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Small businesses don’t expect government to help them recover

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Written by
Associated Press

 

 

Dallas entrepreneur Nikhil Nilakantan is trying to hire two people now and more next year.

Fellow startup founders Shama Kabani and Steven White each plan to hire about 10 people next year.

They’re not waiting for, nor do they expect, government help.

 

They and three other small-business owners interviewed by the Dallas Morning News say the federal government’s attempts to help small businesses through various incentives and programs, especially tax credits, are ineffectual.

 

The six business owners discussed the biggest issues facing them at a roundtable discussion last week hosted by The Dallas Morning News. Their experiences provide a behind-the-scenes glimpse into how small businesses adapt to a challenging economy.

 

Congress is working this week to extend a payroll tax cut paid by employers and employees that’s set to expire on Dec. 31.

 

If the payroll tax cut is not extended, “it would be bad for the economy,” President Barack Obama said last month in New Hampshire. “It would be bad for employment.”

 

Some small-business owners don’t see it that way.

 

“It wouldn’t deter us from hiring someone, nor would it encourage us to hire someone,” said Kabani, who started Marketing Zen Group in Dallas in 2009. “If you don’t qualify for what we need, then no amount of money will get me to hire you.”

 

White is co-founder of Anna, Texas-based Image Vision Labs, which develops software to detect pornographic images and video. He said he’d like the government to offer programs to help him generate more revenue instead of programs to help reduce his operating expenses.

 

Apparently, he’s not alone. More than a quarter of U.S. small-business owners cited poor sales as their biggest business problem, according to a survey by the National Federation of Independent Business.

 

All six businesses took steps, such as cutting staff and expenses, reducing their own salaries and finding new markets, to survive the recession. Three of the six are virtual, meaning they have no physical office, which helps keep costs low. Three of the six companies were created during or just before the recession, so their owners have never known anything other than uncertainty.

Some have seen the economy rebound; others have not. But they’ve all become smarter about controlling expenses and looking at new sales models.

 

After losing half of its public relations business in the last three years, the Cooper Smith Agency cut costs and went from 10 to four employees. Since then, owner Cooper Smith Koch has expanded his product placement and social media work, but he’s still cautious and is planning to move into an even smaller office.

 

As consumers cut their discretionary spending, it has hurt companies such as House of Lane Catering & Food and IntelliGender, which makes kits sold at drugstores to test the gender of a fetus.

 

“Our product is a like, not a need,” said Teresa Garland, who co-founded Plano, Texas-based IntelliGender in 2006 with husband Don and another couple. This year, she expects revenue to decline about 30 percent from 2010 because of the economy.

 

In response, IntelliGender has reduced its number of contractors, renegotiated terms with vendors and is looking at adding a new product in 2013 to generate more revenue, Garland said.

 

Kira Lane, who owns the Dallas catering firm, expects revenue this year to be down 20 percent to about $400,000, partly because of fewer holiday parties.

 

“I have to find very creative ways to get business,” Lane said. So this year, he began offering free tastings to attract more customers.

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Written by demon53

December 14, 2011 at 4:51 pm

Posted in Uncategorized

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