An Important (And Under-Reported) Issue for Small Business

In America circa 2011, there certainly isn’t much on which politicians from either side of the aisle can agree. However, despite the vitriol, violence and outright lunacy, there is one constituency in the country who no politician will deign to disparage: small businesses. Obama singled them out in his SOTU speech and has spent the last few weeks selling them on his new economic proposals. The GOP, for its part, pays them a lot of lip service, though when it comes down to brass tacks, doesn’t really seem to care much for actually helping them out (it’s not even clear that they know what a ‘small business’ is). In any case, everyone can at least rhetorically agree that small businesses are the lifeblood of the US of A.

That’s why this piece from Steve Benen is so interesting. It seems Jeffrey Leonard, CEO of the Global Environmental Fund, recently wrote an article in the Washington Monthly about the issue of payment rates of corporations who contract, especially with the federal government (very large businesses), to their suppliers (small businesses). As it turns out, these very large businesses have benefited from a system gamed to favor them over the little guys. I know, go figure! What this means is that while the small businesses must pay their bills on time, every thirty days, just like you or I, big business can put their payment on a 3-4 month schedule. The result? Small businesses shuttering because big business doesn’t have to pay them what’s owed on time.

Now, I realize this isn’t the sexiest issue. But Benen and Leonard are really hitting on something that could potentially inject a whole shot of adrenaline into the small business community, allowing them to prosper, just like the giants. Just read some of the comments in the post, check out Jeffrey Leonard’s interview with Stephen Colbert and then go read the article. They’ll make you stop and think about how unfair the present system is as it stands and how easily it could be modified to make things more fair. As a small business owner from PA puts it:

“The last 10 years have featured a dramatic push to keep big corporations happy, much of it at the expense of smaller companies that are the real job, innovation, and creativity generators in the economy; and it’s way past time to level the playing field.”




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