The Identity Politics of "Small" Business

Posted by $ mshupe 1 year, 9 months ago to Business
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The label Small Business is imposed on the value, employment and wealth creators by those who have never done any of those things.

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  • Posted by $ Thoritsu 1 year, 9 months ago
    We had a contract for equipment we developed an delivered to the Army. It worked flawlessly. We never missed a delivery date in four years. We were sole-sourced, and we reduced prices in accordance with our costs with every set of equipment delivered.

    The Army needed to increase their "Small Business" acquisition numbers, so changed this contract to a "Small Business Set Aside", thinking the equipment was simple. This meant that only a small business could bid on the next delivery.

    The Army then had to buy some of the IP from us, since it was ours, not developed by them. Then the small company winning could not build the units. The Army had to hire us to teach the small company to build them. They delivered about 6 months late, and went out of business on this now fixed price contract due to their high cost of inefficient production.

    The Army then rebid, again as a Small Business Set Aside. This time the small business succeeded, late again, and the Army got the product at about a 15% price increase over our last delivery.

    This whole system is complete nonsense. Little companies can not deal with the ludicrous, non-value-added requirements, bureaucracy and red tape, but people think big companies are fleecing the government.

    The people fleecing the taxpayer are the government, with lazy, inept bureaucrats, seeking to preserve their phoney-baloney jobs, and a landslide of rules developed to fix millions of little individual problems and enable inept people to perform with mediocrity.

    They should fire the lot, and start over with a clean slate of competent people and rules, which is what would happen if this was a private company in competition with others in the market.
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  • Posted by brkssb 1 year, 9 months ago
    Public Policy has certainly led us down the primrose path with the SBA and the minority-owned and the privileged and other set-asides fostered with the MBA. The government thus set aside all regard for the right item at the right place with the right service at the right time at the right (fair and reasonable) price with right quality and right quantity from the right source.
    In dimming memory (circa 1993), there once were over 400 small businesses in the Minneapolis area supporting the likes of 3M, Unisys, Raytheon, and the US Navy, Army, Air Force, and Marines. One of these small outfits produced the wire bundles used in very complex and expensive aircraft. Another designed software for very special applications.
    Years earlier, citing emergency procurement “exceptions", I was able to seek the right item at the right price for urgent delivery, and one such was buying a common R-22 40-cent washer the lack of which tied a $100 million destroyer to a pier. I suspect that warship would still be at the pier in today’s world.
    Categorically, the businesses should be classified as competent or incompetent along the lines of the seven “rights” but foremost answer the question of satisfying the right requirement.
    Agree, fire the lot of government bureaucrats and their counterparts in business, ban the lobbies, and consider acquisition matters to be subject to laws of tort rather than public policy.
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  • Posted by $ blarman 1 year, 9 months ago
    While it is an interesting article, I think that there are two unmentioned points which directly feed into the sentimental undercurrents. The first is the concept of "Big Business" as a competitor or even antithesis to "small business". Among the notions attached to big business are such as 800-lb gorilla, market dominance, and stock value but also more negative associations with inertia, poor customer service, and governmental lobbying and preferential treatment. Second is a general antipathy toward "business" in general as being selfish, greedy, cronyist, etc.

    I would argue that separating things into "small" or "big" (or even "mid-sized") business is an example of the same kind of "divide-and-conquer" techniques that have been used to create an us-vs-them mentality and have enabled disastrous policy decisions like the income tax. Instead of worrying about the size, let's focus on the fact that it is business and leave it at that.
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  • Posted by $ mminnick 1 year, 9 months ago
    I found this info at:
    Article is discussing SBA determination of Small Business classification.
    "Size Standards
    When evaluating the size of a business, the federal government takes into account the average of annual receipts or the average number of employees. Generally, large businesses are those in most mining and manufacturing industries that employ 500 or more individuals, or those that do not manufacture goods and have an average of $7 million in annual receipts. There are exceptions to these standards in some industries.
    Industry Variations
    According to the SBA, some manufacturing companies can have up to 1,500 employees and still be determined to be small businesses. In mining, large businesses are those that have 500 or more employees. In the construction industry, heavy construction contractors and general building contractors have a large business if there are annual receipts of $33.5 million, while dredging companies with average annual receipts of $20 million or less are small businesses, and specialty trade contractors have a small business if the average annual receipts are $14 million or less.
    The annual receipt allowance is larger In the construction industry overall because the SBA takes overhead costs into account. The highest annual receipt size allowed for some small businesses in a service industry is $35.5 million. Such service industries include architectural or engineering services.
    Businesses engaged in research and development or in environmental service are the only types of service businesses in which the government considers employee size to determine if a business is large or small. Most retail companies are large businesses if annual receipts average $7 million or more, but a car dealer, an electrical appliance dealer, or a grocery store may be a small business if it has $35.5 million or less in average annual receipts."
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  • Posted by $ 1 year, 9 months ago
    Yes, it is a badge of honor, and as you point out, the tech revolution is rendering the SBA and other administrative statists irrelevant.
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  • Posted by freedomforall 1 year, 9 months ago
    Don't forget that entrepreneurs can also access international, inexpensive, and creative labor through web sites like fiverr. It's an amazing resource for small business.
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  • Posted by freedomforall 1 year, 9 months ago
    The label "small business" is a badge of honor.
    If it wasn't for big biz lobbyists using government favors to suppress competition and give them unfair advantages, the playing field would be more level and many big businesses would become small businesses as the SBOs beat the pants off them in a free market competition.
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