Tuesday, November 13, 2012

O.C. business owners seek clarity from President, Congress ...

Now that the elections are over, Orange County small-business owners are hoping President Barack Obama and Congress will deal with some pressing issues that impact businesses.

Many entrepreneurs traditionally have told government, as Anaheim construction executive Adam Vali does, "leave me alone." The president of DEB Construction Inc. adds, "I will rely on my own work ethic, intelligence and luck to build a business that will be sustainable. I don't ask for your assistance. Just don't create policies that interfere or disincentivize me from creating jobs."

Tim Telles owner of Tribeca Salon in Aliso Viejo says that if individuals and businesses must live within their budgets, the federal government should also.

H. LORREN AU JR., THE ORANGE COUNTY REGISTER

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Yet most acknowledge that government actions that affect business aren't going to end. The Register asked several hundred Orange County business owners after the election what they want Congress and the president to do or undo. More than 50 responded, sharing their views on federal taxes and spending, the deficit and debt, the new health care law, regulations and access to capital.

"If nothing else, give us clear guidelines on the rules and regulations that will be imposed as soon as possible," said consultant Rachel Owens, partner of Succession Strategies in Santa Ana. "The aura of uncertainty makes me and my clients overly cautious and unable to confidently plan for the future."

Owens voiced a common theme among respondents. So did Bob Richardson, owner of RWR Graphics & Printing in Huntington Beach, who said, "My hope is the new Congress will try and work together. ... Standing on principle is admirable but knowing how to compromise is even more admirable."

Mark Klein, president of Innovative Health Products in Santa Ana, added, "Work together and instill some fiscal responsibility."

TAXES AND SPENDING

If Congress and the president do nothing, 2013 will bring $100 billion in automatic federal spending cuts and $400 billion in tax increases as George W. Bush-era tax cuts and a temporary payroll tax cut expire. This combination has been dubbed the fiscal cliff that might lead to a recession.

While politicians work on a compromise, more than a third of voters in an online Wall Street Journal poll said the best thing government can do to help small businesses is lower taxes. It was the top answer, or as Tim Telles, owner of Tribeca Salon in Aliso Viejo, said, "How about cut the spending and live within the budget like the rest of us do?"

Irvine CPA Rick McCarthy offered more specifics. "I'd like to see ... across-the-board tax cuts, bold cuts in entitlement and other spending, tort reform to deal with one of the biggest factors in rising health care costs ... and immediate real resolution of the fiscal cliff and debt ceiling instead of the usual shell game."

Thomas Perrin, CEO of Frontline Management Inc., a Lake Forest precision instruments consultant, added, "Don't let the 'Bush tax cuts' expire. Don't fund 'Obamacare,' don't increase taxes or impose more regulations on small business."

Ladera Ranch business coach Ric Franzi shared his own list, saying, "Address Social Security and Medicare. Resolve our chronic deficit spending behavior through moderation of spending and raising taxes or closing loop holes."

DEFICIT AND DEBT

The federal budget has run a $1 trillion deficit in each of the past four years, according to the Congressional Budget Office, and the national debt exceeds $16.2 trillion.

That debt concerns many business owners, according to a survey by Sageworks, a financial analyst of privately owned companies. Almost three out of four respondents to the online survey said the national debt makes them less likely to hire more workers and the same percentage said it makes them less likely to boost capital investment in their companies.

"Businesses understand that the national debt is bound to result eventually in an increase in the cost of their own borrowing," said Sageworks CEO Brian Hamilton.

Richardson of RWR Marketing said, "If this new Congress can give us a balanced budget with a realistic (debt) reduction plan, you will start to see businesses spending some of the money they have been hoarding based on uncertainty."

HEALTH CARE ACT

With Obama's re-election, the Affordable Healthcare Act will be fully implemented.

"Employers have been happily ignoring this law in the hope it would go away. Now that we know it is not, employers need to understand the various cost impacts," said employee benefits consultant Kelly Moore, president of Moore Benefits Inc. in Irvine.

"The question employers must ask themselves is, 'Will my business be better off with employees who are covered under an employer-sponsored benefits program or will it be better to let people buy coverage on their own or through the exchange?' Moore said."

Executive coach Peter Leets of the Leets Consortium in Irvine added, "We anticipate Obamacare will further dilute health care quality generally while increasing our health care cost for employees."

Marketing consultant Cap Poore added that entrepreneurs who own homes or company buildings must now plan under the health care law on paying a 6 percent tax when they sell the property. He would like Congress and the president to modify the law but doesn't expect that to happen.

REGULATIONS, RED TAPE

Cutting red tape was the second most popular answer to the question, "What's the best thing government can do to help small business?" in a Wall Street Journal poll.

"I keep hearing the same outcry: Cut the red tape and regulations that suppress business growth," said antique seller Mike Aversa, owner of Aversa Estate Service in Yorba Linda. "That goes double for the state of California."

Michael Hugh, president of Southern California industrial painting contractor Pacific Titan, said, "Do away with the Environmental Protection Agency and other nonelected agencies and open up drilling on federal lands and offshore."

ACCESS TO CAPITAL

More than 40 percent of small businesses have sought and failed to get loans or investors in the past four years, according to a survey by the National Small Business Association, and 30 percent have had loans or lines of credit reduced during that time. "There is a clear correlation to a small-business owner's ability to hire and his/her ability to get financing," the NSBA said, citing 19 years of data.

Laguna Hills CPA Merv Anderson said, "Many of my clients have been in survival mode for four years. ... Make it easier for small businesses to obtain bank financing. Make it easier for small businesses to raise start-up cash without the extraordinary costs of compliance and regulation."

Carl Hagmier at Aliso Viejo online marketing firm Nett Solutions added, "The president and Congress need to stop giving the banks virtually free money and not require that they use it to make loans."

He was referring to some community banks taking money from the $30 billion Small Business Lending Fund and using it to repay Troubled Asset Relief Program loans rather than make loans to small firms.

Regardless of what the federal government does next, the election did not end the anxiety that the recession and slow recovery have caused among business owners.

"I can only pray that it won't get worse," said Virginia Zlaket of Zlaket's Market in Garden Grove. "With continued high unemployment, under-employment, unsustainable debt, high wholesale costs and taxes, we're traveling on shaky ground."

Contact the writer: 714-96-7927 or jnorman@ocregister.com


Source: http://www.ocregister.com/articles/business-377492-small-president.html

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