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Small firms: Obama doesn’t understand us

Nearly 60 percent of small business owners think the Obama administration doesn’t understand the needs of small firms, according to a recent survey.
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Nearly 60 percent of small business owners think the Obama administration doesn’t understand the needs of small firms, according to a recent survey conducted by City Business Journals Network.

More than 40 percent are less optimistic about the national economy than they were when President Barack Obama took office, compared with 26 percent who are more optimistic. Nearly half think Obama will serve only one term in office. When asked their political affiliation, 42 percent said they were Republicans, 34 percent said they were independents and 16 percent said they were Democrats.

The survey was based on Internet interviews of 301 business owners, CEOs and presidents of companies with five to 499 employees. City Business Journals, a subsidiary of Charlotte, N.C.-based American City Business Journals, said the survey sample was weighted by size of business and geographical location to reflect the small business community at large.

The interviews were conducted from March 13 to March 21, a time when the public became outraged by $165 million in bonuses awarded by American International Group, a company that has received more than $180 billion in taxpayer money.

Subsequent telephone interviews with some of the survey participants show that anger over bailouts of financial institutions and auto makers have colored many small business owners’ opinions about the economy and Obama.

“He’s putting all this money into a big sump hole that isn’t going to do anything,” said Martha Gazay, owner of Pacific Travel Center in Tacoma, Wash. “I think he’s bankrupting America.”

“I see inflation coming,” said Pat Moore, owner of Moore Enterprises, a 150-employee Overland Park, Kan., company that provides private-duty health care.

Several small business owners said even huge companies should be allowed to fail.

“If you didn’t run your business properly and you can’t survive, go away and let the strong survive, because that’s the way it’s always been, and that’s the way it should be,” said Ronnie Nudelman, owner of Whitney Printing Corp. in Buffalo, N.Y.

But Mark Bazrod, owner of LPI Software Funding Group in Wayne, Pa., said the banking bailout was necessary, even though he thinks banks created many of their own problems. Unlike many small business owners, he is more hopeful about the economy now that Obama is president.

“I’m much more optimistic about the economy because I think he’s a smart guy, and he’s approaching the problem in a systematic fashion,” said Bazrod, whose firm leases software to businesses.

Bazrod also gives Obama credit for reaching out to small businesses to try to understand their needs. Other business owners, however, said Obama is out of touch.

“I worry when you have someone who has never had to make a payroll,” said Pamela Ledford, owner of Dynamic Truck Repair in Columbia, S.C.

George Corbitt, owner of Corbitt Construction Co. in Knoxville, Tenn., doesn’t think Obama understands that small business owners have employees who depend on them to keep their companies going so they can get their paychecks.

Corbitt’s company supplies specialty items to general contractors.

“All it takes is for one individual not to pay you, and you’re having a very difficult month,” Corbitt said. “You’re fighting for every morsel of money out there, and there’s not any money out there,” he said.

Only 34 percent of small business owners think the $787 billion economic stimulus package, which was signed into law Feb. 17, will turn the economy around. Even fewer — 27 percent — think their business will benefit from this legislation.

“I don’t see anything changing,” said Hagop Nalbandian, a gas station owner in Los Angeles. “I see ‘for lease’ signs everywhere as far as stores go. People are just walking away — they’re closing up.”

Nalbandian is frustrated that despite the billions of dollars that the federal government has poured into banks, he still can’t get a $250,000 loan to expand his station’s snack shop. He said he has 30 years in business, low debt and an excellent credit history.

“Where did all that money go? I don’t understand,” he said.

More than 75 percent of small business owners think that banks that have received government funds should be required to increase lending to small businesses. More than half said their business has been at least somewhat affected by the tight credit market.

The survey also found that two-thirds of small businesses are concerned that health care reform — a top Obama priority — will increase the cost of doing business. A majority also oppose Obama’s proposal to cap carbon emissions in order to combat global warming.

Small business owners were split down the middle on Obama’s proposal to increase taxes in 2011 for families making more than $250,000 a year. The survey found that 45 percent thought this tax hike would be unfair, while 44 percent said it would be fair. Only 24 percent said they would be personally affected by the increase.

Most small business profits are taxed at the individual level, and raising the tax rate for higher-income business owners would “penalize people for trying to be successful,” Ledford said.

“I guess all you can do is hope your business doesn’t make any money, which is a sad thing to say,” said Mary Riley, owner of Modern Lift Inc., a fork lift dealership in Tucson, Ariz.

Nalbandian, however, said he would love to pay more taxes if he were making $250,000 a year, but he is “not even close to that.”

“If you make over $250,000, you can afford to pay a little bit more,” he said.