What small business wants from the US
In 1938, President Franklin D. Roosevelt asked owners of small businesses to bring their complaints and suggestions to Washington. More than voices were raised, however. The conference erupted into fistfights among the 1,000 delegates. This week, 1,823 small-business people will again be in Washington to give the White House a piece of their mind. Entrepreneurs from around the country meet at the Washington Hilton for a White House-sponsored conference. Although no fisticuffs are expected, the Reagan administration is likely to get an earful.
Among the key issues the businessmen intend to raise:
The need for liability insurance reform. With insurance premiums rising sharply, small-business owners would like to see Congress set a cap on damage awards. ``I recently turned down the opportunity to sit on the board of a company in Houston,'' says William Anderson, president of Matrix Inc. of East Providence, R.I., ``because they could not get directors' liability insurance.'' Such complaints are not unusual.
A strong Small Business Administration. In the past, President Reagan has suggested merging the SBA into the Commerce Department. The idea is unpopular. So is administrator Charles Heatherly, who supports the plan. Mr. Heatherly would get an unfriendly reception if he came to the conference, says Louis Shattuck, president of the Smaller Business Association of New England.
Competition from the nonprofit and government sector. Federally funded research-and-development centers often get contracts that small businesses would like to compete for.
These entrepreneurs are also likely to broach other ideas, including special tax incentives, the federal deficit, and ways to stimulate exports. One Colorado delegate is touting ``brain grants,'' research funding similar to the land grants that helped to settle the West.
The last time the conference met was in 1980, under the sponsorship of President Jimmy Carter, who was then running for reelection. It turned out to be more successful than expected, and 38 of 60 recommendations ultimately resulted in government action. Virginia Littlejohn, president of Littlejohn Johnson Inc., a Washington, D.C., consultant and software developer, notes that ``small businesses cut their political teeth'' at the last conference.
Getting a second conference, however, was difficult. The Reagan administration was reluctant to hold one, even after 50 senators signed a petition asking for it. Sen. Lowell Weicker (R) of Connecticut ultimately shepherded legislation through Congress.
The conference will be held against a dreary economic backdrop for many of the business owners. A recent survey by the National Federation of Independent Business found its members expecting a relatively stagnant economy. Looking at the data, John Sloan, the association's spokesman, notes, ``We sense a bit of uncertainty over what to do until this tax bill is behind us.''
One sign of problems in the small business sector is a recent slowdown in new employment. Over the past four years, new hiring among small businesses has been growing at an 8 to 10 percent rate. In the last few months, notes Joseph Duncan, chief economist at the Dun & Bradstreet Corporation, the rate of growth has been flat. Mr. Duncan likewise blames the uncertainty over tax reform.
And the same conditions that are buffeting big business are causing turbulence for small ones. Matrix, which manufactures electronic parts for the auto and telecommunications industry, lost 30 percent of its business this year to foreign competition. ``We got kicked in the teeth,'' says Mr. Anderson.
Small business does have an advantage: size. It can respond quickly to changes in the marketplace. ``We're in a niche economy,'' says Mr. Stanley, ``and small business can respond much faster than the lumbering giants.''
For example, one of the fastest areas of growth is temporary help. Big business has had to cut back on overhead. Thus, when in need of extra manpower, large companies are increasingly turning to outside services to provide it. Even janitorial services are being farmed out.
Retailing is another strong arena for small businesses, which can react to fads much faster than the giant retailers. For example, small retailers were the first to develop special stores for video products. Now, some small businesses are specializing even further, setting up video stores that have products only for lovers of old movies. Last year, according to Dun & Bradstreet, there were 72,463 new business starts in retailing.
All of this is not lost on the White House. ``We're cognizant of the role of small businesses in the recovery,'' says Stanley. It has rolled out some of its power players for the conference, including Donald Regan, the president's chief of staff.