Big Government Tries To Meet Small Business Halfway

It’s never been easier to start up a commercial rabbit farm in
East Texas. Sandra Ellison is on the job to make sure of that.
Ellison manages the U.S. government’s first General Store for
Small Business in Houston, Texas, a storefront operation designed
to provide all the information and assistance necessary to help
people start and develop small businesses. The facility served an
average of 36 visitors a day after opening in July 1995 –
entrepreneurs setting up everything from the rabbit farm to
janitorial services – and its target is assisting 50 visitors
daily.

Six federal employees provide information about the Small
Business Administration, taxes and general services. They have
also been trained to help entrepreneurs obtain all the state and
local permits they need to operate. Backing them up are a library
and computer center with materials that can help owners develop
business plans, learn about financing and research market
opportunities. “In essence, this concept is one-stop shopping
under one roof,” Ellison explains.

Vice President Gore announced the General Store’s opening at
the 1995 White House Conference on Small Business. It is one of
many initiatives to make life easier for the private sector. “The
White House Conference made it very clear that much still needs
to be done,” says Jadine Nielsen of the SBA’s Office of Advocacy
in San Francisco. Delegates passed 60 final recommendations,
ranging from simple changes to regulatory overhauls. Among the
top priorities were:

More Money from More Places

Small businesses want greater access to capital from both private
and governmental sources. Delegates recommended lifting ceilings
and relaxing restrictions on loans from the SBA, banks and other
sources. They also asked Congress to change laws so retirement
funds can be invested directly in small firms, or used as
collateral to obtain debt financing.

In addition, delegates encouraged formation of a government-
sponsored but privately managed Venture Capital Marketing
Association, or “Vickie Mae,” which would operate like Fannie Mae
in funding small businesses.

Less Regulation and Paperwork

Delegates called on Congress to pass specific legislation that
would enable small business and OSHA to work together in a non-
adversarial, supportive relationship to attain public policy
safety goals.

They also urged that the Regulatory Flexibility Act be
extended to all federal agencies and amended to provide judicial
review. Before any new regulation could take effect, this law
would require a cost-benefit analysis, scientific-benefit
analysis and risk assessment.

Lifting Tax Burdens

Delegates urged Congress to recognize the legitimacy of an
independent contractor, and asked that the definition be
clarified and made less subjective, with more guidelines for
implementation.

They also felt small firms should be eligible for the same
tax benefits as large companies, such as deductibility of medical
insurance premiums, dependent care and other fringe benefits. In
addition, the tax law should be uniformly applied to all forms of
business so as to place large and small companies on a level
playing field.

Environmental Policy

Delegates encouraged a more rational approach to environmental
regulation based on assessing cost effectiveness and
environmental and health risks, and asked Congress to mandate
complete reviews of the Resource Conservation and Recovery Act,
Clean Water Act, Clean Air Act, Endangered Species Act and
National Environmental Policy Act.

They also recommended changes to Superfund legislation that
would eliminate retroactive and strict liability prior to January
1, 1987, and require realistic risk assessments and cost-benefit
analyses in gauging hazards at waste sites and establishing
cleanup standards.

High Technology in Private Hands

Delegates called for Congress and the executive branch to promote
rapid private sector development of the National/ Global
Information Infrastructure (NII/GII). Strong provisions should
also be made for protecting all intellectual property transmitted
over it.

To help with the development of technology, the delegates
felt the Small Business Innovation Research (SBIR) and Small
Business Technology Transfer (STTR) programs should be expanded,
and tax incentives created to encourage investment in small,
rapidly growing, innovative companies.

Better Access to Foreign Markets

Small businesses want a global “one-stop shopping” system that
will provide them with access to all government information and
resources available for international trade. Delegates also urged
Congress and the administration to create a pilot program that
assists private and public associations in helping their small
business members trade internationally.

Fair Competition

Delegates asked Congress to enact legislation that would prohibit
government agencies and tax- and antitrust-exempt organizations
from engaging in commercial activities that compete directly with
small business.

Better Health Care and Retirement

Small business wants sensible, affordable health care. Delegates
urged Congress to pass legislation that would:

* Create tax-deductible medical savings accounts.
* Allow the formation of voluntary competitive health insurance
purchasing cooperatives.
* Eliminate discriminatory health insurance practices.
* Reform medical malpractice rules.
* Provide 100 percent deductibility for health care costs.

Delegates also asked for repeals of disincentives and burdensome
restrictions on qualified retirement plans and IRAs to encourage
adequate retirement savings and capital accumulation.

Procurement

Delegates encouraged the government to increase the opportunities
for all small businesses to equitably participate in federal
procurement.

Toby Malichi
Malichi Diversified, Ltd.
Indianapolis, Indiana

Rising through the ranks at General Motors over the course of
eight years, Toby Malichi eventually managed a work force of more
than 300 people in 14 Chevrolet dealerships that generated in
excess of $50 million in annual sales. Then he suffered an
accident that burned 45 percent of his body, and – during his
year-long recovery period – had ample time to reflect.

“I recognized the impact Japanese imports were having on the
American automotive industry,” Malichi explains, “and saw what
happened to tough, intelligent, shrewd men who were subsequently
displaced – they crumbled. I felt I could fill a niche by
motivating and training people, and helping them create a sense
of empowerment, develop their own skills, and make themselves
more salable.”

At the same time, Malichi – who had wanted to be an
entrepreneur since he was very young – formed a trade development
company (Indianapolis, Indiana-based Malichi Diversified, Ltd.)
that identifies and represents both domestic and foreign
companies that are searching for alternative markets, agent
representation and business relationships. “Put me in any
situation, and I’ll come out knowing who you want to meet,” he
claims with a broad smile.

A small business advocate since 1983 who is frequently asked
to testify before congressional committees and who served as an
official spokesperson during the passage of NAFTA and GATT,
Malichi also serves on the Board of Directors of the U.S. Chamber
of Commerce, and is a member of its International Policy
Committee. He believes that “legislators are beginning to treat
small business not as a stepchild, but more seriously.” He
attended the 1995 White House Conference as an appointed delegate
because “I wanted to let the Administration and Congress know how
we think.

“It was good to see so many people share the same passion
and desires,” says Malichi in retrospect. “We’re seeing a whole
new group of entrepreneurs coming into the political arena and
who are now out there fighting the good fight. I would urge other
small business owners to get involved in issues that pertain to
their operations (from environmental policy to taxation), and
have their voices heard as well. We can’t win without a team.”


Posted by on February 21, 1999