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Friday, November 14, 2014

Why Small Businesses Are Disappearing..

They say the economy is improving by the day..  

They point to all the pie charts and bar graphs, the Dow and NASDAQ and S&P and ABC and 123..

And yet small businesses are becoming more and more a thing of the past..


No better person to answer than a small business owner..
The following opinions were expressed by a 27yr old small business owner in Sacramento, Ca who owns and runs a furniture store he started up a few years back with $15k start-up.

They seemed like sensible opinions based on someone with experience so we publish without comment, thus the following is the views of the business owner, not ours...

1)  Small Business Loans - Although they are not killing small business they sure as hell don't help anyone. Unless you are opening a unique small business you are not going to get any funding. By unique i mean something along the lines of creating solar panels.

According to a recent investigation by the SBA (Small Business Administration) Inspector General, over 75% of SBA loans went to large businesses. So basically if you want to open a normal business you need a ton of collateral and a miracle to get a loan.
2)  Permits and Licensing - In opening my specific business the first year totaled about $2000.00.

3)  Advertising - Many small business's cant afford to take out pages or flyers in the news paper or TV ads so they only have a few choices such as Yelp! (online site) or the Penny-saver. (Don't get me started in Yelp!).

4)  Street Advertising - While this used to be a good portion of how you get business it is now off limits. Code enforcement will not allow you to put anything outside.

No balloons, signs, anything with your store name, window paint more than 50%, or any mattresses. Also delivery vehicles can not be closer than 50 feet from the curb. In my case that means behind the building.
5)  Board of Equalization - Cant go into to much detail here but they sure as hell aren't here to help.

**  The Board of Equalization administers California's sales and use, fuel, alcohol, tobacco, and other taxes and collects fees that fund specific state programs

6)  Health Insurance - Now obviously with the people that have a large work force working full time they will be hit hard by Obamacare, but i wanted to give you a perspective on a single person.

The cheapest rate for myself and me only, and believe me i have looked around, is $250.00/month. Some might say oh that's not bad, but let me explain what that covers, NOTHING lol. Basically if something happens to me i have to shell out 6K before insurance gets involved. Also $100 dollar co-pay every time i go.
7)  The Economy - While many know that when the President comes on TV and says the economy is doing great, we all know it is not, some people don't. Every month more people drop out of the Labor Force and the number of families on food stamps is sky rocketing.

So for those of you who don't know the economy is terrible because of all the top stories of Kim Kardashian and whoever else, lots of people in America are struggling.

8)  Merchant Fees - This is for credit card processing machines. The machine itself costs $600.00 plus the percentages on sales and cards.

Companies such as BofA charge once a year on top of the regular fees $150.00 to protect you from fraud (which they can't even stop) and yes its mandatory. Paypal or Square seem to be the best options these days.
9)  Fire Department - Yes even the Fire Department wants a piece. Starting last year you must do your own visual inspection and send them a check for $150!   Basically if you don't they will come to your store and give you a million violations for wasting there time.

We at A&G are not from California so we can't comment one way or another how accurate the business owner's situation is in Sacramento..

We can say that local and state government always bend over backward to help corporations and large businesses with free land, tax breaks, etc..

And the small business owner always gets the short end of the stick.