Taxes

The tax man cometh. Where shall he find you? At the front door welcoming him in? In the kitchen drinking Chevas Regal from the bottle? Under the bed? I know where I'll be but what about you?

Small businesses may get a good break this year from the tax man. Actually, if president Elect Barack Obama's stimulus plan (reportedly in the trillions) passes, then maybe it's safe to say that everyone, including rich Americans, will get some help and breaks from the tax man this year. For sure, it's not as if anybody, except maybe for personal injury lawyers, psychiatrists and heart surgeons made any money this year. Billionaires around the world are literally killing themselves. I worry sometimes about people like the Trumpster. But he's the ultimate comeback kid. And ultimately, I think he understand it's just money. A thing. A commodity. It's not your life. It is not you....same goes for us little small folks, by the way.

Doing the taxes should be fun this year. Many small business will have massive losses so that means no taxes. There are bound to be a lot of expenses, exemptions and credits that will even make this more fun. So fear not. Do you do the taxes yourself or do you get an accountant? I'm thinking that no matter what you've done in the past, this is a good year to hire an accountant.

Obama

Obama pulled off a stunning and emotional win tonight to become the 44th President (elect) of the United States of America. The historical significance of his win cannot be over-stated. Many are jubilant in the streets of America, regardless of their color, national origin, orientation, religion or gender.

What will Obama mean for small business? Only time will tell, but if what he said during the campaign holds up, small business can expect less taxes (this will please Joe the Plumber), assistance with health care (this will please Hillary Clinton), and possibly increased funding opportunities. According to the Wall Street Journal, "SBA-Backed Loans have dried up and the substantial decline in Small Business Administration-backed lending is fueling criticism that the federal government isn't doing enough to help small businesses that are in dire need of cash." Surely, this will change with an Obama adminstration.

The President Elect has made it clear that if a business makes less than $250,000 that business will not get a tax increase. So small businesses should like that since only about 5% of small business generate revenues anywhere close to $250,000 per year.

The Obama administration will probably have one of the most developed green strategies of any president in recent memory. Big on his agenda seems to be the issue of alternative energies and reducing the country's dependence on foreign oil. This will also impact small businesses just like it will impact multinational corporations with global geopolitical influence.

Obama's style has been a conciliatory one throughout this campaign. If that continues, that is going to be very good for America and for America's small businesses. By working in a non-partisan way with the Congress, Obama will surely get more of his agendas (including those that pertain to small businesses) across than if he doesn't.

Obama supports young people and he supports education. Young people are one of the most experimental, innovative and business-minded demographic in the U.S. today. They are the computer geeks, the IT gods, the next Sergey and Larry. And Obama owes a big debt to young people in America. They voted for him resoundingly in this election. So Obama is likely to support more grants to assist these youthful friends, to support bills that are geared to assisting small businesses, to support educational and financial assistance for not only college bound students, but those young people who are involved in a trade as well.

As a community organizer, Obama is sure to know the power of transforming neighborhoods, and revitalizing towns by bringing new businesses to these areas. New businesses can mean jobs for the young, and the elderly too. New businesses can simply restore a sense of community to areas that are hit by the recession. An Obama administration is likely to do all in its power to support these community initiatives.

There are more ways in which an Obama Administration will impact small businesses. Overall, I would say he will be a net gain for small businesses in America.

Politics

What, or who, is not impacted by politics? Arguably, even the wine you drink is a decanter of politics going down your throat, gulp by gulp. In his book, Wine Politics, Tyler Colman makes the argument that “government, environmentalists, mobsters and critics influence the wine we drink.” It should not come as a big surprise that the wine business is mired in politics. Wine making in the U.S. alone is a $25 billion dollar industry. Globally, the wine industry is in the region of $240 billion dollars with the Chinese market rallying hard for global dominance in a decade or so. That is why there are so many stakeholders. With the kind of cash flow involved, how could it ever be free from the influences of “politicians?”

Small businesses are not free from the influences of politicians either. Small business owners have to be very mindful of their politics, as a matter of fact. In making the argument that small businesses have to mind their politics, I am not really talking about who you will vote for in the next presidential elections, although, that is a part of it. After all, both Barack Obama and John McCain indicate that they have strong ideas of the roll small businesses will play in the economy, the extent to which they will be taxed, and the amount of federal aid they can expect in the years to come. In this context, a small business owner’s politics might be influenced by a candidate’s take on such things as taxes, immigration, healthcare, funding and other matters such as job creation and recession. So it is important to be active in that process, as to do so is a small business owner's way of protecting their interests.

But what I am really talking about with this blog entry is the politics of doing business – and the extent to which a small business practices good politics with customers/clients and prospects as a part of their strategy for growth and profitability.

What is meant by "practice good politics." Well, for one thing, a small business has to have good PR with clients and competitors. There is such a thing as bad publicity and bad PR when you are a small business. Depending on what the issue is, negative PR can actually destroy your business. That is why the small business owner may want to think about their political strategy as it relates to not only their customers, but also to the competitors, the media, and their environment.

A small business must understand how to attract and keep customers, what to say, how to present their products and services to optimize the number of positive responses and ultimately, the small business owner must understand the sheer dollars and cents that are generated by their politics. Is it a game? Yes.

Good politics involves leadership, likeability, customer service, product proliferation and availability, quality of services and products, strong social and economic networks, crisis management, cost benefit analysis, knowledge and information, sharing values, work ethic, pricing, proper exercise of power, accountability and transparency.

In a sense, every small business, even if it is a vineyard in Napa or Bordeaux that distributes 500 bottles per year, should think of itself as a spa. That's right. A spa. It should think of itself as the Ananda Spa in the Himalyas. Or better yet, the Pezula Spa in Knysna, South Africa. Have you been there? Me neither. But I hear it is a thesis in "business politics." Pezula is situated on the coast of the Indian Ocean between soaring cliffs and the Knysna Lagoon. I am told that it will surely demonstrate rather than explicate how small businesses practices good politics, why it is important to do so, and how profitable it can be.