Wall Street Journal – Professor Pat Dickson says Presidential Candidates Missed Opportunity to Connect with Small Business Owners

10.25.2012 Article, Faculty News

Reposted from WallStreet Journal | by Sarah E. Needleman

For Small Businesses, Presidential Candidates' Pitches Come Up Short

You might think taxes are the biggest issue for small-business voters, with all the sparring between President Barack Obama and Republican challengerMitt Romney over who should get an extension of the Bush-era tax cuts.

But business owners rank the differences in the candidates' positions on health care, the economy and access to capital as more important than their positions on taxes, according to a Wall Street Journal/Vistage Small Business CEO survey.

This month's poll of 797 small-business owners and bosses, to be released Thursday, shows a gaping hole in campaign discussions about small business.

Mr. Obama has said the health law will make it easier for smaller companies to offer coverage to their employees at an affordable price. Mr. Romney has said that, if elected, he will repeal Mr. Obama's Affordable Care Act and will allow small employers and individuals to form purchasing pools and buy insurance across state lines.

Steve Dininno
"I just haven't heard much dialogue on the true impact to small business and the resultant cost on the economy for this huge paradigm shift in who is paying for insurance," says the 60-year-old Mr. Thomas, a Republican who plans to vote for Mr. Romney.

He figures that if all of his 440 full-time workers opt to go on his firm's health plan when the individual mandate takes effect in 2014, he will need to pay $720,000 more a year in insurance premiums. Currently, half his workers don't participate in the plan.

Small businesses commonly rely on loans and credit from banks and other lending institutions to buy equipment, hire workers and expand in other ways. But only about a third of the small firms that sought loans in the first half of this year got them, compared with three-quarters of big companies, according to survey data from Pepperdine University's Graziadio School of Business and Management and Dun & Bradstreet Credibility Corp.

Small Businesses Fret About Access to Capital
In the debates, Mr. Obama focused on his track record of improving borrowing conditions for small businesses, but didn't offer any plans for increasing their access to capital.

One of his administration's biggest efforts, a $30 billion small-business lending fund, has gone largely untouched. Only $4 billion was dispersed to community banks, which, in turn, increased small-business loans by just $6.7 billion, according to the Treasury Department.

Nor did Mr. Romney offer details of how he would help more entrepreneurs obtain financing. Instead, he discussed how he would keep more money in their pockets, such as by reducing and simplifying taxes, replacing the Affordable Care Act with what he said would be more cost-effective health-care reform and decreasing federal regulation.

The candidates "blew an opportunity to reach" small-business owners "by not providing specific plans for how they might improve access to capital for small businesses," says Pat Dickson, associate professor of strategy and entrepreneurship at Wake Forest University in Winston-Salem, N.C. "Without capital, you can't grow."

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