George Wilder: Figure out what makes sense
By George R. WilderOwner and CEO, The Locker Room, Montgomery and Auburn Many years ago, I was fortunate to be in a board meeting with Jimmy Blanchard, then chairman and CEO of Synovus Bank. Jimmy is the definition of a humble, servant leader. Answering a question during that meeting, Jimmy said: “We just want to figure out what makes sense and do that.” With this COVID-19 pandemic, figuring out what makes sense is challenging to say the least. As a service driven specialty retailer, selling better men’s clothing, sportswear and shoes for the past 42 years, we suddenly find ourselves shut down. But we are not giving up. We are creating online business; we are contacting our clients weekly to take care of any needs they may have. With the slow down in business, our tailors are making masks for an adopted COVID-19 unit at Baptist Hospital. We have requests from Jackson Hospital as well and from individual nurses and emergency room doctor clients. All that to say, small business is important to our community. The safety of our folks and our clients is foremost. We are not a high-traffic business. We are in the relationship business. We know our customers and their families. So, that Walmart, for example, which is a high-traffic, high-volume store can be open and sell clothes, and we can’t, does not exactly make sense. Would you rather be in a small specialty store, with folks you know, and two or three customers at a time or a big chain store with folks you don’t know all around you? With most businesses closed, we now have the same number of consumers shopping in fewer stores, which does not lead to social distancing. What our leaders are thinking but not saying out loud, is that the fallout from the economic shutdown could turn out to be worse than the virus. Our business was down 50% in March. In April and May, we are conservatively projecting 80% decreases. Yes 80%, and just six weeks ago, we were on track for our best spring season ever. The only way specialty retail will survive is with the help we hope to get from our government and returning to business in a way that is safe yet allows us to create sales. I am not faulting the big box stores. Without the business they are doing, there would be virtually no sales tax created in our communities, which we must have. This letter is about “figuring out what makes sense and doing that.” Shop local and support small business. They are the backbone of our community, our county, our state and our country.
Doug Jones proposes ‘Small Business Lifeline Fund’
Small businesses everywhere have been hit particularly hard by mandatory closures and safety measures required to help slow the spread of the coronavirus (COVID-19). On Friday, Alabama U.S. Sen. Doug Jones, a member of the Senate Banking Committee, proposed a new model to direct money to small businesses by funding payroll service companies. The “Small Business Lifeline Fund” would establish a new fund that would offer short-term, no-interest “bridge” loans to employers that would be directed through their payroll processing company. “While we’re all taking drastic steps to help stop the spread of the virus, we have to do the things necessary to help keep our small businesses afloat and keep our workers paid during this time,” said Jones. “By providing a new fund for loans that small businesses can process directly through their payroll companies, we can cut the red tape that would otherwise slow down money getting into the hands of the workers who need it most. The Small Business Lifeline Fund is a creative solution that we could implement quickly and on a short-term basis to help fill this gap.” The Small Business Lifeline Fund would: Offer loans to fund up to 75-percent of a business’ last three months of payroll; Provide money directly to businesses and workers without the bureaucratic obstacles they would otherwise face in getting loans from a bank at this time; Help alleviate pressure on the unemployment insurance program by keeping workers paid; Ensure payroll taxes continue to be paid in order to protect important programs like Medicare and Social Security.
Chris Elliott: “We need a level playing field for franchise owners in Alabama.”
I knew it had happened to me, so I concluded it was happening to others. I’m a small business owner, and for years I owned and operated small catastrophe-restoration franchises in Mobile and Baldwin Counties. If your home or store had fire or water damage, my team and I would come in and restore your shop or house. It was hard work: there’s nothing clean or easy about ripping out walls that are rotting from mold, or painstakingly assessing the best way to remove fire-damaged cabinets while preserving the integrity of a kitchen’s interior. But it was rewarding, too: I was providing for my family, my team was giving great service to our customers, and we were creating jobs. Unfortunately, it turned out that my franchisor was not interested in the long-term success of my business. They were interested in corporate profits, regardless of how it impacted the small business owners who operated their franchises. I wanted to believe that this inequity was limited to my particular franchisor, but, sadly, it is not. I learned that Alabama is a state without a franchisee-protection law. Through contact with the Alabama Franchisee Association, I learned that scores of Alabama businesses — both small and large — have essentially no rights and no protections. It has been a “take it or leave it” proposition, with franchisees having to take on more and more at each contract renewal. I recently met Darrel Bush, whose family had operated the Huddle House in Wetumpka for more than 25 years. As the years went by, unreasonably-priced building and equipment upgrades were added to the extensions of the original contract, and the Bush family had no choice but to agree to the franchisor’s demands in order to stay afloat. Ultimately, the Bush family had to shut down its franchise. Huddle House is now looking to construct a new location, just down the road from the one the Bush family operated for a quarter-century. None of this is right. Thankfully, I’m out of the franchisee business now, but I’m taking a stand for Alabama business owners with the introduction of the Protect Alabama Small Businesses Act, co-sponsored by Rep. Connie Rowe of Jasper, in the Alabama Legislature. The Protect Small Businesses Act (Senate Bill 129) will create the level playing field that small business owners – particularly, our small franchisee owners – desperately need. The bill provides three things: Protection from unjust terminations and non-renewals without good cause. Franchisees should be compensated for fair market value for their investments. Protection from unjust restrictions on sales and transfers. Most importantly, the bill protects the right to sue in Alabama courts. Often, franchisors construct contracts that only allow for disputes to be settled in courts in New York City or Los Angles, where court costs and attorney’s fees are prohibitively expensive for small business owners in Alabama. If you’re 25 years old and working 80 hours a week to make your first Taco Bell franchisee profitable, you don’t have the time or money to battle Big Law hired-guns in a lower Manhattan courtroom, if a contract dispute arises. I hope you will join me in protecting these Alabama family businesses, their employees, and our communities. Too many people have been harmed by one-sided agreements where the goal posts move quickly, and the deck is always stacked in favor of the large, out-of-state franchisors. Chris Elliott represents Baldwin County in the Alabama State Senate, where he serves as Vice-Chairman of the Senate Committee on Governmental Affairs. Follow him on Twitter for legislative updates: @SenatorElliott
GrowSmart helps small businesses in Alabama help each other
The Alabama Small Business Development Center Network has some business-savvy instructors leading GrowSmart but the true genius in the program is the collaboration of participants. GrowSmart is the signature program within Alabama SBDC aimed at entrepreneurs and high-growth businesses. Through five modules held one day per week for five weeks, companies learn the secrets behind self-analysis and management in the modern business climate. “GrowSmart is not death by PowerPoint. It is not a lecture,” said Michael Brooks, associate director of the Alabama SBDC at the University of Alabama. “It is working on your business – using the tools and talking about the tools business owners need to grow their business. (It’s) interactive and also helps to build community because you’ve got small businesses – not competitors, nobody competing directly with each other – working with each other, sharing notes, commiserating and then sharing successes of how they’ve overcome and how they’ve succeeded.” Suzanne Howell, supplier diversity analyst with Alabama Power, said the company has sponsored the program for two years and sponsors small businesses to participate in the program. “People are able to bounce ideas off each other,” she said. “Each of the business owners have shared things that they’ve experienced over the years. We’ve had people who have been in business for 30, 35 years and then there have been some businesses that are just early stages – three or four years – so it’s been interesting to see some of the businesses that have been in business for years share things and then you see those young business owners have an ‘Aha!’ moment.” One of those moments came from Joe Daniel, president and owner of Streamline CXO. “I was cautiously optimistic about what to expect. I wasn’t real sure but I figured I would come explore because you can always learn something,” he said. “What I got out of it was much more. It’s been very beneficial. The information that was shared was not just relevant, but it was timely. It wasn’t just the same old business class information. It was actually things that are going to help us in our efforts.” Brooks said the program started in Georgia, where Georgia Power, Alabama Power’s sister company, supported it and saw how it helped small businesses grow. “The SBDC provides training and technical assistance to small- and medium-sized companies that are in growth mode, and GrowSmart we identified as an established, proven training program with a very long track record,” Brooks said. “We work collaboratively with our friends at the Georgia SBDC. Just like Alabama Power and Georgia Power collaborate on projects, this was a great transfer of a program that worked really well in our neighboring Georgia and we wanted to bring that into Alabama to help our small businesses start and grow.” Coincidentally, Cheryl Estes Hollis, founder and CEO of Sweet Seats, commuted from Georgia each week to participate in Alabama’s most recent GrowSmart program at Innovation Depot in Birmingham. “Our company is headquartered in the Atlanta area and we are opening a second location here in the Birmingham area,” she said. The specialty chair rental company offers stylish seating for events and special occasions. It will soon open its first Alabama location in Homewood. Hollis said she will use what she learned in GrowSmart as she expands her business. “I had no idea, really, what to expect but the information has been priceless, the networking has been invaluable and there are just so many great nuggets that I was able to obtain and I’m looking forward to applying to my business,” she said. Brooks said the hope is that companies don’t just end up with useful notes but are actually able to put what is learned into practice. “We want people to walk away with the tools that they need to grow their business,” he said. “Each business had a different weak spot and they identified those. Some folks are changing the way they provide leadership within the company. Some are changing their HR issues. Others have experienced a whole new world of financial management that they were hesitant to explore before or they were very quick to turn over to a bookkeeper or CPA and they’re bringing that knowledge and expertise in-house.” SBDC is an outreach program of the University of Alabama’s Culverhouse College of Commerce. For more information on the GrowSmart program or to sign up for future classes, visit the Alabama SBDC Network’s GrowSmart page. Republished with permission from the Alabama NewsCenter.
Survey: Small business owners lose some post-election cheer
Small business owners have lost some of their post-election optimism, according to a survey released Thursday by Wells Fargo & Co. The bank’s quarterly small business index, based on a survey taken in early April, dropped to a reading of 95 from 100 at the start of 2017 and 80 in the fourth quarter. Other small business surveys had also shown a surge in optimism after the election and the inauguration of Donald Trump. The Wells Fargo survey may reflect more pessimism in response to the economic slowdown they felt in the first quarter. Government figures showed the U.S. gross domestic product grew at an anemic 0.7 percent annual rate in that period. Much of the decline in the bank’s index came from owners’ assessments of current financial conditions. The 603 owners surveyed also had lowered expectations for their revenue in the next 12 months. Fifty-seven percent expected to have revenue gains, down from 61 percent in the first quarter. Hiring expectations did tick up, with 31 percent planning to increase their payrolls versus 29 percent in the fourth quarter. Small business job creation has been erratic over the past year; on Wednesday, payroll provider ADP said its small business customers added 61,000 jobs in April, down from March’s 117,000. Hiring forecasts have also varied widely in recent months — the Wells survey is more optimistic than one from Bank of America last week that saw 18 percent of owners expecting to hire, down from 25 percent six months ago. Republished with permission of The Associated Press.
Robert Bentley encourages support of Alabama small businesses on Saturday
Tis the season for holiday shopping. From Black Friday to Cyber Monday, retailers across the country are geared up for the busiest shopping weekend of the year. And this year, Governor Robert Bentley is encouraging Alabamians to shop local to support Small Business Saturday. On Monday, Bentley signed a proclamation formally declaring November 26th as Small Business Saturday in Alabama. Already a national initiative, Small Business Saturday is designed to celebrate and support the often-overlooked sector of the economy, encouraging consumers to patronize small, local, brick-and-mortar stores. “Small Business Saturday is a great opportunity for Alabamians to support local businesses on the first Saturday after Thanksgiving,” Bentley said. “Small businesses are the engines of job growth and a vital part of a stimulated economy. By recognizing Small Business Saturday, we can choose to support the small businesses that contribute to our economy and our communities. As we begin the holiday shopping season, I encourage Alabamians to shop at local small businesses throughout Alabama.” According to the latest state profile from the U.S. Small Business Administration, there are 382,524 small businesses in Alabama, accounting for 96.7% of Alabama businesses. Small businesses employ 47.7% of the state’s private sector workforce. “Small business represents 99.7 percent of all U.S. employers, and they provide jobs for 58 million Americans,” Rosemary Elebash, State Director for the National Federation of Independent Business chairs theAlabama Small Business Commission and Advisory Committee said. “For many local retail businesses, the holiday shopping season is a make-or-break time, and Americans who want to support their communities and the economy should remember to shop small.”
Alabama city named 8th best in America to start a small business
Launching a business can be an exciting yet daunting proposition. City size matters when choosing a launching pad for a startup. And as many veteran entrepreneurs — and failed startups — understand well, bigger is not always better. Depending on an entrepreneur’s type of business and personal preferences, a city with a smaller population can be a better option, and one in which their new business can thrive. Such is certainly the case with Dothan, Ala., which ranks as the 8th best city in American to launch a small business, according to a new analysis of 2016’s Best & Worst Small Cities to Start a Business by the personal finance website WalletHub. To identify the most business-friendly small markets in which to launch a new venture, WalletHub compared 1,268 small-sized cities across 15 key metrics, including “average growth in number of small businesses” and “prevalence of investors” to “office-space affordability” and “corporate taxes.” Here’s how Dothan ranks across all areas analyzed: Length of Average Work Week: 461 Average Revenue per Business: 171 Average Growth of Business Revenues: 635 Industry Variety: 438 Financing Accessibility: N/A Prevalence of Investors: 265 Employee Availability: 308 Higher-Education Assets: 51 Workforce Educational Attainment: 777 Office-Space Affordability: 1 Median Annual Income: 326 Corporate Taxes: 500 Cost of Living: 107 Overall Score: 44.63 Of course, Dothan doesn’t come up number one in every category — but being the nation’s best city for office space affordability helped secure Dothan’s 8th place ranking. A big advantage of starting a business in a small city is that you can more easily learn about and access the resources that are available to you from private and public sources,” said Chuck Sacco, Assistant Dean of Strategic Initiatives in the Charles D. Close School of Entrepreneurship and expert who weighed-in on the study. “In a small city, it will be easier to et to know the best service providers such as lawyers, your banker may likely be someone you know, and you can more easily create a name for yourself (and hopefully get some good local press).” Additional Alabama cities that were ranked in the top 500 are: 133. Tuscaloosa 247. Florence 263. Auburn 280. Bessemer 367. Homewood 427. Decatur 436. Hoover 500. Opelika Here’s a look at how cities across America ranked: Source: WalletHub
Martha Roby: Web of regulations can ensnare business, cost jobs
This past week I met with the National Federation of Independent Business’s (NFIB) Alabama Leadership Council in Montgomery. As you probably know, the NFIB is a member organization made up of small and independent businesses, and this particular group represents small business operators from all across Alabama. I’m proud to support homegrown Alabama businesses and the jobs they sustain. Small businesses employ as many as 50 percent of all private sector employees. Yet, talk to just about any business owner and they’ll tell you how difficult it can be to operate in today’s regulatory environment. That’s especially true for small and medium-sized businesses that lack the resources it takes to put toward compliance. You may remember President Obama announcing how he would use his “pen” to sign executive orders mandating policies he could not successfully pass through Congress. The most high profile of these was his order seeking to offer de facto amnesty to certain classes of illegal immigrants, which is currently being challenged as unconstitutional in federal court. However, many lesser known rules and regulations put forward by agencies like the Environmental Protection Agency and the Department of Labor could have a much more significant effect on the private sector. A recent study by the Regulatory Studies Center at George Washington University found 392 “major” regulations have been issued during the Obama presidency so far. And, according to the Wall Street Journal, the Administration is now “racing to make final a flurry of regulations affecting broad swaths of the economy” before the term is finished. I strongly oppose this kind of “backdoor legislating,” in which government agencies decide single-handedly to impose new, aggressive regulations. The U.S. Constitution separated the powers of government among the three branches and set up a system of checks and balances. Our laws have legitimacy because they are passed by representatives elected by and accountable to the people. That system is undermined when this “fourth branch” of unelected bureaucrats in federal agencies is allowed to unilaterally impose major, binding regulations with impunity. President Obama is certainly not the first president to expand the reach of the Executive Branch by imposing rules and regulations. However, he has been notably more aggressive than most, and that should continue down the final stretch of his presidency. Congress has a responsibility to fight back against Executive Branch overreach, whether through exposing potentially harmful regulations, passing legislation to set strict limits or using the “power of the purse” to rein in agencies. I also believe the Judicial Branch must step in and reaffirm the separation of powers. Listening directly to the concerns of those who operate businesses affords me a better understanding of just what they deal with on a daily basis from federal regulators. I will continue to work on their behalf in Congress to expose and fight against unnecessary regulations that hinder their ability to create and sustain jobs. • • • Martha Roby represents Alabama’s 2nd Congressional District. She lives in Montgomery, Alabama with her husband, Riley, and their two children.
Bradley Byrne: Standing up for Small Business
With the Thanksgiving holiday behind us, the hustle and bustle of the Christmas season has officially started. From shopping for presents to finalizing your travel plans, the next few weeks are sure to be busy. Many of you likely tried to get a head start on shopping last Friday, but did you know that Saturday was also a special day for shopping? Last Saturday marked Small Business Saturday. This is a day set aside to support our nation’s small businesses and to highlight the vital impact they have on our economy. Small Business Saturday is a relatively new tradition, but it has really taken off over the last few years. Since our nation’s founding, entrepreneurs and innovators have built our economy up through small businesses. These small businesses are very important to our economy. In fact, half of all working Americans who have a job in the private sector are working at a small business. From boutique clothing stores to ship repair companies to candle shops, Southwest Alabama is home to a wide range of small businesses. During my time in Congress, I have made it a top priority to visit these businesses in Southwest Alabama to learn more about the challenges they face. Sadly, I quickly realized that small businesses are drowning in costly regulations and a confusing maze of red tape. Since 2008, more small businesses have closed than have opened. That’s why I have made it a priority over the last two years to push for legislation that cuts back regulations, gets Washington out of the way, and allows small businesses to flourish. For example, the tax code is far too confusing and complicated for our small businesses. I believe we should simplify the tax code and make it easier for all Americans. It shouldn’t require countless hours and hundreds of dollars to do your taxes each year. A fairer, simpler tax code would go a long way toward getting the federal government off the back of our small businesses. The Internal Revenue Service (IRS) isn’t the only federal agency making life harder for small businesses. There is also the Occupational Safety and Health Administration (OHSA), which puts excessive compliance requirements on small businesses that simply don’t make sense. Regulations from the Environmental Protection Agency (EPA) are also driving up energy costs and making it harder for small businesses to get ahead. It seems like every day the Obama Administration is putting out a new, costly regulation. In the House, we have an entire committee devoted to fighting back against these regulations and supporting our nation’s small businesses. Chairman Steve Chabot (R-OH) and the House Small Business Committee work diligently to advance legislation designed to make life easier for our small businesses. This year alone, the House has passed a number of bills designed to support small business. In February, the House passed H.R. 527, the Small Business Regulatory Flexibility Improvements Act. This bill would require the federal government to conduct detailed cost analysis of proposed regulations and ensure small businesses have input before regulations are released. Another example of a House-passed small business bill is the Small Business Investment Company Capital Act of 2015, which would boost the Small Business Investment Company (SBIC). The SBIC is a public-private partnership that helps new small businesses gain access to equity and financing. In Congress, I am committed to being an outspoken advocate for small businesses as we work to get Washington bureaucrats out of the way. You can also do your part. As you check items off your Christmas list, don’t forget to spend time shopping at small businesses in your local community. They are the real backbone of our economy. Bradley Byrne is a member of the U.S. Congress representing Alabama’s 1st Congressional District.
Daniel Sutter: what do we learn from “Bar Rescue”?
Reality television has spawned numerous shows about restaurants and bars, including “Bar Rescue” and “Restaurant: Impossible,” which focus on failing restaurants. The shows provide a look into the challenges, work, and risk of running a restaurant. For instance, just over a quarter of restaurants fail in their first year, and a little over half close within five years; these percentages are slightly higher than for all new businesses. By featuring restaurants suffering from self-inflicted wounds, they also raise important questions about our market economy. The restaurants on the shows are often failing for fairly obvious reasons. Robert Irvine, host of “Restaurant: Impossible,” has a top five list of reasons why restaurants fail which includes poor customer service, poor quality food, and lack of basic accounting skills. Another industry expert’s list included not paying taxes. Who could imagine that restaurants could fail for these reasons! I have never run a business, and would likely need a rescue if I tried to run a restaurant. But the owners of these failing restaurants appear to make predictable, avoidable mistakes. I suspect that other viewers probably share my frequent reaction of, “Who thought it was a good idea to let that person run a restaurant?” Poor ownership has consequences. A hard working employee with bills to pay could lose her job because her boss didn’t know how to calculate food cost or pay the taxes. The buildings, kitchen equipment, employees and food are all scarce resources, and our economy realizes little value when they are used by owners who do not know how to run a restaurant. The mistakes of some restaurant owners should perhaps come as no surprise, since owners do not have to prove their expertise to the government before starting. People must get a license from the state and consequently demonstrate relevant training to tend bar, but not to run the restaurant. Business licenses do not test the owner’s knowledge of business or other relevant aptitudes, like people skills. Would government licensing of prospective entrepreneurs improve our economy? I don’t think so, for several reasons. For starters, would-be restauranteurs need financing, so a business partner or bank backs new restaurants and should be alert for problems. The restaurants are in imminent danger of closing, so their problems have not escaped notice. The market economy lets some marginally qualified persons run restaurants (I’m trying to be polite!), but the worst-run restaurants get closed relatively quickly. Licensing might prevent some poorly run restaurants, but could easily be misused. The best way to scrutinize restaurant proposals would be to have successful restauranteurs conduct reviews. But this allows current restaurant owners to prevent new competition from opening, a power too susceptible to abuse. Occupational licensing by states often imposes unnecessary training and education requirements on plumbers, bartenders and other professions. Certificate of Need regulations in healthcare let state governments to determine whether new hospitals or other medical facilities are needed. Research shows that such laws reduce competition and increase prices for consumers, making our economy less prosperous. Many Americans dream of starting a business and value the autonomy of being their own boss. Often business people simply love the challenge of trying to make their business succeed. Restricting the freedom to start a business would deny millions of Americans an important life opportunity, although it may avoid some epic failures. Finally, one never knows where ideas for new products and services will come from in a market economy. Our prosperity results from the division of knowledge, and this division limits the ability of experts to evaluate new ideas. Unexpected successes in the restaurant business demonstrate that experts never know for certain what will work. “Bar Rescue” and “Restaurant: Impossible” illustrate apparent waste in the market economy: the use of resources by businesses with little chance of success. The opportunity to pursue our dreams, itself an important output of our economy, also means the inevitability of failure by some. By helping disseminate the expertise of hosts Jon Taffer and Robert Irvine, these shows will help make our economy more efficient. Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University and host of Econversations on TrojanVision. Respond to him at dsutter@troy.edu and like the Johnson Center on Facebook.al
