Joe & Co.

Small businesses were catapulted into presidential politics this month with the sudden fame of an Ohio man who became known as “Joe the plumber.”

Like farmers and homeowners, Main Street business people have long been a key part of the nation’s political landscape. Small-business men and women also have long been considered the backbone of the nation’s economy.

But the term “small business” covers a lot of territory, ranging from the hot dog vendor who runs his business from a pushcart on the street to companies with hundreds of employees.

Indeed, the U.S. Small Business Administration counts some businesses with up to 1,500 employees, such as petroleum refiners and ammunition manufacturers, as small businesses for the purposes of awarding government contracts. The typical limit, however, for small businesses in most industries is 500 employees.

Small businesses are the growth engine of the economy, said Demming Bass, vice president of marketing and public policy for the Gwinnett Chamber of Commerce. He said Gwinnett County added more jobs between 2000 and 2006 than any other Georgia county, largely because of the growth of small businesses.

“Gwinnett does not have the Home Depots, the Coca-Colas,” Bass said. “Gwinnett has a lot of growth companies with 100, 200 [or] 500 employees that you haven’t heard of.”

The business group hasn’t endorsed a presidential candidate or surveyed its members about the candidates’ proposals. But he said many small businesses are worried about the same issues: the economy, taxes, cost of health care and government regulations.

Here’s a look at three local small businesses, ranging from 10 employees to hundreds of workers, and what their owners have to say about some of the campaign issues:

Tax-and-spend’s OK, just cut out the waste

Joel Roth doesn’t see red when he hears that his taxes could go up, but he loathes government inefficiency.

So he had a different reaction than you might expect from a small-business owner when he heard about the anti-tax complaint that made “Joe the plumber” an instant icon in the presidential campaign.

Sure, Democratic candidate Barack Obama’s plans to raise taxes for people who make more than $250,000 would “definitely affect me,” said Roth, who is president and majority shareholder of Atlanta-based Fulton Supply Co. The 68-employee industrial supply distributor is one of 10 small businesses he bought after leaving the corporate world. Together, they have about 1,500 employees, he said.

“For the good of the country, I would not be opposed to a tax increase, with one stipulation,” he said. “I’d like to see less waste, less corruption and less inefficiencies.”

Roth said he is tired of seeing government efforts he considers costly, wasteful or poorly conceived, such as the Iraq war and the $700 billion Wall Street bailout.

The former executive at Gulf & Western, who has written a book on how businesses can cut costs, was so unhappy with the recent bailout plan that he sent a memo outlining his own proposal to Treasury Secretary Henry Paulson and other top government officials. Under his proposal, the bailout money would have gone to fund a new government entity that would take ownership of homes headed into foreclosure in exchange for covering the monthly payments. But the affected families would be allowed to continue renting the homes and to buy them back from the agency later.

“These people have to live somewhere,” Roth said.

The longtime businessman is concerned about the stagnant economy’s effects on his businesses, but his biggest worry is finding good employees.

Partly because of that chronic issue, he takes a different approach to running his businesses than most companies.

Employees at Fulton Supply Co. and the other businesses own much of the stock, he said. The employee stock ownership plans serve as part of the workers’ retirement benefits, along with separate 401(k) retirement plans. Some retiring employees have cashed out with “hundreds of thousands of dollars” of company stock, he said.

The companies also provide employee health coverage that could be significantly affected if either candidate makes good on his promise to overhaul the nation’s health care system.

“I don’t think [Sen. John] McCain’s proposal is practical,” he said of the Republican candidate’s plan to tax company-provided health care benefits and provide an offsetting tax credit of up to $5,000 per family. “There’s no way you can get family medical coverage for that,” he said.

FULTON SUPPLY CO.*

> Founded: 1914

> Employees: 68

> Revenue: $20 million

> Product: Industrial supply distributor

*Part of a group of 10 diverse companies partly owned by Joel Roth with about 1,500 employees and $185 million in sales.

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Slowdown means trimming excesses

Over the past two decades, Brian Perdue has expanded his wife’s hair stylist business into a small empire with five shops and more than 175 employees in Gwinnett County.

Monday, he’s opening a sixth shop in partnership with two former Deloitte & Touche consultants whom he has been mentoring for two years. The new shop, NiaNicole Salon, adds a new affiliate to complement Grayson-based 124 Group’s three brands, Salon 124, Genesis Salon and the Process Institute of Cosmetology.

But the 46-year-old president of 124 Group fears that tax increases for high-income individuals could crimp his plans for growth.

“What most people don’t understand is the profits from the company don’t go into the owner’s pocket. It’s reinvested back into the business,” Perdue said.

Such concerns have become a campaign staple for Sen. John McCain, the Republican candidate, since Barack Obama’s famous encounter with a reluctant taxpayer who has come to be known as “Joe the plumber.”

Perdue, who is no relation to Gov. Sonny Perdue, said a tax increase on income over $250,000, as proposed by the Democratic presidential hopeful, would slow the growth of his business.

“Would you rather have a little bit of money that you are taking from me to give to somebody else, or would you rather I give them a job?” said Perdue, arguing that tax increases are “not the way to success.”

He said he’s not familiar with the two candidates’ health care proposals, but added that the high cost of employees’ medical coverage is a challenge.

“There’s only so much you can pass on to the customers in higher prices, so that is a big problem,” he said.

Perdue said his biggest worry, however, is the economic downturn.

“The one thing I cannot control is the economy, and I think we have gotten ourselves into a mess,” he said. It looks like it’s going to be the worst recession he’s seen since he went into business in 1991, he said. He added that he wouldn’t have chosen to open another salon now if he had known how severe the credit crunch was going to be.

Still, he’s confident that he’ll do OK and could even gain some market share if he concentrates on making his company more efficient.

“I’m very positive about it,” he said. “I get to actually slow down and work on the business.”

124 GROUP

> Founded: 1991

> Employees: 175-200

> Revenue: $5 million-$10 million

> Service: Operates hair salons and cosmetology school.

—- Russell Grantham

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Candidate who offers support, lower taxes gets her vote

Even though the small local chain of consignment boutiques she founded is holding steady, something has to be done to help small businesses stay afloat, Psycho Sisters CEO Angela McLean said.

“Small-business owners support this country,” said McLean, who opened the first Psycho Sisters shop in 1993. The chain’s three stores, in Little Five Points, Sandy Springs and Cartersville, are separately owned, but McLean owns the corporation.

“We need to be encouraged to do what we do, in order to run businesses successfully and keep our country in sync with the freedom that the founders of this country presented to the people.”

McLean, a 43-year-old undecided voter, said she’s trying to decide which presidential candidate —- Republican John McCain or Democrat Barack Obama —- will work the hardest to create incentives and lower taxes for small-business owners in a troubled economy.

She is concerned about health care, as well. She makes less than $60,000 a year and said she can’t afford to provide health insurance or other benefits, including 401(k) and pension plans, to the 10 employees at the Psycho Sisters stores. She said Obama’s idea for a national health plan exchange seems well-rounded, but she’s also skeptical.

“When I follow what Obama and McCain promise, I get more confused as to who to vote for,” she said.

“I really liked Ron Paul,” she added. “Perhaps I will investigate Libertarian ideas next.”

McLean said the Psycho Sisters boutiques, which feature high-end used clothing and trendy accessories, are doing relatively well, compared with some other small businesses in the area. Sales aren’t skyrocketing, but they haven’t slowed from previous years, either: Each shop sells about $10,000 to $20,000 in merchandise monthly.

“We have a win-win situation,” she said. “People shop here when they want to party and celebrate. But when there’s a crunch in the economy, they shop here out of necessity instead of leisure.”

Although two Psycho Sisters boutiques —- one in Lilburn and another in Marietta —- have closed in the last year, McLean said they failed because of their locations and changing demographics in those neighborhoods, not the current economic crisis.

Just this month, McLean launched another business, online decal shop myjollyfamily.com. Because of the credit crisis, it’s much more difficult to get funding these days than it was in the early ’90s, she said.

“It was extremely easy to get a loan for Psycho Sisters with very little paperwork,” she said. “Now, I cannot get a loan for myjollyfamily.com.”

PSYCHO SISTERS CONSIGNMENT BOUTIQUES

Founded: 1993 by Angela McLean

Employees: About 10

Estimated sales: $120,000 to $240,000 annually per store

Service: The stores, in Little Five Points, Sandy Springs and Cartersville, offer high-quality used clothing and accessories, as well as some new items. The stores have separate owners, but McLean owns the corporation.

—- Michelle Ewing