Originally created 03/03/05

Small-business owners find Georgia friendly



Brad Kyzer has been an independent businessman in Georgia for more than 25 years. Like many, he's mostly pleased about the state's business climate.

"It's not the most friendly, but it's not near the most difficult," said Mr. Kyzer, a State Farm Insurance agent in Augusta whose family business ventures also include a bottled water distributorship and a company that seals wood decks and concrete patios.

Statewide, a majority of Mr. Kyzer's colleagues also consider Georgia pro-business, according to a survey released this week by the National Federation of Independent Business/Georgia.

Through a telephone survey of randomly sampled small-business owners, or those with 250 or fewer employees, the federation reported that 51 percent considered the state a supportive place for small business while 14 percent did not - a net score of 37 percent.

The survey has a sampling error of plus or minus 5 percentage points.

Georgia fared slightly better than some of its neighbors in the survey.

A net 32 percent of Florida's participants described their state as supportive, and a net 31 percent of owners had a favorable rating for Tennessee.

As part of the group's inaugural Small-Business Conditions report, the federation also asked owners what they saw as their biggest problem.

More than 20 percent in Georgia said insurance, while taxes, big-business competition and inflation tied for the second most common responses.

Mr. Kyzer's insurance agency is established, and his family's two other ventures, a Culligan water distributorship and a Sealmaxx wood/concrete/masonry sealing franchise, are poised for success, too. But he said taxes and other costs of doing business are still a burden on small businesses such as his.

"It's pretty mind-boggling, all the places (your revenues) go before you can keep some of it," he said.

Savannah businessman Ray Gaster has his beefs with costly health care insurance and the level of tax breaks set aside for large companies.

But overall, he said, the state's business climate is pretty helpful for someone like him.

"If I had to rate it on a scale of 1 to 10 - 1 being anti-business and 10 being total capitalism - I'd give Georgia about a 7," said Mr. Gaster, who has owned Gaster Lumber & Hardware in Savannah for 20 years.

"The state is not friendly when it comes to inventory tax," he said. "This is the only state here in the South and one of the few in the country that has an inventory tax, and that is a drain on business. They need to phase it out or do away with it."

Melody Harrison, the state director for the independent businesses group, said she is trying to get state legislators to form a study committee this summer to discuss changing the current inventory tax, which is assessed every year at 40 percent of the cost unless businesses have received a local exemption.

Ms. Harrison also said major concerns of the group's members have been split in recent years between the struggling economy and rising health care costs.

Now that economic conditions appear to be improving, business owners are focusing on affordable health care insurance for employees.

"Some people cannot afford the health care coverage where the large companies can," she said. "That's always a concern."

Despite the concerns, a majority of the small-business owners questioned in Georgia were optimistic about their market conditions - with 18 percent describing them as very good and 44 percent calling them good.

About 75 percent of them thought that business prospects for the next three months will be positive.

The state's manufacturers also should see solid growth despite a slight slip in production numbers last month, according to another survey released Tuesday.

The Georgia Purchasing Managers Index for February was 54.7, a 0.6 point drop from January, according to a survey of 70 factory managers by The Econometric Center at Kennesaw State University.

The report showed that while new manufacturing orders and production dropped, finished inventory increased 13.4 percentage points and employment saw a 3.1-point improvement.

Business Editor Damon Cline contributed to this report.

Reach Vicky Eckenrode at (404) 589-8424 or vicky.eckenrode@morris.com.

SMALL-BUSINESS SURVEYHere are some responses from small-business owners who took the recent survey by the National Federation of Independent Business/Georgia:

Over the last three months, have you upgraded the technology or changed the processes you use in order to make your business more productive?

 •  Yes: 43.4 percent

 •  No: 55.1 percent

 •  Don't know: 1.4 percent

Over the last three months, have you made one or more expenditures to purchase capital equipment or business vehicles, or to upgrade your facilities?

 •  Yes: 38.9 percent

 •  No: 60 percent

 •  Don't know: 0.6 percent

 •  Refused to answer: 0.6 percent

Do you currently have one or more job openings?

 •  Yes: 19.7 percent

 •  No: 79.4 percent

 •  Don't know: 0.9 percent