Small Business is Part of the 99%

Occupiers, take heed!

Small businesses are are part of the 99%. As entities, we have not received corporate tax subsidies, large corporate tax breaks, or any kind of hand out. When we get under attack, generally nobody cares because we are just "small potatoes". Yet, virtually every person who works with small businesses, other than other small or even to some extent, medium sized business, has no clue as to how the small business sector is under attack from all corners of society.

Many occupiers associate small business as the petite bourgousie, or a miniaturized version of the capitalists they all hate. While most small business owners are capitalists, they have more in common with the 99% than many realize. After all, when was the last time YOU were given a hand out from the government to help your business grow?

I want to talk about the many things that get done to us as small business from various corners of society, and then you, the reader, you can judge whether it is even worth it anymore to set up shop and pretend to be some kind of merchant, entrepreneur, practitioner, or whatever, that avails its goods and services to the public. Is it really worth it? Why do people even bother? It is time people know the truth about how most small businesses experience life as a small business owner:

1. Through Their Customers:

While most customers are good and are a joy to have around, there is the small percentage that create 90% of the problems that small businesses often complain about. Enough of these customers at the wrong time can make life for a business owner, entrepreneur, solo practitioner, or whatever, miserable. These are people that come into the business, spell out their expectations and are eager to pay when asked, but shortly thereafter, complain about the amount of money the goods or services are costing (while, of course, ignoring the fact it costs money to produce or to provide goods and services). These are the types of customers that string people along, make changes to their order or instructions, and expect instant results. When things do not turn out the exact way they envision after the 149th day, they blame the proprietor. After all, the proprietor is the only one that was providing these goods or services, right? No thought is given that the customer may be at least partly to blame, as they failed to provide changes in writing, or listened to the provider to see if their new choice is even possible or financially feasible on the budget they seemed to assign to the project. Despite warnings that things may not turn out very well if we push this to whatever the person is asking, we get blamed anyways. These people typically underpay and know it too, and act shocked when they are asked for additional funds to put the changes necessary in their work.

2. Another type of customer is the rubber cheque writer. They can't seem to write cheques that stick, and then they seem to wonder why services stop or goods are not shipped, once the bounced cheque is discovered. People can't work for nothing. I am sorry. If you still want the product or the service ordered, go back and pay in cash or money order and add whatever administrative charge that might apply. After all, it is a pain in the neck to track bounced cheques, to contact the cheque writer and wait for re-issue. In the meantime, the entrepreneur, business owner, practitioner or whatever, is not earning any money from you, so why would they continue doing anything for you, until the money is made up? There is a small sub group of rubber cheque writers that are truly fraudulent. Most of them that I met are truly honest people who made a mistake, and will correct it, particularly if they are also small business people, or once were. However, a very small sub-group of these people will do this on purpose. They do this by marking their project as urgent. Perhaps, a defence has to be filed by tomorrow morning, or the clay model has to be delivered by the end of next week for the showing of their home. Many business owners, entrepreneurs and practitioners will accommodate urgent requests, sometimes by asking for a little more money so they can afford to set aside other paying work to accommodate this job which has to be done very quickly. So, the cheque gets written, and then deposited, only for the business owner, entrepreneur or practitioner to find out a few days later, it bounced. My question to these people is, "How fast would you complain about your employer to the Ministry of Labour if your weekly or biweekly pay cheque bounced?" Why should business owners be any more tolerant? I am myself moving to a 'no personal cheques' policy, which leaves some people out, but too bad. I have to eat too, and can't be bothered chasing cheque bouncers around town.

3. Another "ace" type customer is those that like to waste your time with frivolous and vexatious tasks, and then complain loudly when you won't comply. I know one fellow that owned a computer store that was put on a wild goose chase by a customer who swore up and down he had a certain part, and that this part was essential to make his machine run better, and when the business owner went back to the customer to explain there was no such part, or that it would have to be purchased from India, the customer immediately filed a Better Business Bureau complaint and threatened to sue the business. Nobody needs these "ace" customers, as they not only waste your time with their original requests, they continue to waste it when you try to explain why their request is either going to be very expensive or difficult to fill. I get people in my office seeking to sue on this kind of basis, which I tell them they have no case.

4. The next category of customer are the chintzers or the skinflints. These are people that also come in, often in an urgent situation, and waste your time, only to haggle with your fees. If you are offering a professional service, you are not a flea market or a used car dealership where haggling is expected. There are various ways in which these people act. In one example, the fellow went out of my office under the guise of obtaining the funds to pay his retainer, only to supposedly phone a few friends who allegedly told him the fees were too high and excessive. When I told him I do not bill by opinion poll, he became upset, and said that a "friend" of his who happened to be a lawyer said it was too high. The only solution for somebody like him is to tell him if his lawyer is going to charge him less, go there. I know they are not going to get a better deal over there, as many times chintzers and skinflints have returned to my office, only to pay the fee that I asked to begin with, likely after discovering they can't really get a "deal". I wouldn't recommend shopping for professional services on price alone anyways. I've seen the results of that as well, as many of these cases do turn up in my office with far too many corners cut, work done without permits, without proper license, etc.

5. The next kind of customer is the kind that knows more than you do about your product or service. These people are willing to pay you to do the work, but do not expect to accept any of your expert advice. They argue with you at every stage of the job. In my view, if they know so much, return the file to them and tell them to finish it on their own. They hate this. These are also the kinds of people who like to file complaints, but if they knew so much about the job, why did they bother with you anyways? I had one guy like that a few years back, who became angry with me because I refused to include the former vehicle owner in a suit against a dealer. The tort was obviously originating from the dealer, and they also have insurance to cover these kinds of issues, but he wanted me to go after some poor eighty year old lady, which was not going to happen. Fortunately, I managed to obtain a decent settlement from the dealer. Despite this, this guy was still fuming because the previous owner "got off scott free".

6. There are also the customers that want your product or service, but do not have the money to pay. In my profession, we are supposed to try to provide access to legal services when we can, but the difficulty is, many of these people will not pay, even a bit at a time. In my opinion, they should be seeking legal services, or other services from a publicly funded agency where people who are on salary are available to assist in these cases. I am not on salary. I cannot afford to work for free, or to wait for long stretches for my payments. Some people seem to forget that self employed people do not get salaries, or any other kind of "income security", for lack of a better term. They can't afford to give away a lot of their time or their products. People hear about "free consultations" provided by some boutique law firms, and then assume every last lawyer or paralegal is somehow obligated by law to give "free consultations". Sure, I can give free consultations, but somebody at the end of the day is going to have to pay my bills. Those at the boutique law firms that do this are usually on some form of salary, or are earning very good money already that they can afford to give away some of it for "free". This is the same as "free samples" in a department store. They allow you to take one or two to try, but if you go there and grab a whole handful, this would not be appreciated by the store. The real reason I no longer provide free consultations is because too many people came, picked my brain, and then went across the street to see somebody else for another "free consultation", and so on.

In addition to customers, there are abuses by government and regulators:

1. Just about every business has some type of regulation. The bigger you are, the more government regulations you need to worry about. However, professional practices of even one person are regulated to the same degree that large firms of the same type of professionals are, which needs to be reviewed. Regulations are good for the public, and to some extent, good for the business too, so they can adhere to known standards and become the best they can be. However, there is such a thing as over-regulation. I hear about it from bars that move two doors down and have to re-apply and wait for months for their liquor license to come through. I hear about various businesses trying to set up innovative projects and design taking months, only to have the city turn them down on some minor technicality. I have seen businesses having to rip entire fire alarm systems out and replace them, simply because they did not get a permit to install the first set. I have seen businesses being forced to take their signs down because they were too close to the road, or they were too big. These things are all part of starting a business. You have to know all the by-laws, affected regulations, and so forth, before you open your doors ... even before you go inside and start refinishing your property for the business you intend to run. Yes, I like to know that my food is safe, my water is tested, and that my house is not going to cave in on me, but do we really need all of those other regulations? I think it is time that small businesses actually have the opportunity to tell the government how much certain regulations, though not all, are hurting their bottom line.

2. Just as I like my water to be tested, my food to be safe, and the streets safe to walk at night, I also appreciate having employment standards. However, I have found ways these standards can be abused by employees, as well as by employers. I have witnessed situations where an employee quits their job, then claims the employer harassed them or threatened them, when no such thing happened. Bringing the regulators in creates an onerous environment where the employer can feel victimized. Too many times, certain people are taken at their word, when in fact an examination of the employer's overall practices would deny such harassment or discrimination. This sort of thing makes great business for people like me to help employers with such things as documentation, and follow through, but to a small employer this can become more of an annoyance. I know there are many employers out there that don't follow the law, but to me I am witnessing more aggravation from the other side as well.

3. Environmental Regulations:

Another common vigilante attack on small business is so called environmental regulations. Of course, I want the food that I buy to be safe, free of pesticides, etc. I want the water that I drink to be as pure as possible, instead of a complicated chemical formula that can fill a Bible. I want garbage and refuse dealt with in a way that can be diverted from landfill, where possible, and the places where I do business to be clean and healthy. However, there are vigilante activists who are trying very hard to protect that tree, that green space, that wetland, that trail, or even that brownfield, and they will try to fight any business that can take over this land, even if the business itself takes steps to protect these things. Facilities like waste management plants, gas fired plants, energy companies, nuclear plants and similar structures are often targets of protests. Many environmentalists are proponents of alternative forms of energy. So am I. However, time needs to pass to enable these alternatives to develop in a cost effective fashion. Because the average person does not want to pay higher hydro costs, most feel that small businesses can therefore shoulder more of these costs. Certain types of businesses have gone under in the past few years since environmental alternatives have been promoted, especially at the substantial cost that they have. A happier balance needs to be found.

There are also private regulators that can create additional costs to small businesses:

1. While I support regulation by the Law Society for practicing lawyers and paralegals, additional requirements for each member have been added during the years, which increases the costs of maintaining a practice. For example, we need to carry insurance, pay Law Society dues (which have gone up each year since I joined), carry on business in a particular manner (which involves added technology, added time in accounting tasks, added time in filing tasks), and continuing education. All of these things are good things, and most of it is in place to help maintain the excellence of service and professionalism of each member of the Law Society. However, regulation has brought with it substantial costs to my office, which means I have to charge my clients more for my services than I once was able to. The discussion has now turned away from how we protect the public, to how we can provide the public with accessible, affordable legal services. In addition, training and support to the smaller firms is badly needed, as some of the requirements can be time consuming for sole practitioners and small firms (under five persons), while larger firms have the resources to hire staff to wholly manage many of these requirements.

2. Consumer Protection Laws:

These are very broad and often industry specific regulations. We have laws against curbsiders, which are allegedly people selling vehicles without a dealer's license. Regulators scan Auto Trader, Kijiji and the like, to find people selling used cars, and they often phone to make inquiries. Often times, a curbsider gives it away by asking, "Which one?" The fines are heavy for this kind of thing. Jail terms can even be handed out. Yes, there are industry scum out there that need to be hung out to dry, but this law is catching some people that have no intentions of defrauding or hurting anyone. There are taxi regulations, which are usually set by one's municipality including the definition of a "taxi". Advertising a ride sharing service can readily capture some people not intended to be captured under the taxi regulations. How do municipalities tell the difference between a ride share service, which is primarily volunteer (although the person sharing the ride pays the driver for gas), and an illegal taxi service? Ride sharing once used to be an acceptable practice. You book your travel plans on a bulletin board, and somebody else who happens to be going that way contacts you and offers to share the ride. The business PickUpPal.Com got into some hot water recently because they were advertising ride sharing services from one city to another, until the bus companies found out and took them to the Highway Transportation Board for providing an "illegal service". Land use is also affected by regulation. Right now, a gentleman who owns property in the country had decided to use part of his land for an archery club, until the Conservation Authority decided they did not like the idea. To the best of my knowledge, this landowner is still fighting this in court. I wonder somehow what kind of harm this man was doing by offering the use of his own land to a popular sporting activity, which included charitable contributions for the brain injured to participate.

All of these things and more contribute to the hardship felt by many small businesses, and why so many of them end up shutting down, or restricting their practices. This is in addition to the attitudes of some people that small business owners are wealthy, and are believed to be able to take advantage of the same largesse big companies are able to. None of this true. The average small business owner earns 30% less in income than their salaried counterparts doing the same thing. Retail business owners put up with theft, robbery, fraud and breakage. This comes out of the owner's pockets. Service businesses put up with chintzes, skinflints, rubber cheques, chronic complainers, know-it-alls, etc. The price of dealing with these people comes from the regular paying customers' and the owners' pockets.

Nobody thinks about when they try to haggle a price down from a small business owner. Are you also going to offer to haggle the price of their insurance, their memberships, their staff salaries, etc.? These people pay the same expenses, regardless of how much money they take in. By haggling or thinking they can drop their prices, you are taking the food out of their families' mouths. Most small businesses are locally owned and staff are local residents. Yet, many of the above actions done by customers, government, regulators and the like, lead to higher costs for them and for the rest of us. It may also put many people out of business. There are many other issues that are going on that also reduce the chances of a small business surviving. In my world, I shop as much as I can at locally owned small businesses, and I pay my bill when due. I do not haggle or try to get the owner to cut the bill because I know they need the money. I also do not make frivolous complaints to, or about, the business. If I have a concern, I take it directly to the business and work it out with the owner, rather than waste their time or mine with a formal complaint (unless it was of a very serious nature that has remained unaddressed, but to tell you how rare this is, I only had to do that twice in my life). I follow the Golden Rule. I treat others as I would want to be treated, but unfortunately, as a small business owner/professional practitioner, I have felt the impact of others that do not follow the Golden Rule, do not appreciate the time or effort in putting out a product or a service, or the value of my work. I can only help but wonder if these people had ever themselves been self employed. I bet not.

Your thoughts?

POVERTY IS BAD FOR BUSINESS!!!

Every once in awhile, the new Right through its various associations and accomplices chooses to attack government for the costs it generates. Their only solution it appears is to lower taxes, ease the burden on the upper classes to "encourage" investment. However, these same organizations are not present when it comes to how the government is going to cover the added costs of poverty that seems to almost always follow huge tax decreases for the well-heeled. The well-heeled just turn to a 'law and order' agenda and wonder why people are "going crazy" all of a sudden and how society is no longer safe. People even in small towns are interviewed and they tell the media how they used to keep their doors unlocked and can longer do so.

In my own community, while the rate of homicide and violent crimes seem to be decreasing, the rate for property-related and fraud-related crimes seems to be on the rise. We are constantly hearing about how debit machines are getting "rigged" to copy valuable information from people's magnetic strip on their cards and somehow high tech keypads pick up the P.I.N. numbers that are associated with the cards. The new fraudsters then go home to make copies of the unaware victims' debt cards and clean out their bank accounts. Home repair "contractors" go door to door to sign up unsuspecting customers who will give the "repair person" a down-payment who will then disappear with their money, never to return again to actually carry out the repairs. Telephone "fraudsters" will call and claim to represent a legitimate company or charity and ask for your credit card information to "upgrade" your existing cable, telephone or utility service that you currently subscribe to. Others with less cunning and less resources hang out on street corners to ask for spare change to take a bus or to buy a coffee. These incidents have risen geometrically over the past 20 years; however, our taxpayer federations continue to cry out how much we pay in taxes and how many people are "abusing" social services. They fail to see the connections I see with the rising rate of non-violent crimes involving property and fraud.

I talk to many of the business owners I know well in the downtown of my community. They feel bad about it, but they say if it were not for the drug dealers in the area, they'd probably be out of business. Legitimate consumers are decreasing in population, while those who are obtaining their profits through crime are increasing, it seems. We all complain that "somebody" needs to do something to "crack down" on fraud and so-called illegitimate claims for legitimate avenues, such as insurance cases, welfare benefits, worker's compensation, etc. At the same time, I am seeing a sharp increase in the number of legitimate claimants appearing at my office who have been unfairly robbed of their claims and are now losing their homes, businesses and families because of this. Where does this end? I know members of the general public have no clue what a legitimate claimant has to go through in order to claim what is legitimately theirs by law. Webpages, discussion groups and public forums are filled to the brim with people that think that "90% or more" of those claiming disability for example are perfectly able to work, but just don't want to. Others advocate that people with disabilities should be paid less because the writers are under the impression that disabled persons are less capable of contributing than a "regular person". Others complain of increased taxes going to "immigrants, welfare fraud and scammers", when in fact none of these people EVER personally experienced what they claim the "others" they speak of either experienced or claimed to be experiencing. The taxpayer's federations want more money to spend on foreign investments, foreign vacations and foreign products, because these particular individuals ALREADY have more than enough to spend on domestic products and services, so they just want to get greedy and get more.

A report called "Growing Gap" has been published by the Canadian Centre for Policy Alternatives, which shows that the top 10% of the income bracket (or those most likely to complain about so-called higher taxes) actually gained more than 16% in terms of real growth of net incomes over the past twenty years. Those in the so-called "middle classes", if there is such a thing anymore, have not gained much, except possibly a net gain of $53 per annum in real money (constant $2005 dollar) over the past twenty years. The lowest income brackets actually lost almost 20% of their real income over the past twenty years (and this is working low-income ... those forced to rely on government transfer programs are argued to have lost more than 30% over the past 20 years). This is not good enough apparently for those that want further taxes shaved off their annual tax bill ... they don't see any connection to how the suffering of the very poor can very well be connected to more taxes in the future for all of us (including the well-heeled that complain the loudest) and less property security.

All one has to do is sit in a bar or a doughnut shop or a drop-in centre to listen to what people are forced to do, the choices they are being forced to make -- one of course can always choose the honest path, but it turns out that if one does so, they will only fall further behind. If you want a clearer idea about how honesty destroys any chances of getting ahead, read "Why is it so tough to get ahead?" by John Stapleton and his associates at the Metcalf Foundation, which can be downloaded from here. People in subsidized housing are shot down the minute they declare earnings in excess of $100 a month; people on social assistance are shot down by 50% for any dollar they earn whatsoever; people whose annual income exceeds $20.000 a year even by a little bit, begin to lose access to subsidized housing and many other child-related benefits. Those that do not want to lose have to cheat to win, thus which is why we have laws to catch the so-called "scammers". Of course, Kimberly Rogers, of Sudbury, Ontario, who "cheated" welfare in order to get an education and get off the system eventually, was convicted of scamming welfare, because she was not permitted to collect welfare AND go to school. A whole inquest and dozens of recommendations later, nothing changed. Our taxpayers' coalitions and uneducated right continue to clamour on for more and deeper cuts, so they can afford two or even three SUVs and Florida vacations, while "other people" starve.

The reality of the matter is that we are ALL paying for poverty and allowing it to continue. The upper classes may not feel it as much, as most of their investments and concerns are not domestic. However, for everybody else, ranging from the barber, the baker and the candlestick-maker, they have all noticed the impact of increased and tolerated poverty in the past twenty years. Why?

The facts:

1. Poor people do not go to movies, rent videos, buy new clothing, buy jewellery, or eat out.

The more poor people there are, the less people there are in a community that is doing all of those things. This affects small business. Wealthy people who are now allowed to pay less taxes are not going to buy MORE domestic products, because they already have what they need. Why would a wealthy family, for example, go out and buy MORE groceries than they need just because they have more 'disposable' income? Those who are earning less, or getting less on their welfare incomes, are not spending as much, because the cost of their housing is crowding out any other income that would normally be used on groceries, clothing, transportation, eating out, etc.

2. Poor people have poorer health outcomes and are subject to higher health care costs.

One statistic that is particularly shocking is that poor people have four times as much chance of becoming diabetic than those of middle and upper income brackets, even when weight is factored in. Complications from diabetes, such as amputations, heart disease, blindness and high blood pressure are at least twice as likely in low-income diabetics than in diabetics from other social classes. This is even after access to medical plans and universal health care in Canada is accounted for. The poor are twice as likely to develop irreversible heart conditions as others. They are more than three times as likely to suffer from nosocomial (or hospital-based) infections than other people and are more likely to be put into nursing homes, where care is less than optimal. Some people have argued this is almost a deliberate strategy to save money, but most of these people do not die right away, but end up costing hundreds of thousands of more dollars to the system -- even the U.S.-based health care system -- than middle and upper class persons do.

3. Poor families are more likely to be a target of child protection services.

How many of you heard of a wealthy family having their children apprehended from them for reasons of supposed neglect? If this happens at all, it is rare. The wealthy have good lawyers and are also able to hide any neglect they might impose if they were prone to this. The statistics also show that 87% of families that have children's aid involved with them on an ongoing basis are low-income or working class families. The poor are more likely to have a child apprehended from them, usually on the basis of 'environmental conditions'. Perhaps, their teachers reported seeing them without a proper winter coat or regularly coming to school without lunches. Explored further, there are always skeletons that can be exposed in ANY family, but wealthy families do not attract this kind of attention. At a cost of $2,300 per month per child, we as taxpayers need to ask good questions about the accountability of the child protection system and whether or not it is being operated on the basis of social class and culture, as opposed to actual signs of abuse and neglect.

4. Poverty breeds crime.

Middle and upper income people believe that welfare is "prone" to abuse and that because of this, tighter controls need to be placed on recipients. Some even advocate food stamps and direct-pay for rental housing (which if studies of these policies were examined would learn that social class becomes caste-like and stratification between classes becomes impossible for most). What happens to people who have little in a society that seems to have plenty is that some of the poor will attempt to acquire what they feel they deserve through illegal or illicit means ,,, people turn to prostitution, drug dealing, small time theft rings, fraud, etc. to supplement their meagre incomes. Who are these people defrauding? You and me. You and I are the people that answer our phones to "charities" asking for our credit card numbers. You and I use "debit machines" where fraudsters are learning more and more sophisticated skills in skimming. You are I are working in the retail business that is becoming more and more subject to shoplifters and outright robberies. You and I are having to lock our doors, install security systems and take taxis home in order to protect ourselves from the 'seedy' side of our population.

While criminals may have a later motive for drug purchases and addiction, they almost always started with a motive of poverty. They have to pay their rent. They have to eat. They have to earn an income. They have to pay child support. Around them are commercials for fancy home renovations, brand new computerized cars, fancy cell phones, computers and other gadgets that "the rest" of society can afford without having to turn to crime. We think nothing of replacing our car every two or three years, replacing a computer every four years and buying new clothes to attend the latest gala function or wedding of a family or friend. People living in poverty cannot do these things. Some of them suffer because they do not want to risk committing a crime; others become less shy about knocking off the nearest variety store to get what they want ... or get engaged in the drug trade. In seedy neighbourhoods, the drug trade is open and available and for young kids that get nothing at home, the opportunity to drive a nice car, wear expensive jewellery and dress in fashionable clothing is too great. What are we doing as a society other than worsening the situation by sending out non-verbal signals that people of low-incomes are somehow less deserving of a modern life?

Mental health is a major loser as well in all this throw for show societal expectations among us. People who live in subsidized housing and CANNOT get ahead because of housing rules are bound to break them. People who cannot get ahead due to stringent treatment of earnings on welfare are bound to break them. Think about it. If you were forced to pay 80% of your income on taxes today, only to pay a bit more as your income goes up ... will you be less likely to claim your extra income? The rate of tax evasion and "cheating" on income taxes outnumbers the number of people who cheat on welfare by 10 to 1, not because welfare recipients are more honest, but because the dogs are on them all the time! Unfortunately, for many -- NOT claiming their income while on welfare or in subsidized housing is probably the only way they will break the cycle of poverty. This certainly needs to be looked at by the government folks assigned to look into poverty, but even doing this is not going to get poor people to spend more or make them healthier.

This is a very complex situation that needs more of an examination than the cursory one that is given today. Unfortunately, it is the food banks, the charities and the homeless shelters, as well as certain public services that benefit from the presence of the poor ... and these organizations need to be dealt with, not put in charge of any anti-poverty strategy. There are staffers of food banks and homeless shelters making $80,000 and above - why would they want to truly see poverty ended? Wouldn't there be a better incentive by government for example to fund people on the basis of poverty-reduction, as opposed to continuation of the same old - same old? I am not saying many of these people do not have a conscience or are not concerned, but their very livelihoods and thus, their financial interests are geared toward the rapid increase of poverty today!

Poverty is bad for business because poor people do not spend. Poverty is bad for business because poor people cost more in terms of health care, corrections, social services and related expenses. Businesses do not benefit from having to pay more taxes to cover the costs of these things. Poverty is bad for business because there will soon be less and less places to safely locate one's business without having to put up with panhandlers and drug dealers outside your front door. Because we ALL know inherently this is true, I am calling on ALL OF YOU to push the government into developing a serious -- and not superficial or politically smooth sounding plan -- to not only reduce, but to eliminate poverty altogether! It should be considered the scourge of a modern society to even accept the presence of poverty amidst our so-called wealth!

Your thoughts?