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Entrepreneur, June, 2002 by Chris Sandlund

YOU MAY NOT BE ABLE TO MAKE THE TRIP TO WASHINGTON EVERY TIME YOUR VOICE NEEDS TO BE HEARD, BUT LUCKILY, THERE ARE PLENTY OF LOBBYISTS AND ADVOCATES ITCHING TO STAND UP AND SCREAM "BUT WHAT ABOUT THE SMALL BUSINESSES?!"

CLINTON IN A ADMINISTRATION OFFICIALS FRETTED DURING: the run-up to the 1995 White House Conference on Small Business. "There was a fear that the NFIB [National Federation of Independent Business] would take over, and that they would use it as a forum to embarrass the administration," says Mark Schultz, the conference's executive director.

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At the same time, Schultz was fielding coneerns from the NFIB. The organization that represents more than 600,000 small businesses was worried that the Clinton administration was trying to influence the nonpartisan, Congressionally authorized event.

Schultz negotiated past each side's neuroses. The conference proceeded, distilling the needs of small businesses. Its findings were widely supported. Congress and regulatory agencies have acted on 90 percent of the 1995 agenda, according to an August 2000 report by the SBA, Actions have included the passage of the Small Business Regulatory Enforcement Fairness Act of 1996 and increased access to capital. Capitol Hill staffers note that the legislation usually was supported by large majorities among both Republicans and Democrats, often passing with no opposition.

Seven years later, Schultz's vignette neatly summarizes the current state of Washington's small-business lobby. The groups that support the cause of small business--including, among others, the U.S. Chamber of Commerce and National Small Business United (NSBU)--generally face a receptive audience on Capitol Hill.

"One of the first things the Senate told me [during confirmation hearings] is that small business is not a partisan issue," says Hector Barreto, the SBA's current administrator. "There's not a Republican or Democratic solution to small-business problems."

And yet, in the midst of this love fest, there is a mini-war going on. To read some of the press releases and speeches of certain Washington small-business groups (cough, NFIB, cough), the Capitol is in the grips of a life-and-death struggle. You, the small-business owner, must act now to stop them (cough, Democrats, cough).

As in 1995, Democrats still remain wary of the NFIB, the single most powerful group claiming to speak for small businesses in DC. Even Republications, who received 96 percent of the NFIB's political contributions in 2000, acknowledge it as the 800-pound gorilla that throws its weight around and dominates the small-business debate through its aggressiveness.

Even so, other groups are frequently much more effective at initiating change in Washington and in working both sides of the aisle. Understanding why hat's the case helps explain who's speaking on your behalf in the corridors of power.

But first, you need to know something about Washington.

The Sausage Factory

You remember the drill from high school civics class: The legislative branch passes the law, and the executive branch administers it. That means interest groups in Washington get two whacks at the laws impacting your business.

They can persuade a congressperson or senator to introduce a bill that changes current law. Last year, for instance, Congress eliminated the estate tax after years of small-business groups railing against it. In broad terms, badgering Congress is what the NFIB and most other small-business advocacy groups are all about.

It's a smart focus. Every member of Congress has hundreds of small businesses in his or her district or state. "They're the ones who can put signs in the window and talk to customers about you," says Phil Eskeland, Republican policy director for the House Small Business Committee. "Politicians ignore small business at their peril." That helps explain the motherhood-and-apple-pie support for most small-business legislation.

Congress, however, generally passes laws in broad outline, then asks the civil service to the details. It's a little like the marketing department sending engineering a general idea for a new product. How Washington's permanent bureaucracy--the nation's engineers--converts the idea into reality requires plenty of decisions. Each choice is open to an interpretation that small-business lobbyists try to influence. They want the regulation's impact to be as beneficial to your business as possible.

Late in 2001, for instance, the IRS raised the limit for using cash accounting to $10 million in annual revenue after persistent lobbying from numerous organizations, notably the Small Business Legislative Council (SBLC). "It's not the kind of thing that makes headlines, but it needs to get done," says John Satagaj, the SBLC's president and general counsel. (See March "Tax Talk" for more on the accounting change.)

Roughly speaking, the two approaches are revolution (legislate) or evolution (regulate). You may also recall from civics, however, that the Founding Fathers made evolution the default setting for our government-- although revolution is a lot more fun.

Business Services Industry

Have your say

Entrepreneur, June, 2002 by Chris Sandlund

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