An OPEN LETTER to The Minister for Small Business

Dear Minister,

As a small business, working with other small to medium sized businesses I welcome the appointment of a minister to focus on small business. I believe that the people who have taken the risk to start businesses during the downturn should be rewarded with support.

If a small business wants to grow the first area that the business owner will need to address is people. Employing people is a scary step to take. There are costs involved, Advertising, recruitment, Employers PRSI; & then there are hidden costs. Extra insurance, The Safety Statement and there is the issue of compliance with the National Employment Rights Authority around contracts, terms of employment etc. For many people this is just too much. They either decide to stay small and not employ or they just use sub contractors. These are Real disincentives to business.

I recognise that there are some great supports for employers out there but each one is limited I hope that the new government will do something quickly to encourage uptake of these schemes.

I wonder why nobody is publicising Revenue Job Assist. I think it is a fantastic programme. It benefits both the business and the employee with additional tax relief. In short it means that for the employee they only pay PRSI and social charge in the first 2 years and the tax eases up over the next 2, while the employer also gets extra tax relief over all 4 years. The scheme only has one drawback. That is that the person must have a year unbroken on welfare. Even a few casual days worked excludes the participant. I hope that this will be reviewed and amended to encourage people to get back to work and small businesses to employ.

I also like the new Employers PRSI Exemption. It’s great that we can save 10.75% extra tax on each job. But that’s only for the first year. Couldn’t it be 100% for the first year and 50% for the second? That would also encourage us.

For lots of small businesses the first thing they do is employ a family member, often a spouse, partner or a teenager. Often this is because it is the only thing they can afford to do. Most businesses don’t realise that the same tax allowances and welfare supports apply to family members. Often it is tax beneficial to employ a spouse as this will allow him or her to claim an extra tax allowance and increase the household income without paying significant extra tax. Less of the employment law issues apply, there is reduced risk of a compensation claim and therefore reduced insurance premium. Why is this not being promoted by state agencies?

There is Work Placement Programme (3-9 months) and the Internships Programme (12 months with training and a financial top up) operated by FAS but these are often seen as abusive by new employees. We need to encourage potential employers and employees to look at these as routes to co operation and future growth together.

Even the staff in the Department of Social Protection are not always aware of schemes like the part time job option where the employee gets welfare top up because they are in part time work. Family Income Supplement is another support for employees if new employers can’t afford high wages. Very few employers or potential employers are even aware of these two options. Could our DSP Facilitators promote these options to encourage small businesses to grow?

These are just a few of the things we could do at a cost neutral base and the information is freely available..... If you know what you are looking for...... and where to look. Publicity is the Issue. Please tell everyone who might create a job in 2011 about these things. All of us need to help Ireland get back to work.

Peter Cronin welcomes comments on this article businessdoctor@alaymont.com Follow me on Twitter: twitter.com/business_dr