How to Talk to Small Business People
AUTHORS NOTE: This story has been edited to alleviate the concern that it was advocating one political party over another. This edit was an honest effort to achieve that end. I apologize in advance if the effort has still fallen short.
Today we are back on track. The last two weeks have been spent on How to Talk to the Main Stream Media. While I personally thought they would be very useful, they did not get overwhelming responses. That's OK though, it was good exercise for me to run through my own personal do's and don'ts when dealing with the media.
How to Talk to Small Business People has a more "traditional" goal. Once again we will be trying to convince people who should be agreeing with us that we have the better ideas, because we share these values. We need to do this in such a way as that our subjects will not be immediately turned off to our arguments before we even get started.
Speaking of getting started....
Cross Posted at Florida Kossacks http:\\fl-kossacks.blogspot.com
Small businesses create more jobs and are the sources of more innovations than any other segment of our society. They have a very strong sense of self reliance and personal accountability. Community is highly valued by Small Business People. The operate their businesses and employ people in our communities. They raise their families and worship together with us in our communities. They give back to their communities by serving in Kiwanis, Optimists, and all other manner of civic organizations, both international and local in scope.
Small Business People are not typically aligned with Progressives. They are mistaken in their understanding of what Progressive ideals stands really mean. Most Small Business People are moderate by nature - they want their products and services to be sought out by the widest range of potential customers possible. Time and again, that has been shown to be in the "broad middle".
Define the Overarching Strategy
What is the best strategy to use when deciding How to Talk to Small Business People? It is not much different than in talking to any other segment of society you wish to persuade. The first thing to do is to identify which among your values is most applicable to this subject. Emphasize those values that are shared by the subjects, in this case Small Business People. Any facilitator of conflict resolution worth his or her own salt will first seek to identify areas of common agreement. We should view this exercise no differently.
Small Business People value personal accountability. They know full well that given an even chance, they and they alone, are responsible for their own success or failure. Small business people value community. They raise their families, worship and run their businesses in their communities. They are the backbone of the Kiwanis, the Optimists and other civic organizations. They run for City Council, belong to the Chamber of Commerce and support their churches and local charities.Small Business People value independence and freedom from over burdensome governmental regulations. Their trade group is the National Federation of Independent Businesses. The issues that are important to them include competition, government and regulatory reform and tax relief. The NFIB website proudly proclaims:
Advocacy is a top priority for NFIB.
Their list of legislative accomplishments includes tax relief and "tort reform" amongst others.
Define the Terminology
Small Business People tend not to self identify as Progressives because they believe Progressive are anti-business. They are not correct. Conservative give a lot of lip service to small business but that's about all they really give them. All the major legislative efforts of the Conservatives have been centered on benefiting big business. Very little is actually done with small business people as the major focus.
Tax rollbacks on the very wealthy are a good example. The so called "conservatives" claimed that rolling back the tax cuts for the very wealthy would negatively impact small business people, and therefore hurt job creation, the economy, motherhood and apple pie. The truth of the matter is that most small business people are able to arrange their financial affairs in such a way as to not show very high taxable incomes. Where they are running into real problems is with the Alternative Minimum Tax (AMT) . This is a tax scheme that was devised to keep the super rich from avoiding paying taxes at all. It has not been modified to keep up with the times, however. So now it is going to ensnare people it was never meant to cover. Progressives can go a long way to getting small business people on our side by making AMT reform a priority.
Fair competition is another area that small business people are getting lied to by the Republicans. I am going to use Wal Mart as an example only here. Small business people don't like the idea of welfare or government subsidies. Because of their sense of community, most of them want to provide and many do, health and other benefits for their employees. What they don't realize is that companies that hire primarily part time employees and pay them no benefits and low wages are getting subsidized by the government. These part time employees get free health care from the government when they get sick. Many of them are on food stamps and Aid to Families with Dependent Children. Even though they are working, many work 2 or more jobs, their incomes are still low enough to qualify for government assistance.
When you explain to a small business person that the big company he is competing with is getting these subsidies from the government, they tend to get very unhappy. Usually when they think about welfare, they only think about the Welfare Queens ripping off the government. They don't stop to think that their competition is benefiting from the welfare system by having the government pick up the spread between a living wage and what they are actually paying their employees. When you explain that to a small business person, the idea of a living wage begins to look a whole lot more reasonable to them.
The other argument that Conservatives use against raising the minimum wage or a living wage is that it will cost jobs and put small business people out of business. Many states have a higher minimum wage than the Federal Minimum Wage. In Florida, we passed a State Constitutional Amendment raising the minimum wage and indexing it for inflation. Florida is still leading the nation in job creation. Scratch that argument.
Small business people understand economics. After they get that the government is subsidizing below living wage paying employers, they are susceptible to another argument. That is that if you can't afford to pay a living wage ( not get the government to subsidize you), economically you should not be in that business. A truly free market would force you out of business without the government subsidies. Small Business People really get that argument.
Mangle the Memes
You are not going to get through to Small business People unless you can get past the memes that they have been indoctrinated in since birth. Use examples to show them that Conservatives do not actually share the values the of rugged individualist, but are actually the perpatrators of corporate welfare.
Small Business People tend to be on the patriotic side. Be ready to show them that Progressives are competent to keep us safe from terrorists and will otherwise protect our national security. After all, most people now get that we were not made safer by invading Iraq.
Don't let them get away with calling us "tax and spend" liberals. Remind them that it was a Moderate / Populist who balanced the budget and left office with a surplus. Also, it is the Progressives in Congress who are bringing back pay - go budgeting. That's something small business people really understand.
We have more in common with the Small business community than most people think. We have a lot more in common with them than the Conservatives really do. The Conservatives have just done a better job of convincing the small business community that they share their values. In fact, we share more values in practice than the Conservatives do.
If you can remember to speak to small business people in terms of our shared values, you have a very good chance to get them away from the Dark Side. You will at least have made them think about it.
And that's a start.
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Posted By gatordem to All Things Moderate at 12/26/2006 11:05:00 AM
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Thanks for the insightful comments
I would like to respond to some of them. Starting with your penultimate paragraph, you are quite correct that Small Business People understand the microeconomics of their businesses very well. It is also true, however, that there can be no "macro" economics without the micro economics. It is how macro policies impact the micro economics of their business that samll business people care about. That is something they can react to and plan for. There is very little they can actually do to influence macro economic trends except in the aggregate.
To tie two of your comments together, this post did cover a lot of ground. In order not to make it book length, choices had to be made as to how much detail or how many examples could be included and still keep the post to a manageable length. However, I did provide a specific example of one "lip service" policy that actually gets a lot of lip, but very little service from Conservatives, and that is tax policy. Conservatives defend the tax cuts to the super wealthy as a benefit to small business people. Also, small business people are able to arrange their affairs to maximize their tax avoidance, which is the perfectly legal practice of making choices that minimize their tax liability. This is totally different from tax evasion, which takes the form of any illegal scheme to avoid paying taxes that are rightdully due.
Balanced budgets that keep interests rates low is one example of a Progressive policy that is pro small business. Another example of a progressive policy that benefits small business was the effort under the previous progressive administration to trim the size of the government. Less government means less of a governmental burden on small businesses.
One of the reasons that companies like Costco are not lumped in with WalMart is simply due to significant differences in their personell practices. Nearly all Costco employees are eligible for a full range of employee benefits. Target is also much better in this regard tham WalMart, but not as good as Costc=o. And almost everyone has had some interaction with WalMart. Such is not the case with Costco.
Again, thanks for your thoughtful comments. You never did tell us how your adventure in small business panned out. Please don't leave us in suspense.
I always thought no one cared!
In case it might actually be interesting to you and others (I always thought no one cared!) I have hunted and pecked the keyboard to briefly describe a few of my experiences in small business. This all took place many years ago.....
Most large businesses started out as small businesses that over time became more successful. I was employed as the purchaser at a tiny electronics manufacturing startup working from a dirt-floor basement that now, 17 years, and two or three relocations/expansions later is a good sized business with many employees. Anyway, as I said, I was the purchaser, and one of the many items I "purchased" each month was the service of stuffing parts into printed circuit boards. It looked like good money, and I obtained the contract to do that work myself. I found that it paid better than the purchasing job, and it even supported an employee. We used to stay up all night drinking coffee and stuffing capacitors and resistors into pc boards. Big fun... actually it was "torture", but lucrative torture.
Another business was the wholesale sales of Venetian glass beads to bead stores in WA, OR, CA, NV and Mexico. I was also buying stone and copper beads from makers in Mexico and selling those in the USA. In fact, my business was helping to support two families in Mexico who were always busy making the copper beads. I was contributing to the economy as well by renting hotel rooms while buying and selling on the road, eating at restaurants and buying from natural food stores, renting cars, etc. and I was doing allright myself. It was happy times, not easy money, but not bad either, and I was a free man. But also completely responsible for my own situation. How I lived was a direct reflection of my success or failure at fulfilling the wants and needs of my customers, and running my business in a way which kept it afloat. It was like the ultimate video game, except it was real life, real money, and at times real fun.
I had a couple other micro-businesses, and they were each a great learning experience. For the most part, they were marginal businesses which were sensitive to small changes in the market, for example, when bead stores were booming and many new ones opened, the dollar sales per store visit went down, and then visiting two or three stores in a day of travel just covered costs, and the inventory and profits started dropping. About the same time, both Mexico and the US wanted to start making me cough up money simply for crossing their borders with merchandise... the crooks! That made bringing beads back from Mexico no longer profitable, so those families had to get along without my business, and I had to get along without their beads, and people who shopped at all those bead stores had to get along without these items too, all because of greedy governments who demanded a "cut of the action" while making the claim that they are taking my money to help people. But I WAS helping people including these poor families. Go figure!
But I can honestly say that we can not even imagine what amazing and never seen products and services would be available if people with business ideas were unmolested by such abominations as a 38% global import tax and other expropriations of very hard-earned capital, the life-blood of businesses, supposedly for "the greater good" as determined by some distant official who, as an employee of the government, the ultimate monopoly, probably has never had to face competition himself, but who survives as a parasite through the legalized plunder of those who produce. Just like bleeding a person, the entity becomes weak and unable to weather difficult times, and if bled too much, ceases to exist.
My own experience, as well as reason and logic, tells me that the business "climate" created by the economic policies in effect, have a great deal to do with the decisions made by individuals, as the policies artificially heat or cool certain sectors, and muck around with the incentives to act in particular ways. I'm not saying that by necessity, decisions imposed on one individual by another are ALWAYS wrong or bad, just that they have a great tendency to cause harm, result in negative unintended consequences, and once examined carefully are often exposed as parasitism flying under false banners and given sweet sounding names.
a couple additional thoughts....
I alluded to it in my earlier post by saying "large companies usually start out as small companies", but I should have been more explicit regarding the classification of big business vs. small business.
Unless I am misunderstanding or misinterpreting you, it seems that your thesis says, to put it bluntly, "small business good, big business bad". I think I may know what you are trying to get at, but logically, one need only point to a single of the countless exceptions to falsify that thesis. Of course there are many well behaved large businesses, just as there are many cases of "bad" small businesses.
Wal-Mart is an example of a very large business which offers many, many jobs that are low-paying. But in my opinion, factors that determine wages must take into account the skill-level of the worker, the capital invested in tools used by the worker, marginal productivity and the labor market for workers. It stands to reason, that when government imposed burdens keep many small businesses from ever being born, there will be fewer jobs created in the first place to become available for workers, and with more workers competing for fewer jobs, the market price for labor will be reduced, while in cases where businesses simply become more efficient in production or operation, the additional capital is freed up which can provide other jobs.
Slightly off subject, but do people not see what is happening in their rush to demand higher taxation for the largest corporations? I would like to ask everyone to do something very radical right now. And that is to stop and think for a minute. Individuals who work for, or head, corporations pay income tax, just as you and I do, but let's talk about taxes paid by the corporation itself, which is simply an another cost, just like the cost for labor and raw materials, which are all reflected in the selling price.
Got that? Corporations do not really pay any taxes themselves, the taxes are in fact paid by customers of the corporation. If we are speaking of major corporations that supply most everyone of us, what that means is that we are simply taxing ourselves! It is an additional hidden tax on consumers. It is one of the disguised form of taxation, along with inflation, on the common person, what some call the consumer.
I'd have to think about it more and work the numbers out, but assuming a poor family that spends 1/2 their income with large corporations, and the average 35% corporate tax rate, it could amount to an additional 17.5% hidden income tax.
any recipes for eating crow?
I am sure glad I included that caveat of having to think about it more and work out the numbers, otherwise I might be eating crow!
Regarding the passing on of corporate taxes as an expense to consumers, while the theory, I believe, still stands, my attempt to quantify it was flawed. Although a corporate tax rate of 35% is a reasonable figure to use for the example, that rate, of course, only applies to the corporations profits, and not the gross receipts! So, the amount is much lower. Oops!
Chamber alternative
My email is bananasplit@cinci.rr.com.
Please email me the alternative to the Chamber or NFIB that you are working on.
I've lost your email address. Thanks
hey gatordem, please accept an apology...
Gatordem, your reply to me was very gracious, and I enjoyed the exchange, then I just got to typing - can I possibly use the "too much coffee" defense here? - and at a minimum disregarded my own advice recommending the soft touch. When I looked back at it, it was clear that I went too far off topic, and was perhaps overly spirited in style.
I didn't intend to stifle any debate, or steer the subject away from your question, and want to offer up an apology. Hope you will forgive the transgression.
New! comments
Well, I've been waiting for someone else to chime in, but nada. From one viewpoint, that might mean that everyone is pleased with gatordem's post, because you know, people seem more prone to speak up when they disagree with something.
I read through your post, and like many posts at this blog, yours covers a lot of ground! I was wondering if that might be keeping some from responding, as it is so much easier to deal with one very narrow issue at a time. Still, I'll have a go at it....
It is refreshing to see business people discussed with the respect that some of them deserve, and recognized as an important part of the process of the production of wealth. Even Leonid Brezhnev, First Secretary of the Soviet Communist party, admitted "One can only distribute and consume what has been produced, this is an elementary truth". Unfortunately, that fact remains forgotten, or misunderstood in many economic-philosophies.
Starting a small business, for me, was a most enlightening experience, which changed my perception about how the world really works. I'd like to think that I am wiser for the experience. If you have not had that "pleasure" for yourself, one of the first suggestions I would make is rather than ask how to talk to small business people, is to really listen to them. They may have some good politico-economic insight based on practical experience that might not have occurred to you, which could conceivably help you test your theories. As much as we all like to talk, and to teach, and I am probably more guilty of that than most, still I have to admit that I have learned more by listening and reading than I have by talking. OK, let's assume you've already done that, interviewed many small business people, and listened to their concerns and views.
OK, so if I may point to a couple items..... (I'll omit pointing out the typos. I always find it useful to let someone else proofread my writing, but hey, where is "someone else" when you need them!)
Paragraph 2 - I recommend the softer touch by saying "They MAY be mistaken in their understanding..." or "SOME are mistaken in their...." I mean, maybe some are not mistaken. You imply something like "business people sell to the "Broad Middle"". Not always. In fact it is commodities, and big business that supplies the masses, and does so quite efficiently, while often small businesses are niche businesses supplying either specialty products, sometimes sub-contracted from other firms, or products and services to a very narrow customer base, or in a small geographical area.
Paragraph 4 - YES! If your platform includes reduced "over-burdensome government regulations" you'll win the hearts of many business persons. The tremendous burden in both time and expense of being forced to keep unnecessarily meticulous paper work, obtaining permits, licenses, zoning variances, and paying agencies you never heard of, 15% off the top to FICA, and much, much more, is enough to keep most small businesses from ever starting in the first place!
Under "Define the Terminology" You say "SBP believe Progressives are anti-business, they are not correct." But then you jump to "Conservative lip service". Perhaps it would be useful if you provided a few examples to demonstrate how Progressives are actually pro-business. I know I would like to hear more about that.
In the following paragraph you claim that most SBP can "arrange their financial affairs to not show very high taxable incomes". I'm not sure if you are referring to legitimate deductions, and the fact that most SBP just don't make that much money, or if you are alluding to "cooking the books" which some SBP might feel forced into risking in order to keep their business going, meet payroll, or keep shoes on their feet. As a Progressive, wouldn't you be looking to close any loop-holes that SBP might use to avoid being sucked dry?
Fair competition..... I think that might be another "essentially disputed concept" mentioned in Lakoff's "Whose Freedom?". With examples, like Wal-Mart... Ok, because I don't count myself as part of the lynch mob, why is it always Wal-Mart, and not Target, or K-Mart, or Costco in these examples? Could it be that since they started selling groceries, that they have stepped on some powerful toes, like those of the UFCW? Maybe better to say large discount chains. Anyway, won't many SBP just say that government should not subsidize anything or anyone, as it introduces distortions in the marketplace? Someone may work part-time by choice, why should they be subsidized?
I think, maybe wrongly, that most business people are already aware of the subsidies that their hard-earned tax dollars fund, whether it's to farmers for not growing food or hundreds of other welfare programs for businesses, including many for Small Business too, but that means nothing if it is not YOUR small business. I think many SBP just want to be left unmolested.
I think I'll make my last comment about your assertion that SBP understand economics. That subject, economics, happens to be very dear to me, and I have put a great deal of time into reading, studying, and thinking about it. You may be correct as far as Micro, the SBP is hyper-aware of his own personal economics, but large-scale economics, understanding the long-term effects of policies and consequences for groups other then the intended one, is just not well understood by most, and it has been my personal experience that economic fallacies and myths are widely held as fact by not only SBP, workers, and the unemployed, but by big business people, government officials, and politicians as well.
A good start for anyone really interested in better understanding economics is Henry Hazlitt's "Economics in One Lesson". Fredric Bastiat's "The Law" is also a good starting place. Both are available on-line at no cost.