The Reason Small Businesses Are Disappearing, As Explained By A Small Business Owner

Zero Hedge ^ | 11/14/2014 | Tyler Durden

[SeekAndFind]

Confused why despite endless daily propaganda that the US economy is getting better - after all "just look at the record high S&P 500" - fewer and fewer Americans believe the narrative, as the Democrats and Obama found out the very hard way in last week's midterm elections? Then the following explanation written by the owner of a small business - the segment of the US economy that has historically led every single recovery but this time was left behind - should help answer some questions.

The reason small businesses are disappearing written by a small business owner.

I want to start out by saying that i am a 27 year old male with a small business in Sacramento CA. I started this business a few years ago with savings of 15k. With a lot of hard work and determination i have succeeded, but it sure as hell was not easy. I am a long time lurker and have never seen anyone go in depth about what its like to own a small business and the reason why they are disappearing. Without going into to much detail, i own a furniture store so obviously things are different then other businesses but a lot of the things are the same. I wanted to begin with the things that are killing small businesses. Also only my opinion.

1. Small Business Loans - Although they are not killing small business they sure as hell don't help anyone. Unless you are opening a unique small business you are not going to get any funding. By unique i mean something along the lines of creating solar panels. According to a recent investigation by the SBA Inspector General (ill post the article if you would like), over 75% of SBA loans went to large businesses. So basically if you want to open a normal business you need a ton of collateral and a miracle to get a loan.
2. Permits and Licensing - In opening my specific business the first year totaled about $2000.00.
3. Advertising - Many small business's cant afford to take out pages or flyers in the news paper or TV ads so they only have a few choices such as Yelp or the Penny-saver. (Don't get me started in Yelp).
4. Street Advertising - While this used to be a good portion of how you get business it is now off limits. Code enforcement will not allow you to put anything outside. No balloons, signs, anything with your store name, window paint more than 50%, or any mattresses. Also delivery vehicles can not be closer than 50 feet from the curb. In my case that means behind the building.
5. Board of Equalization - Cant go into to much detail here but they sure as hell aren't here to help.
6. Health Insurance - Now obviously with the people that have a large work force working full time they will be hit hard by obamacare, but i wanted to give you a perspective on a single person. The cheapest rate for myself and me only, and believe me i have looked around, is $250.00/month. Some might say oh that's not bad, but let me explain what that covers, NOTHING lol. Basically if something happens to me i have to shell out 6K before insurance gets involved. Also 100 dollar co pay every time i go.
7. The economy - While many know that when the President comes on TV and says the economy is doing great, we all know it is not, some people don't. Every month more people drop out of the Labor Force and the number of families on food stamps is sky rocketing. So for those of you who don't know the economy is terrible because of all the top stories of Kim Kardashian and whoever else, lots of people in america are struggling.
8. Merchant Fees - This is for credit card processing machines. The machine itself costs 600.00 plus the percentages on sales and cards. Companies such as BofA charge once a year on top of the regular fees $150.00 to protect you from fraud (which they can't even stop) and yes its mandatory. Paypal or Square seem to be the best options these days.
9. Fire Department - Yes even the Fire Department wants a piece. Starting last year you must do your own visual inspection and send them a check for 150! Basically if you don't they will come to your store and give you a million violations for wasting there time.

Something to watch out for is people who check fire extinguishers in business's. This is a huge scam where they come in without permission to inspect your extinguisher, get you a new one and bill you like 200 the following month. They have no right or permission to enter your business and jump all over you. You can simply tell them politely to get out. They dress like they are fire fighters but they are not.

* * *

The thread with the author's Q&A continues on Reddit.

[E. Pluribus Unum]

Because the big-government/big-corporate crony-fascist complex doesn't like competition.

They don't care if the pie gets smaller, they just want the whole pie.

[DonaldC]

He should leave California.

[dadfly]

bookmark

[Buckeye McFrog]

A friend of mine tried to open a small ice cream shop. The building inspector kept citing him for picayune plumbing code violations in his restrooms. Did not stop until he broke down and paid the bastard off.

[RayChuang88]

Like I said many times, until we massively reform business regulations and especially do a massive overhaul of our tax laws to reduce its burden on businesses, we’re not going to have a real economic recovery.

[lavaroise]

The progressist peomise or modernity. We have the scientific fountain of youth and wealth for all, and thus no one is going to fight anymore.

We all know communists want zero access to such if there ever was one. they are worse than the Opld Church in that respect.

[lavaroise]

Racket.

[lavaroise]

The progressist promise or modernity. We have the scientific fountain of youth and wealth for all, and thus no one is going to fight anymore.

We all know communists want zero access to such if there ever was one. they are worse than the Old Church in that respect.

[Ghost of SVR4]

Board of Equalization

Sounds like something straight out of Atlas Shrugged.

[Steve_Seattle]

There’s a small adult-care home on my (residential) street, and last summer they enlarged a ground-level wooden patio in the front yard, as a place where residents could sit outdoors in nice weather. The patio appeared to be well back from the property line, it was not an eyesore, but some local building inspector made them tear the whole thing down after it was finished. They did not replace it. I have often wondered what that was all about.

[Lady Heron]

It is everywhere. Try figuring out all the laws in trucking to get a trucking company started in Texas... it is horrible.

[Mears]

That happened to a friend of mine.

The wooden deck is considered a structure and has to follow the same rules as any addition to the home.

They put a flagstone patio in the same place and that was okay.

Nuts !!!!!!!!!!!

.

[Steve_Seattle]

"The wooden deck is considered a structure and has to follow the same rules as any addition to the home."

My neighbor thought it was some sort of permit issue. As I said, the patio was ground level and appeared to be well constructed. It did not have a roof. Maybe the owner did not know they needed a permit for such a thing, but forcing them to tear it down seemed like governmental bullying. Ok, make them pay for the permit after the fact, maybe issue a small penalty, but make them tear it down?

[Mears]

“Ok, make them pay for the permit after the fact, maybe issue a small penalty, but make them tear it down? “

---

My friend hadn’t built yet but the city said no a/c property lines.

Sad that your neighbors had to tear it down.

.

[rockinqsranch]

I don’t profess knowledge as to why that particular situation, but would venture by your description, and reflecting on experience in the past there was public access, and fire code anomaly involved with the patio. Probably was acceptable for private residential purpose, but not for profit nursing home situation.

[Sergio]

bkmk

[SES1066]

An item not included but very real is the fact that every business has at minimum 2 undisclosed creditors, the Federal and state Governments plus whatever municipality and local tax districts that there may be. Each one is #1 in line to be paid regardless of any profits and that does not include the unpaid time and effort devoted to satisfying regulatory requirements.

A particular favorite of mine is the fact that every employer is required not to discriminate for race, ethnicity, gender, sexual orientation BUT the US Census will ask the business owner those very same questions about who is employed (answers required to be accurate and promptly replied by law!) The response of “I don’t ask” is not acceptable!

For any and every business owner the concept of “overhead costs” is a constant and real concern and is especially acute for the weakly capitalized small business. For government bureaucrats, the cost of regulation is of absolutely no concern and a limit of 24 hours per day is no excuse for failing to be prompt in your paperwork.

[Steve_Seattle]

"I don’t profess knowledge as to why that particular situation, but would venture by your description, and reflecting on experience in the past there was public access, and fire code anomaly involved with the patio. Probably was acceptable for private residential purpose, but not for profit nursing home situation."

The house has been used as a nursing home for many years; this was not - at this time - a switch from a private residential use to a business use. And there was already a wood patio there; they were just rebuilding it a little bit larger.

[Steve_Seattle]

In some areas, it is illegal in real estate advertising to specify that a residence is “near a school” or “near a church,” as this is considered discriminatory. Madness!