Problem for Small Businesses

Problems Small Businesses Face

Abstract

Small businesses face economic uncertainty, overwhelming legislative regulations, and employee retention problems. Small Business represents more than 99 % of all employers and employ’s more than one half of the private sector. It also generates one half of the United States private G.D.P. ( PR Newswire, Oct 29, 2004 pNA).

In light of the significance of small business to the economy, it should be a grave concern when a third of small business owners rate the overall health of the United States economy as their biggest worry, rating higher than terrorism, the war on Iraq or healthcare costs. ( PR Newswire, July 12, 2004 pNA). Normally, during periods of economic sluggishness, it is small business that paves the way for a rebound. However, this trend has not appeared during the recent down turn in the economy which began in 2001. A major reason for small business failure to bolster the economy is a result of their inability to raise capital due to the decimation of the Small Business Administration's loans program ( Harpers Magazine, July 2004, V309 il 850 p79(2)). It appears that the very fuel that normally would stoke the economic furnace has been diluted through cost cutting measure as a result of a floundering economy. Such challenges will test the creativity and viability of small business.

Unfortunately, that creativity can be overwhelmed with the legislative regulations imposed by the local, state and federal agencies. According to Kenneth Howe of the San Francisco Chronicle, “The small business person must thread through a maze of more than two dozen regulatory procedures at the local, state and federal levels before opening

a business… And this task applies to the least regulated businesses” (1997. p1). Furthermore, John Kane of the Business Journal believes that “ legislators have no idea what kind of burden they’re imposing by passing conflicting labor laws, overly stringent