Recovery lagging for small businesses

June 4, 2010
| By Pete Daly |
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A recently completed survey indicates that 65 percent of Michigan small business owners who are members of the Michigan Business & Professional Association would agree that they have made significant changes to weather the recession, and 58 percent of the respondents believe that Michigan’s economy will remain stagnant for at least the next year.

“We knew our members were having trouble with the economy,” said Jennifer Kluge, COO of the MBPA. What caught her organization by surprise were the survey responses revealing a perceived lack of a recovery so far for the small business sector.

When asked about the most significant factor affecting their business, respondents blamed state government for the negative climate generated by the Michigan Business Tax, high unemployment taxes and the precarious state budget, according to Kluge.

“In order to stay alive, small business owners have reduced staff, eliminated or modified health care benefits, reduced hours, and cut additional expenses wherever possible,” said Kluge. “Now, they want state government to step up to its responsibility with measures that help business, like eliminating the MBT, reducing unemployment taxes, providing programs that encourage business investment and reforming state government.”

“We don’t want businesses moving to Indiana because they aren’t going to be taxed there,” said Kluge.

Based in Warren, the MBPA (www.michbusiness.org) is the largest business organization of small to medium-sized businesses in Michigan, representing more than 20,000 members who employ over 160,0000 workers. Members include attorneys, physicians, architects, accountants, construction companies, banks, retailers, wholesalers, manufacturers and the like. The MBPA is a sister association to the Michigan Food & Beverage Association.

The April/May survey offered insights about how a cross section of small business owners from mostly mature companies are coping with Michigan’s current economy.

According to the survey results:

  • 35 percent eliminated staff within the past year.

  • 49 percent saw business decline within the past year.

  • 35 percent are planning significant changes including soliciting new markets, doing more marketing, expanding service offerings and further cutting capital spending.

  • 19 percent have seriously considered moving to another state.

  • 28 percent believe that Michigan’s economy will continue to decline.

Kluge concluded that the survey underscores how desperately state government needs fiscal reform and a much stronger pro-business climate.

“The state needs to do something for small businesses to create incentives, create an environment that’s pro-business,” she said.

“If they brought the film industry here with incentives, imagine what they could do if they put some incentives together for small businesses, rather than just the film industry,” said Kluge.

She noted that 90 percent of economic growth comes from jobs generated by small business.

The MBPA lobbies on behalf of its members in Lansing. Member businesses also receive numerous benefits including free legal and financial consultations; discounted technology, automotive and office products; employee training and recruitment assistance; and competitive insurance rates.

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