28% of Small PA Businesses Expect to Hire

A survey of Pennsylvania small business owners indicates they are cautiously optimistic about the future.

According to the poll by the trade association, SMC Business Councils, 28% of respondents expect to increase employment while 65% anticipate no change in their workforce levels, and 6% will lay off employees. Tom Henschke, president of the organization, says 56% expect revenues to grow; 30% see revenues remaining the same, and 14% think their revenues will drop.
"This survey shows some increased optimism from small business in the form of same or slightly increasing sales, same or slightly better profit margin. However, it's not necessarily leading to new hiring, capital investments, expansion. It's still a sign to us that there's a tremendous amount of uncertainty."

The small business owners indicated the cost of the Affordable Health Care Act as far and away the top business challenge. 88% of SMC members listed it as one of their top business challenges, including the cost of complying with the taxes, new benefits and mandates that go along with it. Nearly six in 10 -- 58% -- consider the health laws to be a severe challenge to their businesses.

However, a report issued last week by Families USA, a national organization for health care consumers, indicates 161,000 small businesses in Pennsylvania, 4 million nationwide, with fewer than 25 employees are eligible for a tax credit to help cover the cost of health insurance premiums for their workers.

Business owners also listed the economy (34%), the cost of doing business (27%), taxes (38%), regulations (34%), and the cost of energy (23%) as other challenges to their success and ability to add workers.

Free Session on Funding Tech Companies

Small businesses and university researchers can get some help in obtaining federal funding to grow their high tech companies and develop new ideas. The first of the free information sessions hosted by the Small Business Development Center at Duquesne University is Tuesday, March 22nd, followed by three daylong programs.

Cynthia Laurash, Consulting Manager at the Small Business Development Center, says the money is made available through the Small Business Innovation Research Program (SBIR) and the Small Business Technology Transfer Research program (STTR). "So 11 federal agencies participate in these programs and they are required by law to share part of their R&D funds each year to solicit programs and research requests from small businesses."

Laurash says that both programs are under continuing authorization from Congress through the end of May. She says she believes Congress will work out a deal to keep the programs funded through the next 8-10 years because of their helpfulness to businesses.

State Senator Would Halt Tax Code Change

A measure in the Pennsylvania Senate would stop a 2009 business tax code amendment before it goes into effect.

The upcoming change to the state’s Sales and Use Tax would double the amount of business tax collections in a year, requiring businesses to file for taxes twice a month.

Senator Jim Ferlo says while that’s not a problem for big companies with plenty of resources, small companies that do their own accounting will see a sharp rise in “administrative costs.”

Ferlo says his new bill to stop this change would maintain the current method of filing taxes once a month.

“It does mean that the Revenue Department has to wait longer, longer being a month’s period of time, in order to receive the receipts of that revenue for investment and for obligations the state has incurred,” says Ferlo. “We are continuing to be in a financial dilemma, but I don’t know that that burden should rest solely on the shoulders of the small business community.”

The Highland Park Democrat says he’s heard outcry from several small businesses in his district, like The Original Mattress Factory and 43rd Street Concrete. His bill is currently in committee.

New Survey Reports Optimism from Businesses

A recent survey of Pennsylvania business leaders says that almost half expect improved profitability in 2011. The annual poll, conducted by First Niagara Financial Group, includes responses from 872 executives from private businesses throughout Pennsylvania.

Dr. George Evans, research analyst at First Niagara, says that there are significant changes in the report. He says that in Western Pennsylvania 51% of leaders predicted increasing revenues compared to 38% last year.

Evans says that this was the first time they asked business leaders their opinion on government aid and intervention. "Companies said 'look', and this is in the responses, 'we can't rely on government to assist us.' They're not that confident in government assistance at the state and federal levels....The lifeguard of of the businesses happens to be themselves and it's not going to be the state or government."

Evans says that while optimism increased, the survey reported that only half of business leaders are ready to commit to hiring more workers. In Western Pennsylvania only 25% of businesses are planning on increasing their labor force. He says this is because leaders would like to get their companies back on a more stable track before making the commitment to hire people.

New Corporate Class Would Allow More Options

A bill in the Pennsylvania Senate would allow certain corporations to sacrifice some profit in order to do social good, an avenue currently barred by corporate law. These businesses would be in a class of their own.

Senator Daylin Leach wants corporations to have the freedom to benefit their community, the environment or any other cause they see fit without fearing lawsuits from investors. Under corporate law in Pennsylvania, investors can sue a company when its board of directors knowingly makes a decision to sacrifice profits to do good.

Leach says these “Benefit-” or “B-Corporations” would be required to have a Director of Benefits to report additional information about the company’s not-for-profit decisions.

The Montgomery County Democrat says B-Corporations wouldn’t get any financial incentives.

“Once we start providing specific financial benefits, then we have to get into the sort of messy business of deciding what is good and what is not good. Some people think reducing poverty is good. Some people think reducing abortions is good, or whatever it is. The state shouldn’t be involved in deciding what is good; we let the investors and the corporations decide.”

Leach says he’s hopeful the bill will be passed swiftly because of its bipartisan support. He says liberals like the bill because it encourages corporations to support social justice, while conservatives like it because it would make the free market even more open.

The option to become a B-Corporation would be open to any company, but the government could not require a group to do so. Likewise, investors would only invest in the B-Corporation if they supported its not-for-profit ventures.

International Business Experts to Visit Pittsburgh

The Institute for Entrepreneurial Excellence at the University of Pittsburgh is hosting internationally renowned business experts to conduct workshops and programs for entrepreneurs in the Pittsburgh area.

The annual program starts tomorrow with Erik Qualman of Boston who will present "Socialnomics: The New Reality for Building Your Business and Your Brand" at the Rivers Club at One Oxford Center.

"Our guest speakers are dynamic, creative business advisers who travel all over the country and the world to help entrepreneurs tackle today's most pressing business challenges," says Amy Dugan, founder and associate dean of the Institute.

Also at the Rivers Club on March 25 will be Bob Hogan of Seattle presenting "Cha-Ching! Unlock Your Business' True Profit Potential."

Mike Lehman, Director of Marketing for the Institute, says that there are a couple things that differentiate the programs for this year with those from previous years.

"This year we've really been working on topics that address things that the entrepreneurs may not quite be comfortable with, but need to know more about," he says.

Those "things" include the growing social media aspect of business and preparing future generations in family owned businesses. Lehman also says that they are focusing on follow-up programs for the businessmen and women so that they can apply what they learned during the presentations by incorporating peer forums and a one-on-one consulting service.

"It's not just an isolated educational program. It has a follow-up infrastructure," Lehman says.

Other presenters include Ken Maer of San Diego, Jayne Pearl of Amherst, Charlie and Lori Lenzner of the Institute, Rick Tifone, Andrew Hayes, and David Blair of Pittsburgh, John Krahe of Erie, Rich Sorenson and Harry McNeely of St. Thomas, Mary Kay Plantes of Boston and Rabbi Steven Z. Leder of Los Angeles
There will be about one or two presentations each month and the program will conclude in December with the Members' Winter Social.

Pgh Tech Council Will Do Business in China

The Pittsburgh Technology Council plans to lead a business mission to China in May of 2011.

Technology Council President Audrey Russo says the group will probably be only about 15 people, so the Council can focus on forging relationships between specific businesses.

Russo says given the United States’ current investment levels in technology companies and China’s position in the world economy, now is a great time to visit the country on a business mission.

But Russo says China isn’t the only place of interest for the Technology Council...

"We've talked about India. We've been approached about doing business in South Africa. We get a lot of people with interests in the Middle East. We have the Middle East Institute here that has helped in establishing relationships in Amman, Abu Dhabi, places like that. This is really our first attempt to sort of get on the ground."

The PTC President says after the 2009 G20 Summit and Mayor Luke Ravenstahl’s October 2010 visit to China, Pittsburgh is beginning to capitalize on the global exposure it’s received.

PA International Week

Pennsylvania trade officials are trying to connect regional business leaders in the state with international representatives in an effort to increase Pennsylvania exports, attract international investments and create jobs for state residents.
Pennsylvania International Week is being held in Philadelphia this week and trade representatives from 30 countries from Europe, Asia, Africa and South America will be on hand to help businesses in the Commonwealth successfully export their products around the world. State Senator Andy Dinniman of Chester County says this event is an incredible opportunity for companies to learn about new markets and potential clients.....
"Business owners and representatives will be able to meet one on one with trade representatives from around the world. This event could make the difference between a struggling domestic business and a thriving international one."

Pennsylvania exports fell 18% between 2008 and 2009 but jumped 17 percent in the first quarter of 2010, as compared to the same quarter of 2009. Exports of manufactured goods rose by 16% compared to the first quarter of 2009. The leading goods being sent overseas include chemicals, primary metals, machinery, computer and electronic products, and transportation equipment. During the first quarter of this year, the industry that saw the largest growth in dollars was pharmaceuticals and medicines, up $632 million, or 101 percent.

Pennsylvania's top trading partners are Canada, Mexico, China, the United Kingdom and Japan.