Thursday, October 4, 2012

Which Presidential Candidate is Right for Automotive Dealerships

The social media sites were hot last night during the presidential debate between Former Massachusetts Governor Mitt Romney and current President Barrack Obama.  Since the election of former President Bill Clinton, our nation has been evenly divided over which man is the best person for the job of leading our nation amongst the world.

As a small business owner who helps companies, specifically automotive dealerships, build their business and "Win Customers for Life"; I have some very strong opinions about who I feel should become the next elected President of the United States of America.  However, I will let the reader research and decide who I am for, and who I am against.  (James Schaefer) This blog is meant to encourage voter participation and look at one philosophical point of view of each candidate and who is the best person for business.

I will try to take a simple common sense approach and put forth the facts as if I were hiring for an executive position within my own company.  This essentially is what Americans will be doing in November when they go to the polls.  However, just like in the real world; some people would not make good business owners or managers, and some people need to reevaluate whether they are making the right decisions when they vote.  Now remember, I am writing this blog about one of the many issues that is very important to me and my company.  I am not writing this issue concerning healthcare, defense, or government sponsored programs.  Therefore, a truly informed voter should look at all of the issues individually and way them to how their interest would be affected by the outcome of this year's election.

The following point and position is described referencing Small Business and each candidate's position.  Hopefully, by laying this out in this format the reader will be able to ask questions of their own and vote for the best candidate that will help them and their interest.  This is why the United States is so great.  We all have a voice in who will govern us for the next four years.

Small Business:

The fundamental question is what is a small business? 

My definition is a business that was started from an individual or a group of individuals that developed their company because there was a need for their services or products.  It is a business that is not financed by government or publically traded on the stock market.  A small business is a private company, and how much money the company makes is NOT a factor.  The reason that I feel the amount of revenue a company makes should not be a factor whether the business is considered a Small Business or not is because the risk completely falls on the individual or group of individuals who have created the company.  They could fail if the business fails, but if it succeed they should benefit as well.  In addition, I believe that the higher the revenue the company receives, the more opportunities they are able to provide for future employees and other companies that provides goods or services to that company.

Now the government has a different definition of Small Business.  The Small Business Association (SBA) defines a small business as one that is independently owned and operated.  It is organized for profit, and is not dominant in its field.  Depending on the industry size standard eligibility is based on the average number of employees for the preceding twelve months or on sales volume averaged over a three-year period.

Most Automotive Dealerships should fall under this definition of a Small Business.  However, until recently most dealerships were not classified as a small business.  The Recovery Act of 2009 reclassified 89% of automotive dealerships under the SBA; however, the gross revenue receipts were put at $8.5 million.  My contention is that this is not fair to the Automotive Industry.  There should not be a cap placed on any private business in terms of revenue received nor should a cap be placed on these automotive dealerships for profits gained.

The simple reasoning is that if an automotive dealership is successful; they employ sales people, service technicians, administrative personnel, accountants, parts specialist, and vendors (like my company: To read more about DeliveryMaxx select here).  Their staff brings in more income which they will spend stimulating the economy.  The vendors they employ are able to hire more employees and the cycle of economic growth will continue in a positive direction.

Presidential_debate_automotive_jobs_deliverymaxx_james_schaefer

The candidates' positions:

President Obama believes that a Small Business is classified by how much revenue a company brings in.  He believes that a company making $250,000 or more should be taxed at a higher rate according to CNNMoney.com.  Under this premise, the government would be able to collect more taxes and thus be able to provide more programs for Americans.

Governor Romney believes that taxes are necessary, but tax breaks for Small Businesses would create more jobs.  He has stated that the 3% of the highest grossing revenue companies are responsible for 80% of the jobs that Small Businesses provide.  In short his method for creating more jobs is to give a break to these businesses and hope those companies will hire more people to help the business continue to experience growth.

I understand each candidates philosophical position on the issue and respect their and others opinion.  The president believes that a company which makes more money should pay more taxes to help the country and its government backed programs.  The governor believes that leaders of successful business will practice good ethics, and thus provide a piece of the pie for more individuals.

A new study by Ernst and Young projects that a tax rate hike will kill 710,000 small business jobs. Depending on who is elected will determine if this result comes to fruition.

I can tell you this.  The larger my company becomes, the more people we will be able to hire.  The more profit my company earns, the more benefits we will be able to provide individuals.  The more benefits we are able to provide to employees, the better our retention of employees become.  If we are taxed at a higher rate, our company will not be able to provide as many jobs otherwise.  It is true, I will put more dollars into my account if my company continues to be successful.  Contrary to the president's speach about small business "you didn't build that business" in July, I used my own money to start this company.  My family and our employees depend on the success or failures of this company.  I am sure many automotive dealerships will face the same concerns.

Hope to see you at the polls in November.