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[unable to retrieve full-text content]The Bush Institute has, under the leadership of Amity Shlaes, launched what it calls the 4% Project: a massive intellectual and research effort aimed at better understanding economic growth and, ambitiously, pushing the American economy toward four percent annual GDP…
Small business owners have been complaining that poor sales are their No. 1 problem (PDF) since the early days of the Great Recession. And business advocacy groups on the left (PDF) and the right have been pushing Washington to help. How urgent are pleas for reduced regulation (PDF), better access to capital (PDF), tax cuts (PDF), and the like? Are sales really that bad?
At first glance, the data suggest that small business owners should stop griping. The new monthly Intuit (INTU) Small Business Revenue index, which is based on data from 200,000 small companies that use QuickBooks Online software for financial record keeping, reveals that average revenues are up 9.5 percent since the recovery began. (For purposes of the index, Intuit defines any QuickBooks user as a small business.)
Moreover, the pace of sales growth from the recovery’s inception until February 2011 was actually higher than the pace of revenue growth in the year and a half preceding the recession. (The annual rate of growth was 4.6 percent, vs. 4.2 percent.)
Whether small business sales are weak or not is more than an academic question. The Republican leadership has made helping struggling entrepreneurs a central part of this year’s presidential campaign. Claiming that the Obama administration isn’t doing enough, they recently pushed a $ 46 billion small business tax cut through the House.
The bill, which offers income tax deductions of up to 20 percent to companies with fewer than 500 workers, is not expected to make it through the Democratic-controlled Senate. Failure in the Senate will allow the Republicans to claim that the Democrats aren’t doing enough to help small business owners in their time of need.
Last week, I pointed out that many people perceive small business job growth as weak because small employers aren’t adding jobs fast enough to quickly reverse the negative effects of a deep downturn, even if they are adding jobs faster than big businesses. The sales data show a similar pattern. While the numbers are positive, they’re not strong enough to reverse the hit that small companies took during the Great Recession, and are now weakening.
A closer look at the Intuit data reveals the depth of small business owners’ sales problem and supports demands for help. Despite significant growth during the recovery, the data reveal that small business sales still haven’t completely recovered from their 9.7 percent drop during the downturn. Four and a half years after the Great Recession began, they’re currently 1.1 percent below where they were before the economy went south.
That figure might understate the slow revival. Just to have kept up with inflation, small business sales would need to be 11.1 percent higher now than in December 2007. And they’re no longer growing as rapidly as they were at the beginning of the recovery. Intuit’s index shows that since February 2011, sales growth has slowed to a rate of only 1.6 percent per year, compared to 11.2 percent in the year and a half before the housing bubble burst.
The recent Republican tax bill might be the wrong answer to the problem of poor small business sales. As Howard Gleckman, who blogs for the Tax Policy Center, a joint venture of the Urban Institute and the Brookings Institution, explains in a recent post, the temporary tax cut won’t do much to change fundamentals. It will provide little more than a windfall for eligible companies.
However, the Republican Party’s desire to respond to complaints about poor sales makes sense. Small business sales remain well below pre-recession levels in inflation-adjusted terms, and are currently growing at an anemic pace. Policy makers might not be able to get them back to housing bubble-juiced levels, nor should we necessarily want them to. But they have to pay attention to the numbers. Helping small business is a more effective strategy than tempering expectations.
- ^ No. 1 problem (www.nfib.com)
- ^ the left (www.smallbusinessmajority.org)
- ^ the right (www.nfib.com)
- ^ reduced regulation (www.nfib.com)
- ^ better access to capital (www.smallbusinessmajority.org)
- ^ tax cuts (www.sagenorthamerica.com)
- ^ INTU (investing.businessweek.com)
- ^ index (index.intuit.com)
- ^ not expected (articles.cnn.com)
- ^ many people perceive small business job growth as weak (www.businessweek.com)
- ^ post (www.csmonitor.com)
Insurance markets can be unraveled by adverse selection: If people who need insurance less don’t pay into the risk pool, that raises the costs for everyone left. That’s why the health-reform law has mandates for both individuals and employers with 50 or more employees: Everybody pays in to make insurance affordable.
Federal regulators are now scrutinizing whether small companies with relatively healthy employees will pull out of the group health insurance market by self-insuring—meaning the companies take on the risk of paying for employees’ medical care. That could make premiums for traditional health insurance plans, where an insurance company bears the risk, unaffordable for the businesses that remain.
Stop-loss policies are insurance agreements that employers can buy to limit the amount of risk they take on when self-insuring. In a Federal Register notice posted on May 1, three agencies are requesting information about stop-loss insurance. A company might agree, for example, to pay for up to $ 50,000 of medical claims for any individual employee, and beyond that level, the stop-loss carrier pays.
Regulators from the departments of Labor, Treasury, and Health and Human Services want to know where stop-loss policies are setting that level, known as an “attachment point” and analogous to an individual’s deductible. If it’s low enough, the employer isn’t taking on much risk but does enjoy exemptions from state insurance requirements and taxes that don’t apply to self-insured plans.
What’s prompting the request? Regulators may be examining whether employers with healthier-than-average workforces will use a combination of self-insurance and stop-loss policies to drop out of group health insurance markets. The request notes:
“This practice, if widespread, could worsen the risk pool and increase premiums in the fully insured small group market, including in the Small Business Health Options Program (SHOP) Exchanges that begin in 2014.”
The notice may signal regulation ahead, though it doesn’t necessarily mean the federal government will act. At the state level, the California Senate is considering a bill that would bar the sale of stop-loss policies that pay out below $ 95,000 of individual medical claims. The legislation, backed by the insurance commissioner, essentially forces self-insured employers to cover at least that amount of risk.
Advocates for self-insuring oppose such limits. “We argue strongly that it’s an incorrect perspective that only healthy groups will leave the exchanges and self-insure,” says Jay Fahrer, government relations director at the Self-Insurance Institute of America, whose members include self-insured companies and stop-loss insurers.
Fahrer says employers don’t know how healthy their workers are because they often don’t have access to claims data from their insurance companies. He also cited a Rand Corp. study that suggested adverse selection through self-insurance is not likely to be a problem.
That report says “it is unlikely that a large number of small businesses will opt to self-insure after [health-care reform] takes full effect, unless comprehensive stop-loss coverage becomes widely available at prices that compete with fully insured products.” The new request for information signals that regulators are at least watching that question.
80 New Members in 80 Days
And that isn’t even half of what we do to assist entrepreneurs in our network. The benefits of joining CED include gaining individual access to key dealmakers in the entrepreneurial community in the Research Triangle, personalized support, and invitations to dynamic networking and knowledge events in the area. CED members are also invited to contribute guest posts to this blog, and to work with CED’s marketing director to ensure that their company news is reaching local and national contacts in their industry.
We’re celebrating our successes and launching the High Flyin’ Membership Drive, which rewards our current members for extending the CED network. There’s a $ 350 United Airlines credit on the line, and we already have members vying for the honor of being one of the first passengers on United’s new nonstop flight from RDU to San Francisco.
Will you be that passenger? You can help secure your boarding pass by joining in the membership drive. Here’s a few additional details on the competition:
- A “potential new member” is any individual or company that does not currently hold an active CED membership.
- Potential new members must pay in full and start new membership by June 30, 2012.
- Potential new members must register for their new membership online by visiting www.cednc.org/membership and list your name in the “referral” section in order for you to receive contest credit.
- If you need help, you may facilitate an introduction of the prospective new member to CED’s Jane Royall via email and she can process the new membership directly.
- No lists–prospective new members must sign up online or by working directly with CED’s Jane Royall.
- The contest winner will be announced on July 15, 2012.
We’re currently 28% to our goal, with 23 new CED members in the past 19 days. With 61 days left, we’re on track to make our goal. Yet we cannot reach it on our own–we need your help. Please send an email to a friend recommending CED membership, or encourage your company to join if they haven’t yet done so. For more details on how to help, review our High Flyin’ Membership Drive announcement.
Welcome our new CED Members:
- Align Global Consulting
- Andrew Carson Stuart
- Evideo Verify
- Flow Circus
- G. Timothy Pate
- inMotion Now
- Investors Mosaic
- Lu Silverstein
- North Bridge Reporting
- Paul Immanuel
- RTI International
- Vincent Barnett
Question by Thick iz what you want: Are there any entrepreneurs out there now that impact on the economy by creating jobs for numerous people?
Can you name some entrepreneurs out there today that are helping the economy by creating jobs for numerous people and also improving the quality of life for people? Is so could you name them, note some of there slogans,character traits. Please and Thank-you.
Answer by Martian King
H. Ross Perot
No known slogans. Character traits: hard-working, visionary, curious, socially connected, eccentric (some of them).
What do you think? Answer below!
Question by majms77: Need Advice: Start Marketing, Consulting & Coaching Business?
Please answer ONLY if you have experience (Offline – is preferred)
I have passion to learn and start a marketing, consulting and coaching business from scratch.
1.) I have no previous experience. Is it possible?
2.) What skills should I have to succeed?
3.) What product, experts, and courses you recommend?
4.) What about learning curve?
Answer by Love Canada.
1.) An obvious no
2.) you cannot teach until you learn something to teach
3.) build on what you know now
4.) Based on your ability
your looking for a shortcut in life, not just luck…
Add your own answer in the comments!
There is a myriad of reasons why people get into business. Some see it as a way to get rich quick, while others use enterprises to exercise their creative skills. On our ‘entrepreneur’ segment tonight, we meet Pauline Ochieng’ who took a leap of faith to start a footwear and jewellery business so she could spend more time with her family.
Video Rating: 5 / 5
Question by breeze: What is the difference between coach and business seats on a plane? Do you have more room in business?
Answer by anon
Coach is the basic seat. It means you are seated in a three-seat space, side by side. Services are bare-bones. If you want to listen to the on-board movie you have to buy the earphones. If you want lunch you have to buy it. If you want a drink you can only get one at mealtimes, and you might have to pay for it. Alcohol is not included either.
Business class is often confused with First Class. You get everything that the Coach class gets, but it’s folded into the price. So you pay a lot more for your ticket, but you can drink like a fish, and you get an adequate meal to go along with it. Your seats will be two across instead of three, meaning you have a lot of room. Oh, also, the rows are spaced further apart so that you have actual leg room. The cabin space is smaller, and the flight attendant has fewer passengers to tend to so you get better service.
Again, if you want to fly business class, be prepared to pay for it. You get all the perks, but you pay big-perk money for them.
My advice, stick with coach. First class passengers arrive there the same time that you do. It does not make the plane fly faster if you are in Business class.
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