers and coverage, varying by service, not available everywhere. Rebate takes up to 6 weeks. Limited time offer. While supplies last. Shipping charges may apply. See verizonwireless.com/bestnetwork for details. ©2008 Verizon Wireless.
Customer Satisfaction Surverys A Business Weapon By Ken Cuccinelli
The leader stands confidently, surrounded by battle plans, scout reports and all information on the enemies readily available. Through the use of research and preparation, the leader becomes capable of assuring victory before the battle even begins. Okay, perhaps small-business owners don’t exactly have to deal with enemy fire, mutiny and scout reports. However, as customers change and the competition grows, it can certainly feel like a more personal and modern day version of that battle. A crucial tactic in the business world is using customer satisfaction surveys, which prepare the business, product and owner at a relatively low cost and help prepare in developing strategies. Surveying customer satisfaction provides critical information and direction. It identifies the needs and wants of the market, showcases desired product features, pricing, decision makers, distribution channels and motivation to buy. We’re all familiar with those infamous “gut feelings” people have in regards to business, but even the greatest leaders cannot rely solely upon instinct. Technological advancements have developed the field of customer satisfaction, with the result being more affordable surveying and the increased ability to meet a company’s specific needs. A newly created technology is a computer voice recognition survey, a state-of-theart concept that has an automated system call customers to measure their satisfaction through personalized questioning. This customized technology has an increased rate of completion versus traditional mail questionnaires, is more cost effective than human call centers, and is cheaper than postage. Businesses also can lead clients to online surveys through email or print, which is available at a low cost. If a company’s 8
preference still lies with conducting paper surveys there are comment reply cards, with the design, printing and postage also available at lower prices. A last unique and useful angle is contacting a local business school and having them use the survey as a class project. Another inexpensive way to get the information you need is to work with your local university or college. They are always looking for real life projects for their students. Contact the business school or market research department and see if they would consider your need as a class project. The only issue with this is that they work on a semester timeframe. If you can live with their schedule you can get great results for almost no cost When taking the time and money to perform a customer survey, it is then crucial that the questions are an integration of qualitative and quantitative. It is
helpful to gain detailed customer comments from a qualitative-styled question, but equally beneficial are quantitative ones that obtain data in the form of precise statistics that aid in forming a business strategy. Quantitative data also allows you to benchmark yourself against future measurements. A defeat in war can result in loss for army, people and country. In the business world it can also mean a tragic loss for small businesses and their employees. No one is entirely certain what will occur in the future, but being prepared through utilizing customer surveys can help in averting those losses. Ken Cuccinelli is Chairman of Quest Fore Inc , a Strategic Marketing company headquartered in Pittsburgh PA. For more information he can be reached via email at email@example.com
DIVISION OF BUSINESS SERVICES CUSTOMER SATISFACTION SURVEY
SMALL BUSINESS TRENDS Start Making Technology Work for You Barriers to getting, serving and keeping customers will be knocked down and business owners will be able to work on their time and on their terms. By Rick Jensen
Small-business owners are conflicted. The combination of a jittery economy and the uncertainty of an upcoming Presidential election leaves many to wonder about how to prepare for the future. More than 70 percent of American small business owners view the economy as worse than it was five years ago, according to a recently released NSBA survey. At the same time, 70 percent remain confident in the future of their business. What’s behind this apparent contradiction? Small-business owners have an inherent confidence in themselves and their dreams. And they believe that new technologies can help ready them for the future and help make those dreams a reality. Those entrepreneurs who embrace technology will be more successful than their technology-wary counterparts, according to the Intuit Future of Small Business Report. The trend toward technologically savvy small business owners is hardly new. In fact, 45 percent of smallbusinesses already have a Web presence, according to Warrillow research. The next generation of the Web will play a new role in customer acquisition for small business owners, transforming and expanding the relationships between customers, partners and suppliers beyond their neighborhood and into the virtual arena. In addition, using technology to provide potential customers with the right information in the right context at the right time MAY/JUNE 2008
will be just as important for local businesses as those with global aspirations, the Intuit study found. Many successful small businesses will increasingly market themselves through the connected world of cars and cell phones. For example, a local restaurant may send out a promotional coupon to a customer’s GPS car navigation screen if that customer is in the area. Similarly, a boutique dress shop may send a message to a shopper’s cell phone, alerting her to the latest arrivals. Technology that provides customers with relevant information will be key to the success of tomorrow’s small businesses. The future of smallbusiness management will see mobile devices giving smallbusiness owners even more freedom to work anytime and anywhere. These devices will become central to smallbusiness management as the expansion of mobile networks and new display technologies make them a lot more than a communications tool. While some of these technology trends are still in development, here are five things small-business owners can do today to make sure they are taking full advantage of technology: ESTABLISH A WEB PRESENCE: It’s as important as having a business card. Eighty percent of consumers search online for local products and services. Make sure your Web site covers the basics: who you are, what you’re good at and how to reach
you. Include key words that will help customers find you when conducting searches. Consider that your presence on the Web extends beyond your site and can include a blog, an eBay or Amazon store and a social network profile. VISIT ONLINE MAP AND LISTING SITES: Many new customers may find your business through search and directory listings like Google Maps, Yahoo Local or YellowPages. com. Visit these high traffic sites and verify that your information is correct. Supplement your listing with additional details, photos, and customer references, if appropriate. JOIN AN ONLINE COMMUNITY: Communities are often based on trade, industry or geography and give you access to a peer network for advice and support. Visit a community like JumpUp.com to expand your online network or Meetup.com to find local networks that meet in-person. Whether online or offline, start developing relationships before you need them. MONITOR A FEW KEY REVIEW AND OPINION SITES: Sites such as Yelp.com, Judy’s Book, and TripAdvisor. com provide user reviews on products and services. Look at what people are saying (or not saying) about you and encourage your most loyal customers to rate your business. FIND A BETTER, CHEAPER WAY TO WORK: Many free
or inexpensive products and services can often replace something you’re using today. For instance, use Skype instead of traditional long distance phone service, toss your fax machine and start using YouSendIt, or use Constant Contact instead of sending mass e-mails. Adopting new and better ways of doing business will help you better prepare for larger technological changes ahead. Take the time to learn about emerging technologies that can make your business more competitive and start putting technology to work for you. It’s an investment you can’t afford not to make. The Intuit Future of Small Business Report is a threepart study that examines the prospects, influences and profiles of small businesses over the next decade. The reports and related resources can be found at www.intuit.com/ futureofsmallbusiness. Rick Jensen is senior vice president and general manager of Intuit’s small business group, providing business and financial management solutions for small and mid-sized businesses. In addition to its flagship products and services including QuickBooks®, Quicken® and TurboTax® software, Intuit Inc. provides small businesses the ability to create and host their own web sites with Homestead. com. A variety of tools to help you inexpensively market your business online are available at marketingtools.intuit.com.
NSBA SURVEY RESULTS Economic Outlook Lowest in 15 Years By Molly Brogan
America’s small businesses are waving the yellow flag, according to new survey data from NSBA. The past year has not been a good one for the small-business economy, and projections for the next twelve months are even less optimistic. The number-one issue on most small-business owners’ minds: the economy. “Our survey shows plain and clear how the economic slowdown is affecting small business. When asked last year about their economic outlook, a majority of smallbusiness owners responded positively,” stated NSBA President Todd McCracken. “This year, a whopping 71 percent have a negative outlook on the economy—clearly small business is feeling the pinch.” The 2008 NSBA Survey of Small and Mid-Sized Business—released mid-April— provides an in-depth look at the state of the small-business community, as well as small-business owners’ opinions on a broad range of topics including economic outlook, financing, employee benefits, energy costs and the upcoming elections. The survey was conducted by Public Opinion Strategies on behalf of NSBA Feb. 15 - 25, 2008, and used a representative sampling of the U.S. smallbusiness community. ECONOMIC OUTLOOK Small businesses are buckling down, with nearly a quarter reporting no growth strategies planned for the coming year. 10
Sales and profits are down, and fewer jobs are being created in 2008 than at any period since 1993 when the survey began. Nearly half of all business owners (45 percent) expect a recession in the next year, while the same number expect a flat economy. Just nine percent say they anticipate economic expansion. Fifty percent of those surveyed say “economic uncertainty” is one of the most significant challenges they face to the growth and survival of their business, with the cost of health insurance (35 percent) and lack of available capital (32 percent) rounding out the top three. When asked whether they have experienced in the last year, or expect in the next year, changes in gross sales revenue, net profits, number of employees, and employee compensation, responses were very conservative. Sales and profits are down, and fewer jobs are being created in 2008 than at any period over the last 15 years during which this survey has been conducted. Equally as concerning, the outlook of business owners for the next twelve months is less optimistic that at any point since 1993. Fewer companies report expectations for increases in sales or profits, and fewer than one out of four companies expect to bring on more employees. On a slightly more encouraging note, small-business owners remain confident in their own futures. Seventy percent (70 percent) of all business owners say they ADVOCATE
are confident in the future of their business. However, this does mark a noteworthy drop from last year, when 81 percent of business owners said they were confident in their business’ future. Unfortunately, that confidence is not shared equally, with only 64 percent of companies with four or fewer employees expressing confidence in their future. “While the 2008 NSBA Small Business Survey finds that small businesses have a very negative outlook about the economy as a whole, they remain somewhat optimistic about their own prospects,” said Glen Bolger, partner and co-founder of Public Opinion Strategies. “This tracks closely with what we’d expect to see from self-starting entrepreneurs.” FINANCING Businesses of all sizes are feeling the impact of the credit crunch, more than half said they have faced difficulty securing credit over the last year. Despite the increasing difficulty, 70 percent of companies surveyed say they are able to obtain adequate financing, which is essentially no different from 2007. However, America’s smallest companies do face bigger hurdles – over one-third (35 percent) of companies with four or fewer employees say they cannot get the financing they need. In a trend befitting the last six to eight years, credit cards continue to be one of MAY/JUNE 2008
FEATURE ARTICLE the primary sources of financing for small businesses. Forty-four percent of small businesses have used a credit card in the last twelve months to help finance their capital needs. Smaller companies are the most reliant on credit cards—of those companies earning between $100,000 and $500,000, 55 percent rely on credit cards for needed capital. Credit cards continue to be the largest primary source of financing for small businesses, yet 57 percent report that their credit card terms are worsening. Fifty-four percent of small businesses have some type of business loan. To leverage these loans, business owners look to credit cards, personal savings, and their homes as primary sources. Certainly, if capital were more widely available, companies would be making new investments. Seventy-two percent of respondents said they would make changes to their company if they had additional capital. The top three changes they “How do you leverage your business loans?” would maker Second Mortgage Personal Savings are investing Business Savings 11% 10% 8% 2% Bank Loan in advertising, 2% Collateral Personal or Business h i r i n g 1% Other 20% Credit Cards additional 46% employees, Do Not Have Loans and investing in a new plant or equipment. EMPLOYEE BENEFITS Economic conditions also take a toll on employee compensation and benefits, and small businesses have struggled in the past year to keep up with the benefits workers want. Seven out of ten small-business owners cite health insurance as the most important benefit to prospective employees, yet only 25 percent of companies with four or fewer employees is able to offer it. Overall, the significant trend of fewer companies offering health benefits continues. In the 2000 survey, 51 percent of companies surveyed were offering a health benefit. That number dropped to 41 percent in 2007, and to a low of 38 percent in 2008. For the larger small businesses which are more likely to provide a health benefit, 71 percent are aggressively seeking ways to trim costs, including passing more of the costs on to their employees, or changing policies to ones with higher deductibles and co-pays. While small-business owners want the issue of health care to be addressed, 70 percent reject the idea of an employer mandate, and instead prefer (66 percent) an individual mandate. ENERGY COSTS Energy prices are also placing a heavy toll on America’s small businesses. Spikes in energy costs have negatively impacted 77 percent of small-business owners. In response to those rising costs, 37 percent of businesses have increased MAY/JUNE 2008
their prices and 33 percent have reduced their business travel. Despite the following responses being statistically lower, even more alarming is the fact that energy “In the last 12 months, have the prices you pay for the energy consumed at your business gone up or gone down?” costs have forced 10 percent of small businesses to reduce 96% their workforce, and 11 percent to cut their production schedule. The one 4% silver-lining to the increased energy Gone Up Gone Down costs is the fact that 18 percent of companies impacted have taken steps to invest in more energy efficient equipment or upgrades. UPCOMING ELECTIONS When asked about politics, respondents identified reducing the tax burden (40 percent) as their number one issue in the presidential elections, followed by health care costs (32 percent). The split between Democrats and Republicans also appears to be narrowing—in 2007, 54 percent identified as Republican whereas in 2008, 48 percent identify as Republican. Respondents identifying as Independent saw a spike of four points while Democrats gained three points from 2007. Reducing the tax burden ranked number one among Republicans and Independents and number two among Democrats, while addressing health care costs ranked number one for Democrats. Reducing the regulatory burden on small business came in a strong third for all three groups. “Which one of the following issues would be most important to your business as you consider who you might vote for in the next election for President?”
Reducing the tax burden
Addressing health care costs Reducing the regulatory burden on businesses Improving education for a qualified domestic workforce Other Handling of Iraq
14% 6% 2% 1%
NSBA has been conducting this survey since 1993, and it continues to be an important resource on the small-business community. For more information, please visit the NSBA Web site at http://www.nsba.biz/docs/2008bizsurvey.pdf to view the full survey results.
Battle on the Hill SBTC is fighting to keep “small business” in SBIR Program by Jere Glover & Jim Morrison
The U.S. Senate is considering legislation that could dramatically affect many small, technologybased companies. SBTC has no plans to sit back and allow such legislation come to fruition. SBTC, working in conjuction with NSBA, is launching an initiative to actively educate and persuade members of Congress about the negative effects H.R. 5819 will have on small businesses. H.R. 5819, which passed through the House of Representative, would make major changes in the Small Business Innovation Research (SBIR) Program. SBIR is the largest single source of early-stage capital for R&D in the United States. The program also accounts for over half the R&D contracts that small companies win from the
federal government. H.R. 5819 is now on a fast track in the Senate and would radically change SBIR if passed. While SBTC favors the renewal of the SBIR Program, also a top priority for NSBA, the program is set to expire in September if Congress does not act. Unfortunately, the bill that the House passed and the Senate is considering to extend SBIR unravels many of the strengths and safeguards of the program. That is why SBTC is ramping up its efforts and gathering the necessary resources needed to battle with special interest groups on the Hill. SBTC has recently taken several steps to help equip its members to speak on the issue. Among these steps are myriad resources added to the SBTC website; a scheduled Congressional fly-in for June 4 - 5; and the establishment of the online donating portal - the SBIR Reauthorization Victory Fund. To find out more information on how you can help keep the SBIR Program intact please visit
Why Limit Your Business Potential? Do you want to gain additional value and benefits from your NSBA membership? If so, join one of of NSBA’s councils for a nominal yearly fee. It is a great way to compliment your NSBA Membership, expand your business network, and gain access to valuable resources. Visit www.NSBA.biz for more details.
Sounding Off: SBEA Testifies Before Congress on the Power & Potential of Small Business Exports by Jim Morrison
More small businesses could be increasing their sales through exports, and the U.S. could be lowering its trade deficit, with better coordination of the government’s export promotion efforts, the Small Business Exporters Association of the U.S. told Congress during an April hearing. SBEA, the international trade council of NSBA, testified before a panel of the Foreign Affairs Committee of the U.S. House of Representatives on April 24. SBEA President Jim Morrison reminded the panel of the “good news / bad news” about small-business exporting. “Over 230,000 small businesses in the U.S. are exporting, and they’re selling more than $450 billion worth of American goods and services,” Morrison noted, “which is a scale of small-business exporting that relatively few Americans are aware of. Indeed, 97% of all U.S. exporters are small. And over 80% 12
have five employees or fewer.” “The bad news is that these statistics are a fraction of what they could be. With more than 26 million small businesses in America, the number of small-business exporters still represents only about 1% of all small businesses.” SBEA urged Congress to improve the percentage of U.S. small-business exporters by improving export promotion coordination among the 20+ federal agencies that play a role in international trade. This coordination is currently managed by a small office deep in the Commerce Department, which is supposed to be telling its own boss, the Secretary of Commerce, as well as other Cabinet officers and agency heads, what to do. Morrison suggested that the coordination be done by an office in the White House, in conjunction with the White House Office of Management and Budget, which establishes agency budgets. A bill to accomplish this (H. R. 5883) has been introduced by Representatives Don Manzullo (R-IL) and John Mica (R-FL). ADVOCATE
ELITE MARKETING GROUP Providing a different kind of experience. By Greg Smith
ith the continuing explosion of information providers and communication mediums, both marketers and customers are overwhelmed by today’s flow of information. The question on everyone’s mind is, what is the most effective way to reach my target audience? While the question begets a variety of answers, one NSBA member believes the solution is simple – experience. Elite Marketing Group is an experiential marketing agency with a proven track record of over 35 years in targeting, captivating, and inspiring consumers. While experiential marketing is not exactly a new discipline, only recently has it gained serious traction in
becoming an integral part of the marketing communication mix. The term “experiential marketing” refers to actual customer experiences with the brands, products, or services that drive sales as well as increase brand image and awareness. It is the difference between telling people about features of a product or service and letting them experience the benefits for themselves. When done right, it’s the most powerful tool out there to win brand loyalty and increase a company’s bottom line profits. Howard Horowitz, owner and founder of Elite Marketing Group, realizes the potential and power that experiential marketing offers, and believes it holds the greatest opportunity for growing his business in the next five years. Horowitz has already worked to leverage this part of his business with a new office in Manhattan and increased personnel to take advantage of a growing industry segment. Horowitz is an entrepreneur at heart. His distinct style of entrepreneurship led him to create a unique experience – for the consumer, his employees, and even himself. As Horowitz points out “I like being my own boss. I am extremely driven to the point where no boss would ever ask me to do the things that I ask of myself.” Helping Horowitz along the way are the 80 employees that compose the Elite Marketing Group Family. While Horowitz strives to create a productive and enjoyable experience for everyone, he does acknowledge that sometimes there are influencing factors that remain out of his control.
“When 9/11 hit us the financial institutions we represented basically closed shop, which deeply impacted our firm and forced us to cut our staff by over 50% to sustain ourselves,” Horowitz remembers. Elite Marketing Group is not the first small business to encounter such trying times. However, the agency’s ability to navigate through the rough times would not have been possible without looking to the future. “I have always left capital in the business when times were good so that we would have the ability to make it through the times that were bad.” As he explains, “in the end this approach has left my agency stronger and significantly more successful then we had been previously.” Horowitz realizes not all businesses are as fortunate as his, which is why he believes there are several steps the federal government could take to create a more friendly small business experience. “It is in Congresses best interest to fight for this segment so it can provide more jobs and contribute to the overall health of the economy, which it can do through continuing to introduce legislation that helps small businesses succeed.” Recognizing that the federal government was not creating an optimal experience for small-business owners, Elite Marketing Group looked to NSBA to help voice its legislative concerns. “When I reviewed what NSBA stood for, I was extremely impressed. I felt that they were an organization that fights for small businesses.”
NSBA Announces Finalists for Advocate of the Year Award NSBA announces the finalists for the 2008 Small Business Advocate of the Year. After evaluating a very impressive pool of candidates, NSBA is pleased to recognize five outstanding small-business owners who have gone above and beyond in advocating on behalf of America’s small businesses. In addition to highlighting outstanding achievements from the best of the smallbusiness community, the award holds special significance this year. In 2008, for the first time, it will be made in honor of the late Lewis Shattuck, the pioneering smallMAY/JUNE 2008
business advocate and long-time president of the Smaller Business Association of New England. The 2008 Finalists for the Advocate of the Year Award include: P.J. Goel of Washington, DC-based Goel Services, Inc; Harold Jackson, co-founder of Buffalo Supply, Inc. in Lafayette, Colorado; Anthony Jiminez, President and CEO of Vienna, Virginia based MicroTech, LLC; Ron Klein, founder and CEO of Belzon, based in Huntsville, Alabama; and Joseph Melookaran, founder of JMA Chartered and JMA Information Technology (JMAADVOCATE
IT) in Overland Park, Kansas. The criteria used in determining award finalists was: a commitment to smallbusiness advocacy, a proven history of volunteer activism on behalf of the smallbusiness community, and success and growth as a small-business owner. The five finalists and one winner will be recognized at the annual Small Business Advocate of the Year Award Luncheon on June 3, 2008, held in conjunction with the NSBA Washington Presentation in Washington, D.C. To view a complete profile of the finalists please visit www.nsba.biz. 13
ADVOCACY & EVENTS
June NSBA 3 – June 4 Wash ingto n Pre June senta Join -Novemb tion 7 e 0 r M Cam illion paig Stron n. g&V oting
NSBA l 6, 200 8 Land Chair M arily is t e befo n stifie d r Com e the U. S. Se mitte n and Entre e on Sm ate hea a p ll Bu r e rin n of th g entit eurship siness le at e d Busin Credit C , “The I a m ess.” runc h on pact Sma ll
April 23, 2008 NSBA President Todd McCracken participated in the National Small Business Week Energy Forum: “Meeting the Energy Challenge: Impacts & Opportunities for Small Business.”
08 08 , 20 sed 20 6 1 d il Apr Relea all an A m s B S s S f e . N ey o Busin v r u d S -Size Mid
April 3, 2008 Staff attended a Senate Finance Committee hearing entitled, “Outside the Box on Estate Tax Reform: Reviewing Ideas to Simplify Planning
d 08 , 20 ttende 5 2 l i a r f e af Ap nt n th A st me NSB vent o Assess e an nomic rman- .” o e ill c E “ Lieb ate B e h m of t er Cli rn Wa
Ap ri NSB l 2,200 A st 8 af for S ma f met w ll Env ith t Busin iro h Sma nmen ess an e Cen ter d th t, EN ll Bu e E rep s rese iness p RGY S T rog nta and ram AR tiv r to d enewa es from , and iscu b ss m le ene the cle a icro r -po gy indu n wer strie . s
April 1, 2008 NSBA staff met with representatives from the small and minority contracting industries to discuss federal procurement.
May 6, 2008 NSBA staff attended an Environmental and Energy Study Institute event entitled, “Can Renewable Energy Meet the Urgent Challenge of Climate Change?”
April 2008 Staff attends meetings to discuss the 3-percent withholding on Government Contracts issue.
2008 y a s M eeting April ded m d n e t t a an Staff Senate ith key ers to Ap w ril 2 staff 1 House gain Nat NSBA -25, 2 e and iona 008 educat r the Equity Spo fo l Sm n all B sored support ation’s Selfusin N 660 r u ess for O . (H.R. 3 t c A d We e ek. Employ 39) 2 2 . S d an
NSB rch 5, 2 the PA staff pa008 Tech olicy Tou rticipate Indu nology a r of the d in stries C orga nd Susta lean nizat inab le ion.
8 2, 200 ith May 1 tw e m taff NSBA s tatives of n represe ral Reserve e d e the F their discuss o t ff form a t s card re e it Board d re ed c eptiv propos Unfair or Dec “ n rule o es.” Practic Acts or April 30, 2008 with the NSBA staff met e. Apollo Allianc May 12, 2008 with the NSBA staff met Chamber of U.S. Hispanic Commerce.
08 il 20 ended r p A nce f att Staf te Fina a Sen mittee discuss g Com tings to ic ortin n mee electro rd rep a the ment c posal. y r pa ap p o g tax
Pho h to By: By: Tony By Tony Wan Ke Kenob n i nob
Hear from policy experts and lawmakers in Washington, D.C. on the key issues for small business. Held at the Capital Hilton Hotel just blocks from the White House, you will get the inside scoop on the elections, share breakfast with influential members of Congress, and make important hill-visits to lobby on the issues that matter to you. Please visit www.nsba.biz for more details!
June 3 - 4, 2008
1156 15th Street NW Washington, DC 20005 nsba.biz