Small Business Under Fire

February 05, 2007 11:00 pm
A new survey lists health insurance costs as the No. 1 issue facing california's small businesses. (Illustration by Bryant Anderson/The Daily Triplicate).
A new survey lists health insurance costs as the No. 1 issue facing california's small businesses. (Illustration by Bryant Anderson/The Daily Triplicate).

By Cornelia de Bruin

Triplicate staff writer

It's not easy owning and running a small business.

Just ask Tom Griffin, owner for 17 years of Griffin's Furniture in Crescent City.

He's battled just about every issue included in a survey of small business owners. Crescent City businesses received their copies about two weeks ago and are returning them to the San Francisco-based Small Business California organization now.

"I had one line of furniture stop selling to me because they couldn't ship enough (volume) to my store," said Griffin. "Freight costs drive up the cost, and it's hard to compete against companies in Oregon, a no-sales tax state."

Griffin doesn't offer health care to his employees because its cost "is through the roof."

With only 180 responses to this year's survey in, health insurance's cost easily is leading as small business' No. 1 concern, said Scott Hauge, president of the San Francisco-based organization. Eighty-seven percent see health care issues as a big concern, a trend that has consistently been high and holds the Number One position early in the process.

Pat Medina, head of the local chamber, would agree in spades.

When she worked in Humboldt County before moving here as executive director of Chamber of Commerce, Crescent City-Del Norte, she had to stretch "maintenance medications" to last longer.

The cost of the health care insurance her employer — a small business — offered her didn't match the salary level she needed to pay for it.

Maintenance meds are those a person's physician prescribes for an ongoing condition such as arthritis.

"Health care is a big issue for employers, and so is physician recruitment," said Medina. "Workers' comp is always an issue for a small business because even if you have no injuries, your costs can go up."

Surprisingly, however, early survey result show a whopping 75 percent of small businesses whose owners have responded offer their employees health insurance.

The result startled Hauge.

"That's a high percentage," he said. "Many of these companies have as few as one or two employees."

He theorizes that having health care might give a business a competitive edge over those lacking it.

Small business owners also have indicated they support shared responsibility for health insurance over single payer cost arrangements by more than 10 percent.

Early survey answers place workers' comp-related issues in second place, at 68 percent.

Also making an appearance this year was immigration issues, with 66 percent of small businesses concerned, Hauge said.

Business regulation issues also rank high.

That's a concern Griffin shares. He deals with a couple regulatory agencies, one that has visited him to make sure the mattresses he sells are in compliance with state requirements.

California, he said, has the strictest regulations in the nation for materials used in mattresses.

"The playing field will level off when similar regulations are implemented nationwide, but until that happens I would have to say it's a lot more work here to run a business," he said.

Hauge hopes to receive 750 responses for the survey's final tally. That should begin later this month.

State's handling of issues looked at unfavorably

When Small Business California first surveyed the state's small business owners in 2005, about 68 percent of them responded that they thought "things were seriously off track" here.

A year later that percentage dropped by 10 percent.

During that same year, 2006, none of the respondents thought that state leaders were handling issues related to California's economy, overall or small business climate "excellently."

The previous year, four respondents rated state supervision of and response to economic issues was excellent.

Top issues during both years remained health care cost and availability and the quality of public education, but the number of business owners strongly agreeing with their placement grew by 13 percent.

Top Concerns

The number of California small businesses that they say an issue hampers their ability to be profitable:

•Health insurance costs - 88%

•Worker's comp - 68%

•Educating workforce - 66%

•Immigration - 66%

•Infrastructure - 61%

•State regulations - 56%

•Energy costs - 49%

SOURCE: Small Business California

See the Results

To view small business survey results from 2005 and 2006, view Small Business California's Web site: www.smallbusinesscalifornia.org.