Published February 12, 2012
By Jenny Munro, The Greenville News, firstname.lastname@example.org
Small businesses — those with 100 or fewer employees — make up 97 percent of South Carolina’s businesses and employ about 65 percent of the workforce, but sometimes their particular needs go unnoticed Also, small businesses have been leading the job growth during the slow economic recovery now underway, said Frank Knapp, head of the South Carolina Small Business Chamber of Commerce.
Nationwide, these businesses contribute about 50 percent of the nation’s gross domestic product and two-thirds of all new jobs, according to Experian, a credit reporting agency. Although small business are considered those with 100 or fewer employees, millions of business have fewer than five employees, including 67 percent of service businesses and 60 percent of all retail. Kelly Edmiston, a senior economist in community affairs at the Federal Reserve Bank of Kansas City, said in a report that economic development efforts need to focus on small businesses as well as large corporations.
“Creating an environment conducive to many small businesses may produce more jobs than trying to lure one or two large enterprises,” he said. “The hope is not only that new businesses will create jobs in the local community, but, through innovation, some new businesses may grow into rapid-growth ‘gazelle’ firms, which may spawn perhaps hundreds of jobs and become industry leaders of tomorrow.”
Everyone gives lip service to the importance of small business, calling it the backbone of the American economy, Knapp said, but political leaders often ignore smaller businesses and their needs.
“I’m not so concerned about regulations or even health care,” said Jimmy Bradenton, who owns a small convenience store in southern Greenville County. “I just want more people to come in every day. Demand is what small businesses need. You can’t hire anybody if you’re not selling enough.”
Knapp said the outlook for two issues that could most affect small businesses in South Carolina is not good.
The No. 1 concern for the organization is Senate Bill 316, which would eliminate the “most favored nation” clause in health insurance provider contracts, he said. With that clause in a contract, a dominant insurance company can require health-care providers to give them a better rate than other insurance carriers.
“It eliminates competition in health insurance,” Knapp said, adding that “we keep saying competition will drive down rates.” Studies in states that have eliminated the most favored nation clauses have not seen rates go up. In fact, they tend to go down as competition increases, he said.
“If we truly believe in competition holding prices down, we need to provide it,” Knapp said. “Small businesses are reeling under a decade of double-digit rate increases” and fewer are offering their employees insurance.
But he said the chances of moving the legislation forward this year seem small.
Knapp said his organization supports workers’ compensation law changes that would aid small businesses and a state tax credit of 35 percent for the installation of solar energy equipment on commercial buildings. It also supports the establishment of guidelines for the purchase and regulation of HVAC systems to ensure consumer safety. In addition, the organization supports the state providing $491,000 to the Small Business Development Centers across the state and state funding of $2.2 million for the South Carolina Manufacturing Extension Partnership to support 19 community health centers across the state.