Letters to Bush

Re: The entrepreneurial owners of successful, fast-growing companies have some suggestions, compliments, and a few grievances to air when it comes to doing business under the Bush administration. FYI, Mr. President!

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Dear President Bush: You've said that "the role of government is to create an environment in which the small-business owner can grow to be a big business, in which people with the entrepreneurial spirit flourish, in which job creation is strong and evident." We agree with you. Small businesses make up more than 99% of all employers, account for 52% of the GDP, and provide two-thirds of net new jobs, according to the Office of Economic Research. Taken as a whole, they're an economic powerhouse.

Unfortunately, the voices of small-business owners don't always get heard in Washington. They are too busy to latch themselves on to the D.C. cocktail party circuit, where they might forward their agenda with some local bigwigs. And they don't have millions of dollars to hire lobbyists who could bend your ear from time to time. When it comes to political influence, small firms lack access.

This, we decided, was a situation Inc. could help rectify. So we asked some of our readers--the owners of successful businesses--to write you letters, explaining what's on their minds when it comes to doing business under your administration. For the most part, these letters do not address the macroeconomic forces that affect big and small companies alike. Instead, they discuss specific ways in which you could help improve their businesses and foster a more entrepreneurial nation. We hope you will listen.

Dear President Bush:

For the most part, America is a magnificent place to advance entrepreneurialism. In the spirit of advancement, and as the founder of a 15-year defense services company now also at the forefront of homeland security, I offer these suggestions.

Please rejigger the Fair Labor Standards Act, which established the 40-hour workweek, so that it allows for more flexibility in work schedules. For example, one of my employees would like to work 60 hours one week and 20 hours another for personal reasons. That's fine with me, but because she's an hourly employee, I would have to pay her time and a half for the 20 hours she works overtime the first week, which I'm not willing to do. FLSA leaves us only two choices: salaried exempt or hourly nonexempt. This situation came before Congress a few years ago and remains a bone of contention between the donkeys and the elephants. You could resolve it.

Open up the Salary Reduction Simplified Employee Pension (SARSEP-IRA). This tax-deferred retirement plan that lets both the employer and the employee contribute to an IRA is one of the fairest and simplest plans on the planet--but drop the IRS provision that prevents its use for companies with more than 25 employees. The limit only forces us to spend money on big investment houses to manage 401(k) programs.

I am pleased and proud to have such a strong leader in the White House.

Sincerely,

R. L. Manganello
CEO
Windmill International
Nashua, N.H.

Dear President Bush:

One of my concerns is the lack of affordable debt financing for privately held service companies like mine, one of the world's largest telephone answering services, with more than 2,000 employees serving 40,000 businesses in the U.S. Although interest rates are very low, getting access to money at low rates can be difficult. Service companies often don't have the tangible assets, like real estate and equipment, that banks (and their regulators) require as collateral. Our staff is our main asset. But banks won't accept people as security (and the employees would get really angry if banks tried to auction them off).

The government sponsors programs such as the Small Business Investment Corporations, which are privately managed financial institutions that finance only small businesses and are backed with both private capital and government loans. However, in my experience, these companies are run by venture capitalists who often look for returns in excess of 25%, which isn't inexpensive. These programs can help businesses grow, but the costs are often too high both economically and personally--because SBIC companies get equity in the company and often take positions on the company's board of directors.

Small businesses like mine need better programs that allow us to take advantage of the low cost of money. If you could make programs like that available, small companies would start to spend money and further stimulate the economy.

Respectfully submitted,

Gary A. Pudles
President & CEO
AnswerNet Network
Princeton, N.J.

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