Focusing on small businesses

Published 11:11 am Wednesday, March 8, 2017

Ask people how they would describe a small business and they would probably respond “locally owned stores” or “businesses such as home construction companies.”

In Virginia, however, under the current definition, 94 percent of the businesses operating in the state qualify as small business. It would be easier to define businesses that do not qualify — those that have over 250 employees and have sales receipts over $10 million in sales. That would only be 6 percent of businesses in Virginia.

All other businesses could qualify to be SWaM businesses — Small, Woman-owned and Minority-owned businesses. If these businesses applied for SWaM status, they could compete for state contracts and they would be given an advantage over similar businesses that do not qualify or have not applied to qualify. Even worse, a company with 240 employees might be given an advantage over the business that has only 10 employees.

This year, with support from the National Federation of Independent Businesses, I sponsored legislation that would redefine what qualified as a small business. My legislation called for not one definition, but rather multiple definitions based on the type products or services a company provides. One size does not fit all.

The Senate approved my legislation, but, by the time the bill made it to the House, it caught a fever. The administration and politics weighed in and the bill was not voted out of a House subcommittee. The issue will be back because many more are now focused on the problem.

In one case, locally, a small business had been selling items to the state for years. Because the business was not a microbusiness, the sales were taken from his business and awarded to a microbusiness. The original provider now sells those items to the microbusiness at the same price they used to sell to the state.

The microbusiness in turn, marks up the price and supplies to the state. His profit comes as added expense to you, the taxpayer. My legislation would limit the reseller to five percent over the lowest bid. McAuliffe will probably veto the legislation.

Frank Ruff represents Lunenburg in the state Senate. His email address is