Businesses need a break to form, grow

Is now a good time for small businesses to hire workers? Deena Pierott, founder of Urban Entrepreneurs Network, a Vancouver-area advocacy group for entrepreneurship, finds business-building the perfect outlet for her energy. Yet in a March 21 interview, I found that this dynamic businesswoman views hiring employees as a daunting challenge. Her hesitancy to add employees, typical of many who venture into start-ups, explains why small-business hiring has yet to emerge from the deep recession.

Pierott, a Vancouver resident since 1996, formed two businesses here when her job with the City of Portland ended several years ago. Capitalizing on her knowledge that many businesses want a more diverse work force, she founded Mosaic Blueprint in 2007 to place qualified minority job-seekers into professional positions. Discovering a secondary need, in 2009 she founded Urban Entrepreneurs Network of Southwest Washington (UEN), now consisting of 28 small-business owners and entrepreneurs who meet monthly in the Clark County area to develop relationships within the broader business community. Pierott credits fellow entrepreneurs Eloisa Bolivar of LMS Cleaning Services, Kevin Tabor of RynoMotors, Leiliani Russell of Pathways to Excellence, and Clark College students Travone & Artista Roberson as UEN leaders.

Some of the owners had to be convinced, she says, that networking with the broader business and government sectors could help them. One owner of a small flower shop became convinced when learning that floral displays are common at conventions and meetings, and that networking through UEN opened up markets with customers such as the Port of Vancouver.

Many of the “solopreneurs” in UEN represent minorities , but Pierrot argues passionately against depending upon racial-minority status. She believes UEN will help the most by including entrepreneurs regardless of ethnic and racial backgrounds. She contends that becoming state-certified as a Minority Business Enterprise, though helpful, is no substitute for building strong relationships within the business community.

A blend of energy, vision

Pierott also serves on Vancouver’s Small Business Advisory Council and the Washington State Commission for African American Affairs, is a board member of Community Choices, and is active in the NAACP. She epitomizes the energy and vision to create a wave of new jobs here, but Pierott turns cautious when asked about hiring employees for her own business. Her hesitancy is typical. Adding employees exposes a new venture to uncertain risks and costs. With rising taxes and fees at state and federal levels, business owners are fearful to take more risks. In Pierott’s case, complex IRS reporting requirements are enough to delay adding to her payroll, while for others, the plethora of state employment filings poses a strong deterrent.

The new federal health care reform bill will come with a host of ways for small-business owners to stumble into noncompliance. Full of measures to “help” small business, it features different compliance plans for various sizes of work force. Penalties of thousands of dollars per employee may accrue and bring visits by the IRS if a business does not meet complex requirements.

Is it any wonder that, according to Bureau of Labor Statistics data, small-business hiring has dropped more steeply in the current recession than in 2001? In that recession, net employment by small businesses fell by 371,000 jobs, only 12 percent of the total job losses, whereas now small-businesses account for 36 percent of job losses, according to a March 2010 analysis by the Heritage Foundation.

Evidently, serious changes have occurred in our economy since 2001, and they haven’t been good for small business.

As a society, we pay lip service to entrepreneurs like Deena Pierott as constituting the engine of our economy, but all too often our actions tell a different story. If we want the private sector to help rebuild our work force, we’re going to have to lighten the burdens of business formation and growth.

Ann Donnelly, a Vancouver businesswoman, is a former chair of the Clark County Republican Party. E-mail: adonnelly7@comcast.net.