New Year's Resolutions for Small Business

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Dan Kelly column
Financial Post Small Business
Publication date: January 3, 2012

 

New Year's Resolutions for Small Business

As I set my annual new year's resolutions to eat better and exercise more (ok, begin exercising), it got me thinking about new year's resolutions that governments and members of the public could make to support Canada's entrepreneurs.  Here are a few ideas how governments and all of us can help:

Small Business Resolutions for Us All:

• 1. Visit a small firm more regularly: When you are shopping or out for dinner, think about how you can support a locally owned independent business. When we are out to the mall or the big box store, we miss out on fantastic opportunities for unique products and better customer service. Also, we support locally entrepreneurs who take huge risks to create jobs and pay taxes to support us all.
• 2. Pay with cash or Interac when visiting a small business: Few Canadians realize how much paying with credit cards costs small merchants - about 2-3% of the entire sale (including the sales taxes) goes to the credit card company and bank in fees. Paying with Interac or cash saves small firms a fortune and helps them keep prices down for us all.
• 3. Consider working in a small business: Small firms can't always pay the same wages and benefits of larger firms (or governments), but they can offer rich opportunities to gain experience, have variety in one's work and greater flexibility than in larger business. Polls show that employees at small firms are generally happier with their working environment than those working in big business or the civil service. Most importantly, the recession reminded many that small firms are a great source of stability in good times and bad. Employment in the recession held steady while larger firms shed nearly 10% of their payroll.
• 4. Think about becoming an entrepreneur yourself. While the hours are long and the rewards can take a while, there are thousands of great opportunities for Canadians to create their own job - and employ others.
• 5. Encourage young people to consider entrepreneurship. While this hasn't always been the case, Canadians today have an incredibly positive view of entrepreneurs. Over 90% of us would approve of our children becoming an entrepreneur and farmers and small business owners are now the most respected groups in society. Ensuring we don't just steer our young people into jobs in big firms or government can be a huge help in building the next generations of entrepreneurs.

 

Small Business Resolutions for Governments:

• 1. Build on Year of the Entrepreneur: All 10 provinces joined the federal government in declaring 2011 as the Year of the Entrepreneur. In addition to celebratory activities on the importance of entrepreneurship, many governments made significant announcements to better the lives of job creators. Governments need to keep this positive momentum up in 2012 and move forward on small business priorities.
• 2. Don't Hike Payroll Taxes/Costs for Small Firms: As many firms continue to struggle with the international economic uncertainty, now is not the time to raise payroll taxes. While the federal government has helped soften the blow, it is still raising Employment Insurance rates this year. Many provinces have hiked the cost of workers' compensation and raised minimum wages right through the tough times. Also, provincial government s should scrap any discussions of a CPP hike as, for most firms, this is already the most expensive payroll tax they face. The Federal government should also reintroduce the successful EI Hiring Credit to help small firms hire and train.
• 3. Make a Dent in the Red Tape Burden. In a few weeks time, CFIB will launch the 3^rd annual Red Tape Awareness Week to remind governments and the public of the challenge of red tape, paperwork and poor government service on SMEs. We were very pleased that Prime Minister Harper participated in this last yearby announcing the creation of the Red Tape Reduction Commission. We're hoping this effort, and the plans made in several provinces and cities, will bear fruit early in 2012.
• 4. Create Pension Fairness and Sustainability.  Canadian governments are spending more time patting themselves on the back that we are not suffering as much as our trading partners than examining whether these ugly trends are coming our way. While Canada is better off, we are not immune from the demographics and funding challenges facing our retirement income schemes in Canada - particularly in the public sector.  With the main federal government pension fund short $227 billion and provincial and municipal gaps not even fully measured, Canada is also facing a pension time-bomb. Having federal workers pay half of their pensions, phasing out early retirement in the public service, basing pensions on lifetime earnings and putting new government employees on a more affordable plan is happening around the world. Without action, Canadian taxpayers will be on the hook for huge new taxes to pay the tab.
• 5. Reduce high credit card fees. To support small businesses, governments - particularly those using costly American Express cards - should look at the plastic they issue to civil servants and ensure the costs are kept low.  The federal government should improve its excellent Code of Conduct to address emerging cell phone payments to prevent it from becoming another fee bonanza for the banks and card brands. Also governments should look at ways to exempt small firms from having to pay credit card processing fees on the billions in sales taxes they collect each year on behalf of the state.

These are a few of the many ways we can help small businesses in the year ahead.  Canadians and politicians are certainly speaking the right language these days about supporting our job creators.  Here's hoping we can turn good intentions into action in 2012.