Certainty is one of the most important factors in growing business; especially for small businesses and start ups.
Like most things in life and politics, guaranteeing certainty is a simple concept:
don’t change the rules in mid course
remove all arbitrary rules and those open for interpretation
Remember when you were a kid playing with your big brother and his friends and you got so frustrated because every time you were about to beat them, they changed the rules on you? And then to rub it in, they laughed at you. You played hard to win but all along, you had a knot in your stomach knowing that somehow they would do something at the end to screw you and you’d end up losing.
I think all us Americans have that feeling again right now from big brother.
If business owners know the rules and are assured that those rules will not arbitrarily change, they can adjust and overcome. Take for example Rick Hahn retired FBI agent, now a small business owner in Southern California (http://www.rhahninc.com/) challenged by the ever changing regulation and (increasing) tax burden, puts it this way:
Which is better: decrease loan rates through the Fed or decrease tax burdens on business?
If you decrease interest rates, well, folks can borrow for less. Good, right? But who’s borrowing? Individuals aren’t – they can’t afford to borrow more. So that leaves business – the vast majority of which are small (family run) businesses.
So I can borrow to start or expand my business for less – good news, right? Not so fast! If I grow my business, I must grow my taxes – but that’s okay because they’re at the same rate. But are they? Gee, when I get 30 employees, I gotta get them health care, as that’s the law! Well, so, I’ll keep it small and when it gets to be more than 20, I’ll make a separate business (and hope they don’t investigate this and charge me with some crime.) So I’ll have 2, 3, maybe 4 or 5 businesses, each with less than 30 employees. But then, I’m still paying those higher taxes – increasing as the company makes more money. And then, because I have no guarantee from the Fed or the bank beyond maybe 36 months, Interest rates rise, I can’t borrow more, they call my loans, and I have to shut down because I can’t make a profit.
If, on the other hand, they had done it the old fashioned way, they would have promised me a tax break for fifteen years, and even then it would be a review, with an option to extend another ten or fifteen. Sure, I’d borrow at 6.5% – but I’d figure that into my operating costs in my business plan. What I’d also figure into my business plan is that by the end of the tax break I would have to have figured out how to deal with the increased tax load and still stay in business. It would give me breathing room for ten years to figure this out, plan for it, grow my business with full knowledge that the balloon was going to rise on X date. Not left to the capriciousness of the FED, I would venture forth.
These guys in OBAMA-Nation don’t get it. Cutting interest rates, which can arbitrarily rise at any time is no, NO encouragement to business. Can you imagine a football coach starting a game not knowing how many points a touchdown or field goal will be worth in the 4th quarter? That’s what today’s small business owners are up against.
These capricious policies and regulation also force otherwise honest business owners to find “creative” (and expensive) ways to get around the laws and regulations; like opening multiple businesses to avoid health care expense their business cannot afford. All the while those owners feel the same sickening knot in their stomachs they felt as kids, knowing that their new Big Brother will try to ruin them at any minute.
On top of that, business owners, instead of being lauded for providing goods, services and jobs are somehow made to feel guilty not providing health care; as if they have done something wrong or immoral. The Left preaches that they don’t want the Right pushing their morality, but that’s exactly what the Left does under the veil of government!
As Mr. Hahn points out, “New businesses are not starting up and existing businesses not expanding. Who would invest their lives, literally, in an enterprise that may be a loser in 5 – 10 years simply because the rules change? You’d have to be crazy to buy into that. But these guys don’t get it.”