After reading the blog written yesterday by my Silkin Management Group fellow consultant Bill Hickey, called IS THIS A CLASSIC EXAMPLE OF “THE CART BEFORE THE HORSE”?, I began thinking more about some of the government policies being touted for small businesses to help the economic recovery. Yesterday’s Silkin blog pointed out how one of the latest proposals by the Obama Administration was to offer tax credits to small businesses as an incentive to hire new employees and discussed how that could be pointless if the business didn’t need or couldn’t afford new employees.
Today, I ran across three articles that I thought were very relevant to share with anyone reading this blog, whether a client of Silkin Management Group or not.
The first article, from Business Week entitled Obama Tax Credit May Not Cover IRA Cost, Business Group Says points out that another of the proposals by the Administration was to provide a $1000 tax credit for small businesses, but at the same time requires them to set up a mandatory retirement savings plan. The article points out how the cost of setting up such a plan is likely not even offset by the tax credit (assuming the business is even eligible for a tax credit).
The second article from the New York Times, entitled For Some A.R.C. Loan Borrowers, an Expensive Surprise Caps the Long Wait discusses how some small business are getting loans approved but it is taking literally months and months and months to receive the funds as the SBA administrative lines are so slow. So the financial help that the small businesses so sorely need is ridiculously slow in coming. Might this have something to do with slow business recovery?
The last article I ran across in Small Business Trends called A Million Startups that Offer Lasting Good Jobs was very interesting to read. Its premise had to do with a recent New York Times opinion article written by Tom Friedman, a writer I personally enjoy. Friedman’s article had to do with recommending to the President that he should make the centerpiece of his presidency mobilizing a million new start up companies that would provide long lasting jobs in areas that would help put America on the “cutting edge”. The author of the article in Small Business Trends, Scott Shane – a professor of Entrepreneurial Studies at Case Western University and author of 9 books – quickly went through the math of how many new companies it would take to end up with one million long lasting companies that provided good jobs. I won’t spoil the “surprise ending” for you, but suffice it to say that he walks through the logic of how and why it would take many many millions of start up companies to begin right away to end up with a million long lasting companies. Read the article, I think you’ll enjoy it.
All of this makes me wonder…do the people coming up with these ideas have any idea how the real world of small business works?
Dave McKevitt
Silkin Management Group Consultant
For more information about Silkin Management Group and/or Silkin Management Group’s services, visit our website at www.silkinmanagementgroup.com or email us at; info@silkinmanagementgroup.com


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