(Photo by David Drexler, via Flickr)

I bet you already know what inspired this month’s polls, huh?

Yep, that current phenomenon of political peculiarity, those pesky Tea Party types.

They’re not pesky because they oppose … um … everybody and everything. No, they are pesky because they are ignorant, paranoid and determined to spread as much misinformation and outright lies as far as possible.

They have, however, by their very existence, drawn quite a lot of attention to the fact that there seem to be a lot of Americans who are angry about our nation’s leadership and what it’s doing. Or maybe they’re scared.

It’s kind of a funny thing that Obama is doing pretty much everything he said he was going to do when he was running for office — well, without the limitations of political reality.

People voted him in on a wave of longing for change. Now they’re getting change and they seem to be collectively terrified. Go figure.

But I digress. Well, sort of.

People are angry enough and distressed enough (let’s not forget that Great Recession that’s playing havoc with people’s lives) to want to make their displeasure felt on Election Day.

Everybody knows that. Democrats are running scared and Republicans are indulging in a bit of premature gloating. It’s only September and it’s already distinctly unpretty.

Or is it really only an enthusiasm gap? It’s possible that the President and the Democratic-controlled Congress have plenty of support but it’s tepid stuff that won’t get people out of their houses on November 2nd.

And where do small and microbusinesses fit into this particular spectrum?

I’m glad you asked. I was wondering, too, which is why we have this month’s poll:

August Poll results

So, last month, we had another low turnout for our poll respondents and the way the answers broke out suggests that Journal Blog readers have a definitely leftish tilt to them.

Last month’s questions was: “Which political party is the better friend to small business?”

It’s reassuring to know that microbusiness owners are generally not a bunch of partisan hacks. Being a practical bunch, their top response was not even that much of a surprise.

Both have good ideas sometimes — 43%

Tying for second place:

Democrats — 28.5%

Neither — 28.5%

Seems like our Republican friends were MIA for last month’s poll! Under the circumstances, I think these results tell us more about who reads this blog than it tells us about what microbusiness owners are really thinking … but I suppose I could be wrong about that.

Once again, I invited you to share your thoughts about these results, or suggest a poll, in the comments.

(Photo by House of Sims, via Flickr)

So, here’s something I’ve been meaning to tell you about.

The short version is that the Streamlined Sales & Use Tax Agreement is back and there is recently introduced legislation that would allow states to require remote sellers to collect sales taxes from their customers.

If you are running an online microbusiness, no doubt you’ll remember the back and forth about whether or not you should be collecting and remitting sales taxes for your online sales. If not, it goes like this.

Every time somebody buys something, they become liable for the sales tax owing on that purchase. For most purchases, this is no big deal because you pay that sales tax at the cash register when you buy the item.

But when customers buy things from out of state merchants, those merchants are not required to collect sales taxes for the jurisdiction in which the customer lives. That’s because the Supreme Court, in a decision called Quill Corp. vs. North Dakota, said states only have the power to require companies to collect their sales taxes if said companies have nexus (i.e., a physical presence) in said state.

The rationale was that there are something like 7500 taxing jurisdictions in the country and if remote sellers are required to keep track of all those tax rates and taxable items and tax filing requirements in all of those jurisdictions, that would impose an undue burden on interstate commerce.

Under those circumstances, said the Court, only Congress has the authority to really address this issue. In the meantime, the states are out of luck.

When e-commerce started getting big at the tag end of the 1990s, President Clinton put together an advisory commission to look into this issue. One of the things to come out of that advisory commission was a serious effort on the part of most of the states to hammer out a uniform sales tax code that would satisfy the simplification piece called for in the Quill decision.

The result was the Streamlined Sales & Use Tax Agreement (2002), which should give the state signatories to that agreement the right to require remote sellers to collect their sales taxes. However, that was still going to require an act of Congress.

There have been several attempts to get this bill through the process, some initiated in the Senate and this latest effort launched in the House.

“This latest effort” is the Main Street Fairness Act (H.R. 5660), introduced by Congressman Bill Delahunt (D-MA) back in July and referred to the House Judiciary Committee.

Gotta love the name of this bill. That’s been the main argument here, that Main Street merchants are disadvantaged by having to collect sales taxes while remotes sellers don’t.

Remote sellers usually respond that such arguments are hooey, because while they don’t have to collect sales taxes, they do have to charge shipping and handling — which is usually substantially more than sales taxes.

But the arguments of the remote sellers don’t stand a chance with policy makers when they (appear to) pit giant Internet pure plays like Amazon.com against those mom & pop stores that are the mainstay of so many American communities.

This bill is interesting because it lays out, pretty specifically, the minimum simplification requirements that the Streamlined Sales & Use Tax Agreement will have to meet in order to win the right to impose sales tax collection duties on remote sellers. In fact, if you read that section of the legislation, you have to come to the conclusion that Congress’s idea of simple is probably not the same as yours or mine.

Fortunately, one of those minimum requirements — and this is another way this bill differs from previous efforts — is a uniform rule to establish a small seller exemption. Those previous bills set that standard themselves, calling a small seller one with less than $5 million in annual earnings over (I believe) the previous three years. This time, Congress would leave the small seller standard setting duties to the states, in concert.

It would be interesting to see what they come up with.

It seems unlikely that the House Judiciary Committee will get around to vetting this particular bill before the end of this legislative session, considering that the midterm elections are only about two months away and Members are going to want to get a few appropriations bills knocked off and then go home to campaign.

But let this serve as a warning to you. It’s been pretty quiet lately but this issue has not gone away. We’ll have to keep our eyes on it, and particularly on any small seller exemption proposed by anybody, to make sure our well-meaning lawmakers don’t crush online mom & pop stores in their yen to address their budget woes.

This show was supposed to air last Monday but, due to inescapable technical difficulties, it had to be postponed until today.

Todd McCracken is the president of the National Small Business Association, the nation’s oldest small business specific public policy advocacy organization. It was founded way, way, way back in 1937 and, today, represents a membership of more than 150,000 small business owners.

All of which gives Todd McCracken something of an intriguing perspective on one of my favorite topics: public policy and microbusinesses.

It’s kind of amazing for me to have to admit this but, for all that I’ve been covering small business policy in general and the NSBA’s activities in particular for the better part of a decade, this is the first time I’ve actually interviewed Todd.

That said, it’s always a treat for me to talk small business policy with people who actually know what they’re talking about (unlike many members of Congress, unfortunately), so this Microbusiness Conversation was fun.

It was a conversation that ranged from the specifics of small business policy and what makes it so difficult to make our needs plain to Administrations and sessions of Congress that seem to have a particularly severe case of collective ADD, to more esoteric stuff about the morphing 21st century economy and the changing nature of the workforce.

Great stuff. Should be required listening material for everybody in Congress.

The show will be webcast today at 2 pm ET, is roughly half an hour long, and will be available via archive within minutes after the show is over at 2:30 pm. After that, feel free to click here to check it out.

One other note: this will be my last Microbusiness Conversation for the summer season. I expect to be returning to my regular podcast, the Microbusiness News Briefs, starting next week. I also expect to be carrying on a couple of Microbusiness Conversations at the end of the year when my newsletters return to hiatus, as well as any other time I plan to record a podcast special.

Thanks for enjoying these chats with me. They’ve been a lot of fun, haven’t they?

Oh, and … Happy Labor Day. Hope this final holiday weekend of the summer was a good one for you and yours.

I was a well brought up child who learned at an early age that it’s a good thing, when one has nothing to say, to say nothing.

You wouldn’t think my mind could go blank like that for an entire week and half, would you?

So, I got jarred out of my semi-somnolent state by a piece of news that I am very proud to share with you all.

I am a National Partner of Women Impacting Public Policy (WIPP) and serve on its Executive Advisory Board. I have just learned that WIPP has chosen to honor me with its 2010 Public Policy Award.

How cool is that? (Pause for musical interlude … ) Download audio file (Cant_Touch_This.mp3)

WIPP Public Policy Award. Presented to a member who sets an example of the power each of us has by becoming actively engaged in the political process.

So, how did I nail this award? Well, I’ve never mentioned this here before but I am very active in the leadership of my political party here in my home county and I am also active in the party on the state level.

Heck, I even ran for office last year.

So, I will be traveling to Washington later this month to receive this honor. While I’m in town, I expect I’ll be visiting some of my connections down there and I know I’m going spend some time on Capitol Hill.

All of which is likely to give me some things to tell you about here. I expect these silent periods will be shorter and less frequent, starting this month.

Kindra Cotton owns SSS for Success (EASY Brand Marketing Specialists), a company that promotes small business survival through using the specially designed EASY Brand Marketing Program. She is also the creator of The MiniMarketing Survey, and she channels her energy into multiple activities that are geared towards helping small business grow.

About two years ago I officially announced “I was in business” and at that time, I literally had no idea what “business” I was in. Like the main character in Brewster’s Millions, I was “in the business of being in business”, and I wasn’t hitting my target market because quite frankly, I didn’t have a target.

I made the classic entrepreneur’s mistake of answering “everybody” whenever someone asked “Who is your target market?”. Sure, it would be great if everyone could become my customer, but its actually more economical (both in terms of time and money) for me to whittle my target market down to “25-54 year old business owners with less than $250,000 in sales that have been in business for 2 – 5 years”, because that audience is much easier to reach than “everyone”.

Having a target market in my sights actually helped me further define what were the “ideal characteristics” of my “best customer” who would find the most value in my services. From there, I realized that those in my target market needed to know that they needed help and be willing to accept it and not get stuck in their old ways of doing things.

With this “profile” of my ideal customer, finding out where they are and the best ways to connect to them are key. I continue to conduct ongoing market research to “fine tune” my product and service offerings, and since my brand is relatively new, it along with our web presence, is still evolving.

But what does this have to do with you? If you know everything there is to know about your target audience, and can’t benefit from increased sales and more effective operations, then probably nothing. If however, you have some questions about your customers, or could use their feedback, or you just want to know how well you’re fairing against your competitors, then I would suggest the following:

1. Conduct Informal Feedback: Ask your customers and clients how well you’re doing when you interact with them in-person, on the phone, or via email or any of the social media tools that you use to stay in touch with them. The benefit to informal feedback is that you learn what you need to know pretty quickly, but the disadvantage is that it can be time consuming, especially if you have a large customer base.
2. Try The MiniMarketing Survey: The MiniMarketing Survey was designed to be the bridge between informal word-of-mouth feedback and larger, more expensive market research projects. The benefit to using The MiniMarketing Survey is that it would provide more detailed feedback than your informal feedback initiative but your turn around time is longer (though 30 days or less isn’t too bad).
3. Consider a Larger Market Research Project: The greatest benefit from conducting a larger market research project is that you would get in-depth feedback about your market, your customers, and your performance, but the flip-side would be that it’s significantly more expensive than either of the aforementioned suggestions.
4. Review Customer Records & Feedback (if you have it) and Identify Trends and Themes: Some of the information you need to get informed about your customers is already in your possession. Reviewing customer data and feedback gives you the opportunity to highlight the characteristics of your customers, identify who may be “your best customers”, and find out more about what sells and what doesn’t, and hopefully you’ll be able to notice some trends that can help you improve your business processes or more effectively address the needs of your customer base.

Of course, the do-it-yourself methods suggested above are time consuming, but a general rule of thumb that I like to apply is this: Take your hourly rate and multiply it times the amount of time it will take you to complete the task. Then look at that number, and decide if you can pay someone else to do the work for you at that price.

For example, if you charge $100/hour as a consultant and you estimate it will take about 10 hours for you to review your customer records, could you find someone to effectively do the work for you for $1000? If so, then it’s definitely worth it to use them, since it will free up your time and you can continue running your business and servicing your customers.

It is essential to know what you do well, how well your customers think you’re doing, and how you can continually improve and grow your business with the information you need. The importance of market research cannot be overstated, especially when you’re operating in a market that has consumers and businesses tightening their belts and being more judicious with how they spend their dollars.

The best way to get the information you need on your market is to dive right into what you already know by taking a look at your previous customers, then branch out from there to enhance your knowledge and help you better address the needs of your target market.

[If you’re a small business owner, please help Kindra with her own market research efforts and fill out this brief survey.]

Last week, the Bureau of Labor Statistics released the latest installment of its business employment dynamic data, this time covering the fourth quarter of 2009.

The employment dynamics data is important because it provides a more complete picture of the labor market than you get from the monthly employment numbers we get from the Labor Department. The employment dynamic numbers show us job gains from business launches and expansions, job losses from business closures and contractions, and the net gain or loss in employment for the quarter.

It’s a good way to look at this, especially when there are any number of Chicken Littles running around proclaiming that the sky is falling. Even when the economy was at its worse, losing more than a million jobs in a single calendar quarter, there were still upwards of 7 million jobs created during that month.

These numbers cover a period that occurred after we had hit bottom and, in fact, there was at least one individual month during the quarter when we got to celebrate reports of job gains. Overall, however, we still came out of the quarter in the red.

During the fourth quarter of 2009, the U.S. economy generated about 6.6 million jobs and lost about 6.8 million of them, giving us a net loss of about 200,000 jobs. Sounds bad but nothing like the net 2.7 million jobs lost during the first quarter of that year.

When I was covering this data series for The MicroEnterprise Journal over the last year or so, I’ve been looking at the numbers in terms of job gains/job losses ratios. So, the closer to a 1:1 ratio any firm size class reached, the closer they were to break even point where the jobs lost equaled jobs gained.

That number, I figured, would be a good proxy for when any given firm size class was about ready to turn the corner into positive turf on the job creation numbers. And the entire point of this exercise was to be able to figure out which firm size classes were getting into positive jobs numbers early, to “lead us out of this recession” as the politicians like to put it.

Of all the firm size classes, microbusiness employers with fewer than five employees were doing better than everybody else at that time. In fact, there were very close to that 1:1 ratio, with 931,000 jobs gained and 934,000 jobs lost for a net loss of only 3,000 jobs.

That’s better than anybody else did for the quarter.

The folks who were still doing most of the struggling (relatively speaking) were firms with between 5 and 99 workers — the true non-micro small businesses. Firms in these size classes generated a combined total of 2.4 million or so jobs but lost a combined total of about 2.6 million jobs. That’s almost the entirety of the net job losses for the quarter right there among these firm size classes.

Another way to look at it is that these firm size classes accounted for 45% of total job gains for the quarter but they also accounted for 47% of total job losses.

Medium-sized businesses (those with between 100 and 499 workers), on the other hand, appeared to be in better shape — again, relatively speaking. They added 789,000 jobs that quarter and lost 821,000 jobs, for a net loss of only 32,000 jobs. Again, very close to that 1:1 ratio.

The two largest firm size classes, with over 500 employees, continued to shed notable numbers of jobs, too. They were responsible for 22% of job losses, which is noteworthy since they account for such a small fraction of the total number of U.S. firms. Among them, they generated 1.2 million jobs but lost 1.3 million of them.

From these numbers, it still is tough to predict where the jobs will be coming from once the net number turn positive, which will almost certainly be contained in the next release in this series.

It looks as if the microbusiness employers will be taking the lead here and that makes sense in light of those recent findings from Kauffman. Microbusiness employers include new business launches; as a general matter, this firm size class accounts for between 60% and 65% of jobs generated by firm openings per calendar quarter.

And, as rotten as these last few years have seemed, there have been new firms launching during the entire time.

The next set of BLS employment dynamic data will be released in November, covering the first quarter of 2010. We’ll see what the number tell us then.

(Visit Microbusiness Conversations at Blog Talk Radio, today at 2 pm Eastern, to listen to this interview. You can also listen to the archived show at the Microbusiness Conversations web site.)

Kare Anderson is literate and eloquent, generous and compassionate and — just in case you can’t tell — I really enjoyed my conversation with her.

This is the first time I’d ever talked with her, too, by the way. I have bumped into her any number of times here and there online but this is an initial direct encounter that will, I hope, presage many more.

She chuckled when I told her that I wanted her to share her wisdom with us but she really is wise … and that’s something you don’t get to say about somebody every day.

A few of my favorite moments during the interview:

“You can’t make people wrong because [the way the economy is changing] is scary … “

“I think to look at opportunity is to say, ‘How do I stand out so I’m something that’s a small indulgence or the smart thing to do?’”

“Step outside of your shoes with a compassionate, clear view of what’s going on for people, where can what I do be of value … ?”

“If someone is only wanting to be a taker, that may just be a blind spot. Why make them wrong?”

“And when other people are just givers, that’s equally unbalanced because, at some level, they’ll resent that you don’t give as much as they do. But when people want to look for that sweet spot of mutual benefit, that common ground, then they’ve got boundaries that they can see more clearly so you can have a conversation, you can actually have fun, you can kid around, and that’s the way I want to live.”

“If you focus on the goal first, I think it reduces the differences and it enables us to get more in sync.”

There are more of these but you’ll have to listen to the interview to find them.

While you’re at it, visit Kare’s Moving From Me To We and

As a general matter of principle, I don’t much like recess appointments. I’ll admit, I also don’t like the way partisan politics has caused any number of Presidents to have trouble filling critical posts in the government, either.

But I digress.

In this particular case, however, I have to applaud President Obama for his decision to make a recess appointment of Dr. Kellen Winslow Winslow Sargeant …

no, wait, that’s not him …

Ah! There he is!

… to be Chief Counsel of the SBA office of Advocacy. Sargeant and three other Obama nominees, all of whom had been waiting for an average of 303 days for Senate confirmation according to the White House, got the nod yesterday.

In the particular case of Dr. Sargeant, the President nominated him in March 2009, at the same time that he nominated Peggy Gustafson to be Inspector General of the SBA. Peggy sailed to confirmation but an “unknown” Senator placed a hold on Dr. Sargeant’s nomination, preventing a straight up and down vote

(Pause for musical interlude … ) Download audio file (StraightUp.mp3)

and effectively putting it (and Dr. Sargeant and his family) into limbo for more than a year.

The public objection was that Sargeant is not an attorney and some lawmakers — among them being Senate Committee on Small Business and Entrepreneurship Ranking Member Olympia Snowe (ME) — questioned his ability to effective monitor federal regulations without the legal background.

That’s a pretty thin objection, as many of us have recognized. For one thing, the position is not required by statute to be filled by an attorney. For another, Advocacy has plenty of lawyers on staff, so the fact that the Chief Counsel wasn’t one, too, needn’t be an issue.

Besides, Sargeant had the support of all sorts of interested folks for this job, most notably from his immediate predecessor, Tom Sullivan. Speaking personally, if Tom thinks Dr. Sargeant is qualified for the job, that’s good enough for me.

Then again, there have been rumors, too — persistent but unsubstantiated — about some discontent among Committee Republicans who remain unnamed but who preferred some other equally nameless candidate for the job, causing them to block this nomination.

All rather cloak and dagger, yes? And plausible but not especially credible.

Be any of that as it may, this particular game of Political Chicken is over with these recess appointments. I hope to get a chance to talk to the new Chief Counsel early next week, after he is sworn in.

Meanwhile, I’ll just say, “Congratulations, Dr. Sargeant! Welcome aboard.”

Not a bad note upon which to end the week, wot? Happy Friday, folks!

It’s not all that often that I come across an intellectual kindred spirit, which I guess means that I am moving in the wrong circles.

If I stop and think about it, the most outstanding virtue of David Gewirtz is his common sense.

In Washington, policy makers have been running around like so many headless chickens squawking about how small businesses need loans so they can hire people.

That is a big business way of thinking about things, though. Most microbusiness owners are not going to borrow money to create a job. Most microbusiness owners feel that if they need to borrow the money, they can’t afford to create that job.

Possibly, some people would think that a bit backwards of them.

David says that if you want small businesses to create more jobs, how about making it easier for them to do it? Especially if the business in question is a nonemployer making the transition to employer.

Let’s make it as easy as possible for that to happen because we really want that to happen, don’t we?

If even a fraction of all those businesses out there with fewer than ten employees each create just one job each, how many new jobs would that be?

(Tell me if any of this is starting to sound familiar … )

Join me at Blog Talk Radio for a Microbusiness Conversation with David Gewirtz, author of How To Save Jobs. Original broadcast right now (today at 2 pm Eastern); available archived within minutes after the broadcast ends, at 2:30 pm.

Next week, I have a real treat in store for you: Kare Anderson will be joining me for a Microbusiness Conversation.

You may recall that I closed out last month with a post about a certain set of silliness in Washington and, specifically, a few nuggets of competition between Democrats and Republicans over who gets to wear the Friend to Small Business laurel wreath.

That post inspired my August poll. And even though we are halfway through the month before I’m telling you about it, there is still plenty of time to vote.

What do you think? Which party does a better job with small business policy? Democrats? Republicans? Both? Neither? And feel free to add additional commentary. You know I always love to hear from you.

July Poll Results

Last month, we had somewhat better participation than what I’m used to seeing and that had the result of producing survey results that were a bit more interesting, too.

In July, you may recall, the question was are you an independent business? Here is what you said:

Well, my business tracks the larger economy but my business decisions are independent! — 41.7%

I guess so, I’m doing better/worse than I should be right now. — 33.3%

Yes! I never have to worry about the larger economy! — 16.7%

I only have a couple of large clients and can’t afford to annoy them, so I’m not so independent. — 8.3%

If there were any surprises here, it was the percentage of respondents who said they never have to worry about what the larger economy is doing. I suppose there are some businesses that are absolutely immune to the vagaries of the business cycle like that but, I’ll confess, I can’t think of any off the top of my head.

There was also a surprisingly larger percentage of respondents who were not doing as well or as poorly as they thought the should be, given what the economy is doing. I wonder if most of them were doing better or worse? I’m wishing I had broken that response down a bit further but … too late now.

Oh, and by the way, if you have any ideas for microbusiness polls, feel free to drop a suggestion in the comments.