Taking the pulse of small business
Carroll: Our members are self-employed, partnerships and owners involved in every kind of business or trade. The majority are family-owned businesses, with less than 10 employees. However, we do have members that have grown well beyond that level. SBSB started with me knocking on doors and signing up new members. We incorporated in 1968, and today we serve more than 30,000 small business members around the country.
WBJ: Which of your services are most in demand?
Carroll: Access to health and dental plans, as well as other insurance benefits. Not only do we help members obtain coverage at reasonable prices, but we also serve as an advocate when members encounter problems or questions with insurance carriers.
In terms of advocacy, we survey our members on an ongoing basis to set our Legislative Agenda. Among the key issues that concern them are taxes, regulations, and health care costs. In a recent poll of our members, 76% of respondents said that the federal government should take steps to reduce and control the price of fuel.
WBJ: What special challenges do your Massachusetts members face?
Carroll: They pay some of the highest health care premiums in the country. Currently being debated in the state legislature is an employer mandate that would significantly impact small companies and likely make it harder for them to compete, particularly if they have to provide insurance coverage for part-time staff. Other concerns include the high costs of labor and energy.
WBJ: How can government help?
Carroll: At the federal level, we should eliminate the Estate Tax—or allow at least $10 million to be exempt. We also need to lighten the burden of the Alternative Minimum Tax and extend the current schedule for Business Equipment Depreciation deductions, which is slated to drop from $100,000 to $25,000 in 2007. In Massachusetts, we should implement the Sales Tax Retention program, so small companies in the Commonwealth can receive up to $2,000 of the sales tax they collect for the state. This provision already exists in several neighboring states.
WBJ: How can new businesses increase their chances for success?
Carroll: We’ve put together a Ten Commandments for Small Business success, which starts with learning as much as you can beforehand about the business you want to start or buy. For example, take a part-time or full-time job in that field. You also need to develop a good business plan and keep expenses tightly under control, especially during the critical first three years when so many new firms fail. In addition, you need to establish good relationships with a banker, lawyer, and accountant who have experience working with small businesses. On our website (www.sbsb), you can learn about such issues in our "Starting Your Own Business Toolkit."
WBJ: Despite these obstacles, is it a good time to start a business?
Carroll: Most any time is a good time to launch a business in the U.S., but be ready for challenges. A recent poll of our members showed that 42 percent of respondents thought that the business climate for small business would deteriorate in 2006. Just 14 percent looked for improving conditions. On the plus side, computer technology has opened up many opportunities for home-based businesses.
WBJ: To what extent are small businesses finding opportunities in emerging countries?
Carroll: The SBSB has led a number of trade missions to China, and we have witnessed many success stories there. One of the best paths to growing a business to China is to partner with a company that has already established a presence there. This year, our organization hopes to set up a new buying club. It will link small businesses here with contract manufacturers, distributors, suppliers and other business partners not just in foreign countries, but in the U.S. as well.
This interview was conducted and edited for length by WBJ Chief Editor Larry Maloney.
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