Entrepreneurship Apparently Getting Even Harder

In Business Las Vegas, January 12th, 2007

Staying in business can be tough, especially for small firms.

Health insurance premiums continue to rise along with the price of gas and water. The small business index, which measures the economic environment faced by small businesses, is at a nine-year low. Businesses need to do all they can to preserve Nevada’s welcoming business environment.

The major concerns for businesspeople in 2007 are health care, energy costs and the cost of doing business, according to Kara Kelley, president of the Las Vegas Chamber of Commerce. The same concerns trouble small businesses across the nation, according to the Small Business Index, released by the House Small Business Committee’s ranking Democrat, Nydia Velazquez. Those concerns took a toll in 2006, Velazquez said.

A report by Velazquez’s office found that energy prices remain high, and the cost of health insurance premiums rose 80 percent nationally over the past six years, while the prime interest rate has doubled, making it harder for businesses to expand. These are named as leading causes for stunted small-business growth nationwide.

“Small businesses inherently face a myriad of challenges in pursuing successful ventures,” she said. “What the most recent SBI shows is that the already difficult job of entrepreneurship is getting even harder.”


Those issues apply in Nevada, according to Kelley.

“I think if you talk to any businessperson, particularly small-business people, health care is really the No. 1 issue facing them,” she said. “It’s about the ability to provide some sort of health care and it’s an affordability issue.”

Kelley said it is one of the key issues to watch on the national political stage in 2007.

“Unfortunately, those of us advocating at the state level, there’s not an enormous amount the states can do to decrease the costs of health care premiums,” she said. “It’s a huge cost and one that will surpass even 2007.”  

Transportation is another big-ticket item. The highways of Nevada are in desperate need of work, but there is not currently enough money to fund the projects. Kelley said the chamber supports using some of the budget surplus to fund the most critical projects. But that will not be enough in the long run. Attorney Scott Scherer of Hale Lane law firm said other options include an increase in the gasoline tax or the cost of registering vehicles to help pay for road improvements.

The cost of energy is also a major issue for businesses in Nevada, where the summer heat sends electric bills skyrocketing for months.

Another issue small businesses are eying nervously is the minimum wage. Voters passed an initiative this year raising the minimum wage to $6.15.

However, that law pegged the wage amount to $1 over the national minimum wage, currently $5.15 an hour. If Congress raises the national minimum wage to over $7 an hour, as Democrats have promised to do, the minimum wage here could turn out to be more than $8 an hour. It may not be implemented, though.


Scherer said the law’s language is convoluted in parts and because it is so unpopular with businesspeople, there is a good chance someone will sue to overturn the law just as business owners are attempting to do with the smoking ban.

Kelley said many community members who voted for Nevada’s new minimum wage law were not aware it was linked to the national minimum wage. She said it shows a need in the business community to educate not only businesspeople but their employees about what is going on in politics and how it could affect the economy.

In 2007 the business community will have to be more proactive in defending its interests. She said pro-labor advocates have had success in promoting legislation that is bad for business because they are better organized and able to take the time to make their views heard in public.

“The small-business person who is working the counter and then going home and doing the accounting and payroll at home, they don’t have time to picket for a cause. They don’t have time to go down to the county commissioner’s office to provide a visual impact for an issue being decided on the local government level,” she said. “So it’s very, very critical that businesspeople do what they can to educate themselves and educate their employees about the issues that are important to business. People need to know that this is where economic wealth is created and that is where jobs are created. If the small business sector isn’t healthy, unemployment is high and discretionary income decreases.”

Businesspeople also need to let their elected officials know where they stand on issues. Kelley said that the Legislature is becoming increasingly unfriendly toward business and that the healthy business environment Nevada currently enjoys may not last forever if people do not put pressure on the Legislature.

“I think it’s time that small-business people really need to acknowledge that politics and public policy have a huge impact on their ability to do business and meet payroll. And they need to understand that to keep a business healthy it takes effort beyond just running their business,” Kelley said. “They need to understand they need to be vocal, either through a chamber or organization memberships or through their independent actions. Small businesses are the No. 1 creators of jobs and their voices are important. But they need to be educated about the issues. And it’s important that their employees are aware of the issues and how they affect them.”

According to Kelley, other issues small business people need to be aware of in 2007 are:

• Disaster preparedness.

• The public employee retirement system.

• Immigration reform, to allow more skilled workers into Nevada.

• Land management.

• Education.

Stephanie Tavares covers small business and law for In Business Las Vegas and its sister publication, the Las Vegas Sun. She can be reached at (702) 259-4059 or at stephanie.tavares@lasvegassun.com.