By Aaron Allen
The Seattle Medium
Are you an entrepreneur and if so do you know and understand what it takes and the cost of doing business in the Puget Sound?
The environment in Seattle and the surrounding municipalities for small business is a tricky and intricate path to navigate. As they say success is in the details. From overhead costs, to leases and property, taxes, it is more than just getting your business license and tax number. A business owner must be financially aware and prepared for the ebb and flow that is capitalism.
“Over the last few years this environment in Seattle has changed a lot. It’s no longer how much volume your gonna do, its how much taxes are going to come out the volume,” says Theo Martin, owner of a local staffing company and Island Soul Restaurant in Seattle. “Before you do anything you better know how much your gonna spend on your business.”
The responsibilities of business ownership is a delicate balancing act. Martin says that employee taxes and employment ordinances that are based on the number of employees a business has can dictate whether business can save money through exemptions or not.
According to some business owners, Seattle’s Paid Sick Leave Law although in the best interest of the employee, can be problematic for employers as another management issue. The Paid Sick and Safe Time Ordinance (PSST) requires employers to provide paid sick and safe time for employees. PSST can be used for an employee’s absence from work due to illness, medical appointments, or critical safety issue, including domestic violence, sexual assault or stalking. The ordinance applies to all employers with more than four full-time equivalent employees. All employees are eligible for the new benefit, including full time, part-time and temporary workers.
“As an employer, for example, if you have to staff an employee a closing shift and they want to return the next morning for work, even if an employee request such hours……within this new ordinance, scheduled to kick in in 2019, such scheduling will not be permitted,” said Martin. “Breaks in scheduling will be mandatory.”
Small businesses or as some like to refer to them as micro-businesses are dealing with not only a new presidential administration but also local government and their business tax policies. Small business possesses a variety of tax responsibilities that can, if not monitored properly, burden an upstart or even established businesses. From the B&O tax to payroll taxes to property taxes a business must be detailed oriented so as not to miss a step and find themselves owing the IRS at the end of a fiscal year.
“One thing a business owner must do to prepare his or her business is to be consistent and stay prepared capital wise for inflation and the possibility of tax increases that occur in the business environment,” says Guy Thomas, owner of Philly’s Cheese Steak restaurant in Seattle.
According to Thomas, upfront capital is a necessity for those rainy days.
“It is important that one accrue a substantial capital base if you want to be successful in business,” state Thomas.
Small Black business in the Seattle area have gone through decades of change from a vibrant community to a dwindling chosen few as the tax codes have made business ownership a challenge to say the least.
A positive attribute is that in Washington there are no income taxes, however there are the business and occupation or B&O tax, sales tax and payroll taxes that can affect even hinder a growing business.
Taxes differ per business, restaurants such as Philly’s are responsible for not only business and payroll taxes but that must be prepared for increases in utilities, property and lease fees and even taxing products as Seattle mulls over taxing soft drinks or sugary drinks.
“Our most recent challenge [for a service industry business] right now is the ‘soda tax’, sugary drinks tax,” says Martin. “Right know I purchase syrup for soda and for every 12 pack I pay a tax and that tax by the end of the year adds up to the point where my product is cheaper than the tax.”
These examples show just how much detail and responsibility you must be aware of if you want to be successful in business ownership.
Most businesses rely on professional tax counsel to help them navigate the tax policy and laws to aid in maintaining their books. One of the most frustrating aspects of taxations is the idea of being taxed on several levels. For example, if you have employees not only are you paying your personal payroll taxes but employee payroll taxes as well.
“It’s very confusing, as if there exorbitant and duplicating,” states Jeffrey Taylor, who owns an insurance agency in Columbia City. “I pay payroll tax for myself and my employees and they pay taxes so there’s like a triple tax that happens. So now I’m responsible for double the amount of tax that I used to pay.
“All I know it’s confusing and it’s twice as much as I used to pay,” says Taylor.
While these are new challenges to small Black-owned businesses in Seattle, DeCharlene Williams, owner of DeCharlene’s Beauty Boutique in Seattle’s Central area and founder of the Central Area Chamber of Commerce, says that business environment in Seattle has been tough for Black-owned business for years.
A very astute and feisty business woman, Williams migrated to Seattle in the mid-sixties and established herself as an entrepreneur amidst racial discrimination. According to Williams, because her business was in a prime real estate location she experienced discrimination in efforts to undermine her and relieve her of that location.
“When I first arrived here and started my business, the city made every effort to derail my vision,” said Williams. “If I have to give any advice to up and coming business minded people, stay fair to your customers, be diligent and detailed with your paperwork and finances and never allow anyone or anything to deter you from your business becoming successful.”
“Plan your work, then work your plan,” she adds.
Most of the tenured Black businesses in the area are finding that the environment is becoming hostile but at the same time it is relative. Seattle’s cost of living has grown exponentially and that growth can affect your business, depending on how prepared you are will affect your ability to sustain and maintain a business in the Pacific Northwest.
Business ownership in a Capitalistic society to some is freedom, but freedom comes at a cost. It is said, “The dream is free but the hustle is sold separately.”
