Taxes and high workers’ compensation costs make California less
hospitable for small businesses than other states, but for those
laboring in South County there are benefits to locating in the
area.
California ranks next to last in the Small Business
&
amp; Entrepreneurship Council’s
”
Small Business Survival Index 2007.
”
Taxes and high workers’ compensation costs make California less hospitable for small businesses than other states, but for those laboring in South County there are benefits to locating in the area.
California ranks next to last in the Small Business & Entrepreneurship Council’s “Small Business Survival Index 2007.”
Gordon Warner, owner of Precious Petals, two florist shops in San Juan Bautista and Hollister, said there are a couple of things that make owning a small business in California more difficult than in some other states.
“The costs are so high here, and the taxes, the workers’ comp, it makes it harder than it might be in, say, Nevada, or some Midwestern states,” he said. “But I live here, I’m not going to open a business in another state.”
Larry Cope, Gilroy’s economic development director, said there are benefits to being in California and specifically in the South County.
“On the positive side, there are 38 million people here, and if one of the requirements for a business is that you are close to your customer, well, you certainly have that here. And you can’t beat the weather.”
The downside, Cope added, is that this part of the state is an expensive area to live and to do business.
“It’s extremely expensive here, whether you are large or small,” he said. “There are a number of things that hurt, from a taxation standpoint, your workforce costs are more and there are developer impact fees that you don’t pay in many other states. At the same time, there are no incentives that some other states offer, things like tax abatements or cash grants. It’s difficult to compete against that.”
Wayne and Barbara Conrey, owners of Make It Mine in Morgan Hill, said they are happy they located their personalization business in the area.
“We love it down here,” Wayne said. “There’s not that much competition for our type of work. Other than this year, we’ve grown every year, a minimum of 10 percent. I guess we have a niche here. We’re also really happy with the Chamber of Commerce, recommending us and supporting us.”
Wayne said another benefit of being in Morgan Hill is that small business owners support one another. And, he said, the city is fortunate to have a satellite campus of Gavilan College downtown.
“They’ve been a wonderful customer for us, but they’re a great resource as well,” he said. “There are a variety of night classes. I’ve taken a Quick Books class. Having the satellite campus in town makes it an asset as far as I’m concerned.”
Ron Martin, who owns a Postnet franchise in Hollister, said his business services store has a good customer base, but he would like it to grow. The store offers a variety of services, including shipping, copying and printing.
“We bought an existing store that was two years old and we’re just about breaking even,” Martin said. “Usually, as a small business owner, you give yourself two years, but in today’s climate it does take a little longer, perhaps three to five years. What’s made it difficult for me is that the last three years, we haven’t shown any growth. I have a really good customer base, but there’s a building moratorium until end of this year, and we don’t have new customers. To build a business you need two things: a good foundation and new customers. And now I’m seeing competition coming in, a Staples and a UPS store.”
Support from the San Benito Chamber of Commerce is a help, Martin said, and he plans to join the downtown business association.
Cope said his organization can provide support for small businesses, assist them with financial services if needed.
“There are grant programs, both national and international, I’ve also worked with local banks,” he said. “We find out what the needs of the business are then try to match them up with grants or loans.”
Another form of business support is offered by Gavilan College. Terry Newman, director of contract and community education, said the college offers training programs to local businesses.
“There are a lot of different options,” she said. “Say you own Joe’s Papermill and Production Company, and you want your employees to have some training. We will come out and meet with you and find out what it is you’re looking for. We can then do an off-the-shelf program or we can customize a program to your specific needs.”
Newman said there are also financial options, several different grants that usually have a 50/50 match, but the match on the business’ part can be that the business provides the facilities for the training or pays the employees for attending the training.
Time management and customer service are popular training programs, she added.
