Small Business Majority Blog

Small Business Matters

Small Business Majority CEO John Arensmeyer

For 80 years, the U.S. Export-Import Bank has been financing the export of American goods and services, largely from small businesses. Though it has historically been an important resource for small businesses, recent efforts by lawmakers to defund the bank have put its future into question. Unfortunately for small businesses, Congress failed to address the long-term security of the Ex-Im Bank and instead chose a short-term fix to reauthorize the bank’s charter through June 2015. If lawmakers don’t act to pass a long-term reauthorization of the Ex-Im Bank, its loss could trigger far-reaching consequences for the small business community.

The Ex-Im Bank is so important to small businesses because it gives them an edge by leveling the playing field between small firms and their larger counterparts. The bank fills in the gaps offered by traditional financing, and by partnering with private sector lenders to provide loans and credit to aid foreign purchasers in buying American-made goods. Many small businesses rely on the bank because commercial lenders typically don’t support small businesses in this area. In fact, nearly 90 percent of Ex-Im Bank’s transactions in 2013 were for American small businesses. Without the bank, many small business owners say they wouldn’t be able to compete internationally.

What’s more, foreign markets represent a significant growth opportunity for many U.S. small businesses—96% of the world’s consumers live outside the United States and two-thirds of the world’s purchasing power is in foreign countries. Our small business owners must have the tools and resources needed to take advantage of this potential and the security of a long-term solution so they can continue to grow their business with greater confidence.

Small business owners have been taking to the Internet to show their support for long-term reauthorization of the Ex-Im Bank using Small Business Majority’s Ex-Im Thought Bank. This website allows small business owners to share their experiences with the Ex-Im Bank and have their comments sent directly to members of Congress. What’s more, Small Business Majority’s Economic Agenda for America’s Future points to a long-term reauthorization of the Ex-Im Bank as an important step Washington can take now to help bolster small businesses and the economy.

Failure to pass a long-term reauthorization of the Ex-Im Bank would be damaging to the economy and place an unfair burden on small businesses and other hard working exporters. It’s time for Congress to find a permanent fix for the Ex-Im Bank so small businesses can have the certainty they need to continue brokering deals with foreign countries that strengthen our economy here at home.

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 immigration reform.

Q: Why is immigration reform a small business issue?

A: Without comprehensive immigration reform, small businesses and the economy cannot maximize job creation or revenue generation. As the nation’s primary job creators, small businesses seem to agree something must be done because immigration reform is good for their bottom lines and for our nation’s economy. To illustrate, according to our scientific polling, a sweeping 88% of small businesses agree that our current immigration system is broken, with half believing it is in need of a major overhaul. What’s more, 84% of entrepreneurs support a bipartisan Senate proposal aimed at reforming our immigration system.

Q: How will immigration reform specifically help small businesses and the economy?

A: Many companies, particularly in lower waged industries such as cleaning and food services, target undocumented workers for the employment that they desperately seek. These companies pay them meager wages, creating an unfair playing field that hurts other small employers who play by the rules and pay their workers fairly. This perpetuates a shadow economy that stifles small employers’ ability to create jobs and grow our economy.

Q: What are some solutions to immigration reform?

A: A vast three-quarters of entrepreneurs agree we are better off letting people who are in the country illegally become legal taxpayers, so they can pay their fair share and work toward citizenship in the future. By creating a path toward citizenship for undocumented workers, it creates the opportunity for them to become true contributors to our nation’s economy. Additionally, a majority of small business owners agree it’s important for the country and the overall economy to allow more high and low skilled foreign workers into this country. Allowing higher skilled foreign workers into the country legally boosts innovation and entrepreneurship, while lower skilled foreign workers are more likely to take jobs in the service or agricultural industries that many Americans won’t take themselves.

A love for pounding out rhythms and grooves with his own two hands became an unlikely success story for Kevin Brown, owner of Rhythm House Drums.

The Matthews, NC based small business was a labor of love for Brown, who claims it wasn’t his initial goal to set off and start his own business.

“I was just playing and building drums as a hobby,” Brown said. “I soon realized that what I was doing was very unique and others were interested in these drums.”

Hailing from a family of classically trained musicians, Brown also gravitated toward his musical muses. His first introduction to percussion came in college where he was seduced by West African rhythms and the surrounding culture behind them. He soon set out to make and sell these types of drums, setting up a website that spiraled into Rhythm House Drums.

“Inspiration grew from the desire to build a better hand drum,” he said, noting that most mass produced drums don’t have the rich sound or look that many organic West African drums like the Djembe possess. “I wanted to do better, for myself and other drummers.”

This proved to be a challenge initially, seeing as how mass-produced and imported drums are sold on a fairly large scale and are cheaply made. Some cultural traditionalists also dismissed Brown’s use of local North Carolina lumber and other materials in his drums.

Djembe drum

“[Many] believe a Djembe should be made in Africa with African wood,” he said. “It’s been challenging to change their minds and show the benefits of locally built drums from locally felled lumber, and using modern tools to create completely unique pieces.”

But Brown’s love of the drum, particularly the West African Djembe, which he describes as “extremely powerful and very dynamic,” clearly shined through in his creations, as the Djembe has become his most popular product. Drummers can also find everything from the Nigerian style Ashiko to Native American Powwow drums at Rhythm House Drums.

Native American Powwow

Brown fully admits that it was his musicality and genuine affinity for drumming, not his business acumen, that truly helped Rhythm House Drums become what it is today. “I’m not a businessman – I didn’t have goals other than to build kick ass drums.”

Rather, it was his love and passion for percussion that was the driving force behind his business. “Hand drumming in itself isn’t a huge business – narrowing that down to a specific style of hand drumming means that you better be doing this because you love it, not to get rich.”

With the Djembe now conquered, Brown has his sights set on a specialty Conga. “After lots of research, I have finally started to develop, design and hand craft my own stainless steel hardware for Conga drums. I believe this will be a game changer for me as it opens up a whole new market.”

As Brown perfects his Conga craft, and with the dream of moving to a larger storefront that would serve as a studio where locals could come hang out and play music, it looks like the beat will go on for quite sometime for Rhythm House Drums.

Mini Conga Quinto & Ashiko

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 family medical leave.

Q: What is family medical leave insurance?

A: Family medical leave insurance is a program that provides employees with a portion of their wages for a limited number of weeks when the employee has a serious illness, a new baby to care for or a seriously ill family member in need of care.

Q: What should small businesses be aware of when it comes to family medical leave?

A: The Family and Medical Leave Act, a law signed over 20 years ago allowing eligible employees of covered employees to take a limited amount of unpaid, job-protected leave is supported by more than 80% of entrepreneurs, according to our scientific opinion polling. Currently, there are proposals to set up publicly-administered family and medical leave insurance pools at the state and national level.

Q: Are there any differences between the national FAMILY act and the proposals being considered at the state level?

States like Connecticut, Colorado and New York are considering proposals that would create state-administered insurance programs funded entirely by modest employee payroll contributions. Our polling found that a majority of business owners support these types of insurance pools.

Q: Why do these types of policies matter to small businesses?

A: The hard work and vitality of small business employees are crucial to a business’ success. It makes good business sense to take care of employees in order to retain a loyal, talented and healthy workforce, and to attract the top talent around. In fact, 68% of small businesses already have either a formal or informal policy in place when it comes to family medical leave. These policies afford employees a set amount of time they can take off for a serious illness or if they need to care for a newborn or loved one, without having to worry about losing their job. Additionally, nearly 40% of small business owners already offer full or partial pay to employees for this leave.

Small Business Majority CEO John Arensmeyer

Originally published on The Huffington Post

The level of inaction in Washington is stunning.

The relief among pundits, news hounds and politicians was palpable when insiders announced last week that Congress is expected to pass a temporary funding bill to keep the government open past the end of the month.

Don’t get me wrong. We all are happy to avoid another government shutdown. But, when did the bar dip this low? How is it possible that agreeing to keep the government running for a few more weeks is treated as a victory of governance when our economy is limping along?

After enduring a paralytic Congress more concerned about re-election than governing the nation for years, small businesses have had enough.

Enough to the lip service they get about being the “backbone of the American economy” when it isn’t followed up with meaningful action to help the economy improve.

Enough to the lip service that in reality hijacks small businesses’ good name to support policies that only help big companies.

Enough to the lip service that does nothing but check a political box on a campaign trail.

Small business owners — people who work hard, hire workers and make the difficult decisions needed to stay in business everyday — are tired of being pandered to. They are tired of empty words. They want action.

So this week Small Business Majority is releasing its Economic Agenda for America’s Future — a set of policy recommendations that will ensure an environment where entrepreneurs, and our economy, can thrive. In addition to long-term recommendations, the Agenda also includes things Washington, not just Congress, can do right now, over the next few months, that will go a long way toward bolstering small businesses.

And because small businesses are not simply the backbone of the economy, but are its very foundation, Washington moving on just one or two of these policies will help small businesses succeed and our economy more fully recover.

The recommendations range from action on taxes, infrastructure and healthcare to immigration and exports that are all tied to creating opportunities for small businesses and entrepreneurs. Why? Because small businesses make up 99 percent of the businesses in this country. They employ half of America’s private sector workforce. And, they create jobs.

Small businesses have been doing their part — outperforming big business on the job creation front every month for the past year. But, they can do more if Washington will only step up and take a role in helping fuel this engine for growth.

For example, over the next couple of months, Washington can create greater opportunity for entrepreneurs on several fronts, including:

  • The president can take executive action to allow more legal immigrants into the United States to ensure small businesses have access to skilled workers, at both the high- and low-skill level.
  • The Securities and Exchange Commission can release final rules for crowdfunding (after having spent more than two years deliberating on them) to provide small businesses more opportunities to get capital and investment in the growth of their businesses.
  • Health and Human Services can make sure the online small business insurance marketplaces work on Nov. 15 (after being delayed for a year) so small business owners and their employees have greater access to affordable coverage.
  • Congress can pass a long-term reauthorization of the Export-Import Bank, not just an extension of a few months, to ensure small businesses (for whom nearly 90 percent of its transactions were for in 2013) have the ability to compete for customers in the global market.

And, the list of things Washington can do to help small business over the next two years is even greater.

An August NBC News/Wall Street Journal poll found 71 percent of respondents blame Washington’s inaction for what they view as a lingering sluggish economy. That’s shameful.

Our political leaders need to stop just paying lip service to America. They need to stop trying to convince Americans that the real work has to wait until after the next election, and then the next election.

We can rebuild our economy to the height it was before the Great Recession. And, it begins with helping small business thrive.