Small Business Majority Blog

Small Business Matters

There are many complex policy issues that have a major impact on the small business community. Each week, we’re going to help break one of those issues down so small business owners can stay in the know and remain aware of their stake in these national issues. This week’s Issue Q&A is on minimum wage.

Q: Why is the minimum wage debate so important to small business?

A: Small business owners and the economy are still recovering from the Great Recession. As the nation’s leading job creators, small businesses create the jobs that keep our economy growing. In order to do so, entrepreneurs have to bolster their bottom lines and fuel the consumer demand that underpins economic success. With an increase to the federal minimum wage, consumers will have more money lining their pockets that they will then spend at their local businesses. This surge in consumer demand will push the economy forward and allow small businesses to continue thriving.

Q: How would a raise to the minimum wage impact small businesses?

A: Seeing as how consumer demand is the No. 1 concern for small business owners, a majority of entrepreneurs believe a raise in minimum wage will stoke that demand. According to our scientific polling, 57% of small business owners support increasing the federal minimum wage to $10.10 an hour and believe it should be adjusted annually to keep pace with the cost of living. In fact, 82% already pay more than the current minimum wage. A majority sees a wage increase as useful in helping them create more jobs, which in turns strengthens our economy as a whole, creating an economic domino effect.

Q: Won’t an increase to the wage raise costs for small businesses?

A: A federally mandated increase would place all small businesses on a level playing field, and would make businesses more competitive because competitors won’t have the upper-hand in undercutting them on labor costs. Small businesses also care about their employees and view them as family, which is why a majority agrees it’s not right for any employee to work full-time and only earn the current minimum wage. A stronger, more loyal workforce will decrease the rate of turnover and training costs, saving small businesses money. Additionally, the more money consumers have in their pockets, the more disposable income they’ll have to spend on small business products and services, allowing small businesses to grow and attract a more talented workforce. To learn more about the positive business impacts on a raised minimum wage, and to read testimonies from real small business owners on why they support increasing the minimum wage, visit http://www.smallbizsayraisethewage.com.

Small Business Majority CEO John Arensmeyer

Originally published in The Huffington Post

Some work has been done recently to address tax loopholes for large corporations, such as the notorious corporate tax inversions, which put small businesses at a disadvantage, but more needs to be done to help level the playing field for small businesses.

Small business owners across the country are putting countless hours into their companies, working hard to sustain and grow their businesses and with them, our economy. While the success of small businesses is key to our full economic recovery, the path to economic stability is threatened when a select few are given special tax treatment.

That’s why entrepreneurs, lawmakers and consumers are becoming increasingly concerned with large corporations’ use of a tax loophole, called an inversion, which allows big businesses to relocate their base overseas for tax reasons. This practice leaves consumers and small businesses holding the bag when it comes to bolstering the nation’s tax base, and gives big companies an unfair advantage over small business owners who must pay full freight because corporations can then use the savings to undercut them on costs. The Treasury Department recently announced it will use regulatory authority to take action on inversions, which is a step in the right direction, but we need policymakers and lawmakers to do more to close tax loopholes that harm small business owners.

Inversions allow corporations to purchase a company in a tax-friendly nation in order to relocate their headquarters to save money on taxes. For all intents and purposes the company remains a U.S. company, continuing business as usual–just enjoying a lower tax rate. The rub is that their tax burden is then shifted to small businesses and consumers.

When large corporations don’t pay their fair share, it hurts small businesses, our economy, our ability to invest in our national infrastructure and so much more. It gives those benefitting significantly from everything the American economy has to offer the ability to duck their responsibility to contribute to it.

Small business owners are tired of doing their part while big corporations use unfair loopholes to shirk their obligation to the nation that helped make them successful. In fact, Small Business Majority polled a random sample of entrepreneurs across the country and found nine in 10 owners say the practice of U.S. multinational corporations using accounting loopholes to shift their U.S. profits to offshore subsidiaries to avoid taxes is a problem, and they support eliminating these tax breaks and providing incentives to bring production home.

What’s more, 75 percent say their small business in particular is harmed when big corporations use loopholes to avoid taxes, and a sweeping 90 percent believe big corporations use loopholes to avoid taxes that small businesses have to pay.

Politicians on both sides of the aisle have agreed we need to address this issue, but they have yet to move forward on legislation that would address the practice of inversions. And while the Treasury Department’s announcement that it will use regulatory authority to help address this is welcome news, we need congressional action to help close unfair tax loopholes across the board.

Politicians talk a lot about their support for the small business community. Job creation and economic stability can start with the closure of tax loopholes that give big corporations an unfair advantage. Putting small and big companies on the same plane is a no-brainer. It would strengthen the economy and bolster small businesses.

It’s time lawmakers put their money where their mouth is, and move forward with a plan to close these unfair tax loopholes now.

On October 10, Small Business Majority successfully executed a Thunderclap campaign called “Small Biz Say Raise The Wage” that received tremendous support from small business owners across the country on efforts to raise the federal minimum wage.

Thunderclap, a crowdspeaking platform that amplifies messages on social media by saying them at the same time, is essentially an online version of a flash mob. It allows a single message to be mass-shared so that it goes beyond your own social following.

Small Business Majority created a Thunderclap campaign with a message around a petition to increase the minimum wage and launched a campaign to get 100 supporters. People sign on to the campaign using their Facebook, Twitter or Tumblr profiles. If a campaign’s goal is reached, that message will disseminate at the exact same time from all of the supporters’ social media profiles.

With our scientific opinion polling which found that 57% of entrepreneurs support an increase in minimum wage, this Thunderclap campaign was a way to mass spread that small business perspective to a much larger social audience.

Take, for example, Kristine Cranton, owner of Catalina by the Sea Gifts and Souvenirs in Avalon, CA, who already pays her employees above minimum wage because of the benefits to her business, like employee retention and much lower training costs.

“As a small business owner, I can say that I am definitely in support of increasing the federal minimum wage to $10.10 an hour. Not only is it the right thing to do for employees, but it also makes business sense,” she said.

Then there’s Peggy Zwerver, owner of Earth – Bread + Brewery in Philadelphia, PA. Her support for an increased wage stems from the thought that all employees should be able to live off of what they earn.

“I am in support of the minimum wage increase. To me, the increase to $10.10 an hour seems like a reasonable amount to pay in order to provide my employees with a livable wage without harming my business.”

With the help and support of small business owners like Kristine and Peggy, the “Small Biz Say Raise The Wage” Thunderclap campaign was a resounding success. With 108 supporters amassing a social reach of 242,000, the message that small businesses truly do say its time to raise the wage was spread like wildfire.

Not only were these business owners able to get the business message across, such as how an increased minimum wage would boost consumer demand and level the playing field for many small businesses, but they were also able to appeal to the cause on a personal level that still held onto the positive outcomes to their business.

“We support raising the minimum wage because paying your employees a respectable wage is the right thing to do,” said Dr. Adalina Kulback and Mitchell Josim, owners of Windy City Eyes in Chicago, IL.

“We believe raising the minimum wage can help foster trust, loyalty and respect in our employees. Paying employees a living wage isn’t a whole lot to ask.”

While the storm rages on over the debate for an increased wage, one thing is for certain. The small business support for such a measure is only growing more thunderous by the day.

Interior cafe of Coppa Gelato in Westerville, OH.

Here’s a scoop: Residents of the Columbus, Ohio area do not have to take that lavish Italian dream vacation to get their hands on some dynamite gelato.

Coppa Gelato, a family-owned gelateria, offers authentic Italian gelato out of a cozy café in the town of Westerville.

Linda Davis had been dreaming of opening her own ice cream shop for more than 30 years. After selling real estate for almost 20 years, Davis quit cold turkey and turned her attention towards that dream. After getting her first taste of gelato, and learning it was healthier than traditional ice cream, she set her sights on opening a gelateria.

“For a little over a year, I researched gelato and visited every gelateria in Columbus,” Davis said of her icy plunge into the entrepreneurial world. Columbus was an integral starting point as Davis notes “many major corporations test the market by introducing their product in Columbus.”

Davis studied under gelato experts from Italy to perfect her craft, researched the market, found a booming retail space and hired contractors to start constructing her vision all before opening Coppa’s doors this past July.

Enlisting the help of her two daughters, Alycia Turley and Lindsey Kovach, Coppa Gelato launched to rousing success. In addition to the 30 flavors of gelato available, Turley is a pastry chef and makes everything from cream puffs to macaroons. Kovach serves as Coppa’s marketing and business coordinator.

“I think the biggest challenge is keeping the business separate from family time,” Davis said. “Lindsey, Alycia and myself live and breath Coppa Gelato, and trying to have dinner without talking business is nearly impossible.”

However, it’s this close-knit working environment with her family that remains one of Davis’ biggest joys.

“The number one part about owning this business is being able to spend time with my daughters and grandson, even if it’s at the café. I am extremely fortunate to have family members involved in every aspect of the business.”

A few of Coppa Gelato's 30-plus flavors.

When it comes down to it, however, it’s all about the gelato. Coppa Gelato makes each batch fresh daily with no pre-mixes. With 30 flavors and counting, Davis says that the seasons play a big role in experimenting with new flavors. This coming fall will introduce pumpkin, apple pie and harvest spice concoctions.

What truly makes Coppa Gelato stand out is the way it embraces traditional and authentic Italian-style gelato, without neglecting the local Ohio sensibilities. Many of their most popular flavors are plays on Ohio-specific traits. The B’Urban Meyer, Coppa’s take on the classic butter pecan flavor, is named after the Ohio State University football coach. Meanwhile, nothing says Ohio state pride like having a flavor called The Buckeye, crafted to meld the smooth chocolate and rich peanut buttery tastes of a buckeye candy.

With a nod to their community, Coppa Gelato keeps customers happy with top-notch service.

“The staff goes out of their way to make each customer feel they are having a special experience, including silver dishes, silver spoons and a Ciao cookie with each serving,” she said.

As Coppa Gelato plans to start distributing to restaurants and grocery stores in the near future, Davis hopes to spread a little piece of Italy along with that undeniable Midwestern charm to customers everywhere.

Jennifer Strain was all washed out after being in the corporate world for many years. But after a night snuggled up in bed reading a book on soap making, Strain’s cleansing process began with an idea that had the sweet smell of success.

Good Fortune Soap, a manufacturer, retail store, spa and wholesaler in Chattanooga, TN, is Strain’s one-stop destination for washing one’s troubles away. And the process of starting this small business did just that for her, as well.

“I worked in the corporate world, but was ready for a change and longed for a different career, a lifestyle that fed my mind, body and spirit while also providing a way to connect with and help others,” Strain said.

She began her fortuitous journey by studying soap making and the natural products industry, focusing on all natural ingredients. “The fearless mad scientist I knew as a child took over as I experimented by making hundreds of batches of soap, scent combinations, shapes, colors and more,” she said.

Having spent 8 months in a lab perfecting her craft, Strain finally launched Good Fortune Soap as an open house in December of 2006. In just two days, she sold hundreds of bars of soap and gift sets, with two local gift shops placing orders for Good Fortune’s entire collection of scents and gift sets.

After that initial success, Strain’s next-step was a no-brainer: “Without hesitation, I took the plunge – sold my house, quit my stable job and took Good Fortune all the way.”

Jennifer Strain, owner of Good Fortune Soap

Good Fortune has evolved from the soaps and gift sets it started out on to become a full-blown spa destination and retailer. Locals across Tennessee come to Good Fortune’s Spa & Soap Boutique for massages, organic facials and the make-your-own perfume bar, which boasts over 60 oils and fragrances.

Still, it’s Good Fortune’s wholesale soap that continues to be one of their most popular items, along with The Kiss Me Kit, an exfoliation and moisturizing lip kit promising “serious lip therapy never tasted so good.”

But, ask Strain in hindsight whether she foresaw the success of Good Fortune, and she’ll tell you she’s just as surprised as anyone.

“Honestly, it was a complete leap of faith,” she said. “I was a 26-year-old fine arts major with a natural born drive for entrepreneurship. I had no idea about the market drive, but I knew that I wanted to create beautiful skin care products and make a difference in people’s lives. I’m grateful it has turned out so well.”

Moving forward, Strain is looking to bring her good fortune right to people’s front doorsteps.

“We are working on adding home show parties to our local sales events calendar. This would enable us to take Good Fortune Soap into the homes of our customers so they can pamper themselves and shop in the comfort of their own homes.”

With this convenient, customer-minded business model, Good Fortune Soap is banking on a happy clientele that likes to rinse, lather and repeat.