Thursday, December 16, 2010

The War on Small Businesses

Yesterday I showed you some of the ways big businesses actually make a profit off taxes that just cost the small businessman money in accounting paperwork. Today I'm going to show you some of the more subtle ways the small business is being put out of business. I am not talking the overt methods like Wartmart, but the very small things that keep you out of business.
I have been fighting with the County for 7 years, trying to put up a sign to no avail even though a previous sign was in the same location. The only change would be the wording.This is because the county passed an ordinance that prevents anyone but a licensed sign company from putting a sign up. This doesn't affect the big box store who has no intention of running out with a hammer and nails and painting their own sign. It only affects the small business that doesn't have a thousand dollars to waste hiring a sign company with NO GUARANTEE they will be able to do the job. I have lost $700.00 to sign companies when they gave up fighting with the County.
Now, take the story of my friend whose life long dream as been to open a nursery. He was doing well out of his backyard until guess who showed up: ZONING NAZIS. As a result he needed to move all his plants out, rent a location, get licenses and so forth. To do this, he needed a landscaping contract that was coming up with the city. He placed what he considered to be a rock bottom bid and lost to another nursery. When he had a friend in City Hall find out what the company bid, he discovered the bid did not even cover the cost of the potting soil to grow the plants let alone the labor to put them in the ground. Thus, I was sent to find out what was going on. My first stop was the wholesale garden supply where I knew I could wheedle information out of the owner. Hey, pretty young red head in a room full of old know I made a good spy. The answer I got was simple. All the nurseries were owned by accounting firms taking a tax loss on them. So they were bidding below cost to take a loss on the jobs to get a tax deduction for all the big bucks they were making off small businesses handling the paperwork no one but an accountant could understand! I think that is a double screw job.
A few years later, I went out to rent a location for my store. After I was turned down at multiple locations, my friend decided to find out if the rejection was because of the type of store or something else. So, she began to call the same Realtors planning to open a "dress boutique". Could you find a more benign business? She got the same turn down and finally caught one owner and threatened to sue him for discriminating against female owned businesses. Well, it was enough to put the fear of something in him and he blurted out the real reason I could not rent a bay around town even though there were plenty open. As long as the occupancy rate was at 40%, he could take a tax loss on the shopping center without drawing the attention of the IRS. This is the same reason why in September I was offered 3 months free rent at a Mall, no lease, no obligation, just so it would look like the Mall was occupied and then in January my store would be evicted and they would start all over with the tax scam.
All these scams are putting the legitimate small business out of business or preventing it from getting into business. Between the tax scams, the licensing requirements that often require a lawyer to sue the city to get your business license (now called a business tax in Broward County), the small local business is an endangered species even though its income stays in the community whereas your big box stores are shipping the majority of their income overseas.....This how we get a huge deficit.

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