Who Counts? Not Small Business…

How is our government counting jobs? 

According to Political Calculations, since 2009 under the Obama administration, through December 2011, we are losing private sector jobs in industries we consider the heart of America. 

In Transportation and Warehousing from 2009 through 2011 we have lost 769,000 (46%) jobs; in Manufacturing, 329,000 jobs (20%); and in all other civilian jobs the loss is 565,000 (34%). 

You can only draw one conclusion, if we are seeing an uptick in jobs, it is government created jobs using taxpayer dollars.  Your money.  In other words, its all about politics and getting re-elected.

Government getting in the way, is happening at all levels of government.  Isn’t it our loss if a small business loses an employee and Time Warner’s gain if they can count one or is there’s more to the story?  

An article in the Tampa Bay Times March 12, 2012, When it comes to recruiting businesses with taxpayer funds, Florida should be pickier, Robert Trigaux, Times Business Columnist states Time Warner received $3,000,000 to bring 500 jobs to Hillsborough County.  Not exactly.

Unfortunately, for one small business and the rest of the State’s taxpayers, Time Warner and the State’s jobs program is tapping into existing state jobs, not new out-of-state jobs.  Time Warner’s recruiters are calling in-state employees repeatedly recruiting them to leave their in-state employer, in this case, a small business in Pinellas County, to take a similar job for more money in Hillsborough County on the taxpayers dime. 

A high value software developer recently left his job at an in-state small business in Pinellas County, to work for Time Warner in Hillsborough County.  A small business in Pinellas recruited him 8 months ago from Buffalo, NY.  The cost to recruit and employ him, easily exceeded $10K, considering moving expenses and training costs.  This small business did not receive any state, county or local funds.  Time Warner should not receive credit for a new hire who is an existing worker from the State of Florida.  As a small business they employ 37 FTEs with average annual wages well exceeding $60K.  

The small business in Pinellas grew from approximately 25 to 33 plus FTEs in 2011 alone.   That’s a 32% increase in employment in one year.  Where else do you get that kind of return on employment?  Not with big businesses like Time Warner.  The small business in Pinellas expect to hire 5 – 10 additional FTEs in 2012.  They have a great benefits package and a casual work environment.  Still, it is hard to compete with large corporations, in particular, if the corporation is receiving millions of dollars in State money, to hire in-state employees.

Finally, there’s even the question of county government giving big business an unfair advantage over a small business right in their own backyard.  This story appeared in The Tampa Bay Times recently concerning Hillsborough’s Bass Pro Shops receiving $15 million in State and County funds to open shop next door to a local small business, Boaters World, offering many of the same products and services. 

Where’s the business logic in that and why does a government bureaucrat get to make decisions affecting private enterprise?  Outrageous!

Social Media is Blowing up the Dictators of This World’s Proverbial Skirts!

Today, Social Media is Blowing up the Dictators of This World’s Proverbial Skirts!

There can be an end to ignorance, hatred and divisiveness.  Our hope is the word, the depiction, the song and the act can bring even greater gratification.  The culmination of art forms can be amplified through the expression of social media.

Today, are words too common?  Is photography, a depiction, passé?  Is sound, music to our ears, second hand?

Words, pictures, sound, all are considered art forms.  Traditional art forms?

It’s more popular to opt for the culmination of all these traditional art forms, video, the act.  There’s no contention.

Publishing of news, magazines and books can produce art.  The same holds true for music and movie production, all established art forms.

So what does YouTube, Twitter and Facebook, social media, bring to the table in terms of art form?  A new art form?   I think not.  Facilitators?  I think so.

Social media brings freedom of expression.  Freedom of expression creates art.  Think light speed.  Social media creates freedom of expression at light speed.  All one can do is imagine the creativity bottled up inside each and every one of us!

Today, through technology, the future is 24/7 and is happening before we can create it!   The future is freedom of expression that will bring worlds apart, together.  Social media, not bullets, not bombs will be blowing up their skirts.  Suppressors of freedom, dictators, communists, socialists, they’re all on notice.

There’s no escape.  Social media is blowing up their skirts.  Stay tuned.  Amazing!

Alien Nation a.k.a., The Obamacare Nation

Alien, the movie was all about spreading spores and breeding aliens to prey on mankind, should the spores reach our planet.  Obamacare and its spores are already here.  Come 2014 the invasion will begin in earnest.

In Alien, Sigourney Weaver is the much larger than life heroine who thwarts the Alien invasion, at least until Aliens…  Who can stop Obamacare?  Maybe Pam Bondi, our larger than life Attorneys General for the State of Florida and the case she and attorneys generals in 26 other states have filed against Obamacare with the U.S. Supreme Court?

I’m just a small business owner.  My concerns as a small business person and employer need to be amplified on a scale much bigger than fiction.  We’ve already been invaded.  The spores of Obamacare have already been planted. Officially, Obamacare is the Patient Protection and Affordable Care Act. The Senate passed it on December 24, 2009.

Beginning in 2014, when Obamacare explodes on to the scene, small business as we know it will cease to exist.  In its place will be big government running a significant portion of small business, literally.

The heroine (or hero) in the real life movie Obamacare is the entrepreneur, the small business owner.  The enemy is SHOP, the Small Business Health Options Plan.  Big government is betting small business owners don’t have the time or the energy to sit through the movie, but as right-brained as many entrepreneurs can be, myself included, navigating SHOP is a must see.

The entrepreneurial spirit will be crushed by the most egregious of government actions since the payroll tax increase in April, 1983 which was cause and effect, the catalyst for U.S. manufacturers investing in jobs overseas.  There will be nothing to prevent another government subsidy, Obamacare, to balloon out of control, as have Social Security and Medicare/Medicaid and chase more jobs overseas.  To illustrate, below is a paragraph from HHS regarding Obamacare and the SHOP program.

“Consistent with the scope of the Exchange establishment and eligibility proposed rules, this final rule does not address all of the Exchange provisions in the Affordable Care Act; rather, more details will be provided in forthcoming guidance and future rule making, where appropriate.”
 

From what I have read in the 644 page document, Final Rule State Healthcare Exchanges, from the Department of Health and Human Services (HHS), how the final rules address small business, capitalism and the entrepreneurial spirit and the heroine in this movie may die.

Let’s look at the subplot, lawyers and paperwork. It takes a lawyer to spawn a comment like this, “The final rule does not address all of the insurance exchange provisions of the Patient Protection and Affordable Care Act and additional rules will address those, according to the rule.”

Great ambiguity, but true!  There’s plenty of room for HHS to make up more rules and regulations under the auspices of Obamacare.

Obamacare is a lawyer’s dream!  In a country and a society as litigious as the USA and a law this broad, full of waivers (prejudices), exceptions and rules yet undefined; wasn’t instituting this law insanely àpropo?!  In 2014 and beyond, the justice system will be brought to its knees.  No.  It has already been brought to its knees.  It will be buried!  So will many small businesses be buried, who can’t afford a good lawyer; who can’t afford the paperwork explosion.

HHS says one form.  SHOP says only two forms, but if you read between the lines you know the paperwork will border on the ridiculous.  Hello!, fellow small business owners…think annual Worker’s Comp. audits!  Worker’s Comp. audits will be nothing compared to HHS audits sure to follow.

Here’s a snippet.  Keep in mind this is one paragraph of a 664 page document to mandate a final rule on SHOP!

“Consistent with the statutory directive for HHS to provide a single, streamlined application form, we also proposed that the SHOP use only two application forms: one for qualified employers and one for qualified employees. We further proposed that for the purpose of determining eligibility in the SHOP, the SHOP may use the information attested to by the employer or employee on the application but must, at a minimum, verify that an individual attempting to enter the SHOP as an employee is listed on the qualified employer’s roster of employees to whom coverage is offered. We also proposed that the SHOP have processes to resolve occasions when the SHOP has a reason to doubt the information provided through the employer and employee applications. In addition, similar to the individual market Exchange standards, we proposed that the SHOP notify an employer or employee seeking coverage of the SHOP’s eligibility determination and the employer or employee’s right to appeal.

The final ruling on SHOP brings more questions than answers.

Bigger government, more regulation, new laws, especially the behemoth of all laws, Obamacare, create entirely new industries. Obamacare will undoubtedly create another cottage industry, like Dodd-Frank did for compliance and regulation, but Obamacare will create a tsunami of new so called experts spawned to aid small cash strapped businesses navigate Obamacare. Essentially they are government created jobs and all at taxpayers’ expense.

Many businesses are started by sole proprietors. Sole proprietors are excluded from SHOP. Sole proprietors pay the same tax rate as LLCs and Sub-S Corps. Don’t sole proprietors often spawn small businesses?

What if an employee can find a better plan by shopping the individual market and he or she wants to opt out of a company’s group plan?

Once invited to participate in SHOP can an employee still “SHOP” for their own individual insurance plan.  If the employer is getting a less competitive price due to lack of participation, how does that affect the employer’s plan and administration?

Regardless of the “one bill for all” concept which most small businesses already enjoy, if you have 10, 20 or 50 employees, you may have to track different deductibles for each employee.

Will HHS and SHOP pit employers and employees against one another; against insurers?

Will SHOP leave one employer at a competitive disadvantage with other employers based on participation and economy of scale?

On the other hand, if insurance companies have to give individual employees the same price as employers, which according to SHOP is the rule, the price goes up for employers.  Don’t the private insurers win?

What if you have employees in different geographical areas?  What if  they are eligible for different, more competitive SHOPs?

Certainly there will be more questions.

Today the private health insurance company is on the hook for the employer’s unpaid bills, not the government.  With the government on the hook for unpaid health insurance premiums at least with SHOP, the winner is the insurer.  The loser is the taxpayer.

The Aliens have landed, their spores have been planted and come 2014 there will be no stopping them.  In the role of big government, Obamacare rules. 

I can save you some time.  All I’ve learned about the details of how the exchanges are going to work is summarized above.  To learn more HHS or your state government will have to set up SHOP.

As for the spread of big government, here’s a glimpse of the future (another excerpt).

“SHOP may want to fulfill additional functions outside the scope of the proposed rule in order to offer employers a streamlined experience when managing their employee benefits. These commenters proposed that the SHOP sell other types of insurance, administer COBRA on behalf of participating employers, administer flexible spending accounts, assist small employers in setting up Section 125 plans, and oversee wellness programs.”  “We will take these comments into account as we consider future guidance on the offering of other products on the Exchange.”

Stay tuned!

Lead with Words. Live Free, Not Die!

John McCain came out today and said we should arm the freedom fighters in Syria.  John needs to spend more time on his iPad.  Most freedom fighters are peace-loving people, not soldiers.  They want to live free, not die.

Social media, Facebook and Twitter can do what shock and awe, subterfuge and sanctions will not do.   Free the oppressed.

We are ignoring the obvious.  Twitter and Facebook are the path to freedom in Syria and beyond… Twitter and Facebook are ubiquitous.  They can, persona non grata, topple middle eastern dictatorships.

 The video link (Iran election pictured on the right) to the right is a segment which highlights the power of the internet and social media, produced by Mike Walsh, futurist and CEO of innovation research lab Tomorrow.

Lead with words!  A double entendre that would be rendered empty without the help of real life martyrs, real life freedom fighters, brave, passionate people dating all the way back to our own founding fathers.

We need to drop Smart Phones not Smart Bombs into countries ruled by dictators and religious zealots!  Cell phones and the internet may be blocked but USB devices are ubiquitous.

Instead of dropping leaflets, like they did on occupied Germany and France in WWII, drop USB key drives and SIM cards for cell phones with a message of hope.

Let them know their leaders are slaughtering their own.  Let them know, those who are freedom fighters, that the whole world is with them.  Let them know the whole world is outraged by the brutal dictatorship and will punish human cruelty.”  Let them know we are grieving their losses.  Let them know the true spirit of freedom and the goodwill of humankind is on their side. 

Ask the supporters of the dictators to drop their weapons and cross the line to a world of promise and freedom from oppression.  “The Enemy Within” was an episode of Star Trek: The Original Series.  The evil side of Captain Kirk being beamed up to the Enterprise in Start Trek.  The good Kirk defeats the evil kirk by virtual sheer willpower and the help of Spock and Scotty.

The free world surely has the resources and ingenuity of Spock and Scotty to give the freedom fighters in Syria and beyond the willpower that comes from within.  The good people of Syria and beyond will cross the line and choose to live free.

Let’s do what we can to help them “live” not “die” for freedom.  Let’s show our support and Tweet and Facebook (post) a message now to all your fans and friends, “Live free, Not Die!” to get the message out to our Middle Eastern and African neighbors who live under oppressive dictators.

Here at home, let’s put a face on freedom. Tweet and Facebook the message.  Live free, not die.  Bullets and bombs are cruel and will not discriminate, but truth and freedom will prevail.  Twitter them free.

Wikipedia – Telecommunications in Syria is slowly moving towards liberalization, with a number of licenses awarded and services launched in the Internet service provision market. The initiative reflects the government’s change in attitude towards liberalization, following its promise to the European Union to liberalize markets by 2010. All other forms of fixed-line communications are provided by the state owned operator, Syrian Telecom (Syriatel or STE).[1]

Made in the USA

The Real McCoy for Small Business

“Made in the USA” isn’t about the Big 3 automakers…

It’s time to put the brakes on government spending. The road to recovery lies with the success of small businesses, not with behemoth car companies and big labor. If we were going to bailout anyone, we should have bailed out the car dealerships and auto supply companies to allow them to remarket, retool and invest in new technologies. We should be growing our tax base, which is only going to happen if we fuel the small business private sector. Speaking of which, why are we not doing more to grow and keep promising small business technology companies and their technology jobs in the USA, where our best talent and our best jobs can remain right here at home?

“You will find men who want to be carried on the shoulders of others, who think that the world owes them a living…

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“The best way to predict the future is to invent it.” – Alan Kay

The Real McCoy for Small Business

Business is improving, despite all the obstacles in this unpredictable economy that remain and those ahead of us.  This is largely self-fulfilling prophecy as our engine runs on premium personnel and our management team isn’t half-bad either.

We have invested a great deal in new products and new markets.  I’m a big fan of Alan Kay’s expression, “The best way to predict the future is to invent it.”

I guess you could say this message comes somewhat diluted by the BP oil spill.  Accidents, like the BP oil spill and natural disasters are unpredictable but they are going to happen.  I can see the raw and gut-wrenching affects as they unfold for our neighbors in the Gulf States and the Florida Panhandle.  We are certainly not exempt from the fallout.  We are also far more fortunate.

There’s little one can do in the moment but there is much that can…

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Added Regulatory Burden is a Tax on Community Banks, Credit Unions and Small Business

This is the message from Financial Institutions (FIs) and Small Businesses burdened with Sarbanes-Oxley, Dodd-Frank and Obamacare.

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Although the Sarbanes Oxley has been in effect since 1992, bank regulators have turned up the heat on FIs and small businesses that support them in recent years.  Regulators have tasked FIs with obtaining extensive background on their 3rd party vendors, not the least of which is a Statement on Auditing Standards (SAS) 70 Type I or Type II.  Type II is much more comprehensive and is required if a 3rd party vendor has access to sensitive FI data.  Many small businesses have to deal with PCI compliance and regulatory uncertainties placed upon them by Dodd-Frank and Obamacare, as well.

The “short link” to this narrative is  community banks, credit unions and small businesses have to dedicate at least one full-time employees (FTE), plus high level management’s time to manage these regulatory requirements. 

FI’s are comprised mainly of community banks and credit unions with assets of 50 million to 10 Billion.  Many of them are small businesses too, employing 25-50 employees on the lower end to hundreds on the higher end.  Therefore FIs employ FTEs and/or outside consultants to manage the burden.  The SAS 70 requires a great deal of technical expertise.  In addition small businesses have had to hire their own 3rd party accounting, legal, security and compliance experts to test regs tied to intrusion detection, audited financial statements and site inspections.  Vendors have had to install and keep up-to-date hardware, including an array of security cameras and a “boat load” of security and encryption hardware and software, as well.

Consider these FIs manage 20-30 3rd party vendors .  Add to this the cost to each vendor, small community banks and credit unions, who have to manage the same regs.  Consider the changes vendors have needed to make to the software they provide to FIs.  The costs could be well into the billions. 

Add to this hundreds of businesses, call it a “cottage” industry, that have sprung up to aid  3rd party vendors and FIs who can’t afford to deal with all these new government regs and compliance.  Small business vendors can easily spend $10,000 or more per month to provide compliance to customers and the security they need under ever increasing government regulations.  Ironic isn’t it?  New businesses are spawned by increases in government regualtions.

Added regulatory burden is a tax on small business.  Businesses, especially small businesses have to pass that cost to our customers and so on to the end result, the consumer.

One final consideration.  Community banks, credit unions and small businesses are not going to get the media attention of Occupy Wall Street.  We are occupied with raising our families, growing our businesses and gainfully employing people who want to work for a living.  We generate over 60% of the new jobs in this country.  If our government continues to go down the path of increased regulatory burden and continues to place the burden on small business, legislators will have fewer laws to pass, fewer regulations to enforce and fewer job creators to tax.  You will put us and more of my fellow job creators out of work.

Here’s our  message to our representatives in government…

“If you continue to put small businesses,  the real job creators out of business, we will turn the full force of our entrepreneurial spirit into making those of you, who over-burden us with excessive regulatory burden, out of business, too!”

Background:  SAS 70 was issued in 1992 and there have been no changes in it until now. Now effective for accounting periods beginning on or after June 15, 2011 a new standard, Standards for Attestation Engagements (SSAE) 16 will be in effect. Do not expect any immediate changes. Most companies have fiscal years that correspond to the calendar year. For those the new standard will not be effective until January 1, 2012 and the reporting under the new standard will not be available until the company’s financial results for 2012 are published in 2013. Many people misinterpreted the SAS 70 report as a means to obtain assurance regarding a vendor’s controls over compliance and operations. It was not. It was only a report of the vendor’s controls over financial reporting matters. The new SSAE16 reports will be much more comprehensive.

Under the new reporting regime there will be three varieties of reports, SOC 1, 2 and 3. The SOC 1 report will be similar to the existing SAS 70 report in that it will report on the company’s controls relative to its financial reporting. A SOC 2 report may address one or more of the following five key system attributes:

* Security – The system is protected against unauthorized access (both physical and logical).

* Availability – The system is available for operation and use as committed or agreed.

* Processing integrity – System processing is complete, accurate, timely and authorized.

* Confidentiality – Information designated as confidential is protected as committed or agreed.

* Privacy- Personal information is collected, used, retained disclosed and disposed of in conformity with the commitments in the entity’s privacy notice, and with criteria set forth in Generally Accepted Privacy Principles (GAPP) issued by the AICPA.

The new auditing framework places additional demands on the management of the organization being audited. Management must make a representation of the controls in place and a criteria for the description of the system, design and operating effectiveness of the controls. It must also evaluate the risks that threaten the achievement of the control objectives and any changes that were made in the system during the period.

 

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