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ObamaCare’s Shock to the Small Business Economy

With 70% of America’s jobs coming from small businesses, it’s hard to imagine the long-term affect ObamaCare will have on the economy. Whether or not owners and managers are aware, labor resources will be a major consideration when hiring and even firing employees.
With every downside, there is generally upside: ObamaCare can be the perfect marketing vehicle for companies looking to work directly with small businesses. Education is the most positive form of marketing and offering solutions to small businesses in the context of ObamaCare can make a difference.

Understanding ObamaCare Fundamentals

ObamaCare, also known as The Patient Protection and Affordable Care Act (PPACA), is the latest medical reform bill designed to bring benefits similar to those provided by Medicare to people under the retirement threshold. This is the first policy since the introduction of Medicaid more than half a century ago – a time when teens considered The Grateful Dead pop music and stood in line to see The Sound of Music.

ObamaCare intends to reduce taxpayer costs and spending for individuals who require health care but unfortunately do not carry health insurance.  Macroeconomically, the hope is that the policy reduces unnecessary deficit spending and improves general health through preventative care. Futhermore, under PPACA, insurance providers must cover all applicants from businesses and offer the same rates regardless of pre-existing conditions or gender.

What ObamaCare means for Local Businesses

Companies with an average of 50 or more employees will be required to provide health coverage all full-time employee applicants. The applicants for the program will be used to determine the company’s 2013 average rate which is then applied to company’s annual tax rate.

Heidelberg Restaurant ImageEva, for example, is the owner of Heidelberg Restaurant in NYC, my favorite German beer garden. Lets look forward to early January of 2014 and assume that Eva has reduced her staff from 53 to 43 because the holiday rush has subsided. Throughout most of 2013 Eva employed anywhere from 40-55 employees.  Eva understands that ObamaCare employee policies take affect in 2014 and interprets that ObamaCare does not make Heildelberg responsible for her current 43 employees’ health benefits and she elects to forego offering them coverage.  Eva has made a simple mistake: her 2013 average number of full-time employees was 51. If the IRS audits Hieldelberg Restaurant, she will be required to pay taxes to cover the health insurance costs of her employees and likely will endure heavy penalties.

Many businesses do not understand these taxation details and the ramifications of staffing and accounting practices in 2014 and beyond. Small business owners especially don’t have the time to investigate the numerous changes to the tax code and will most probably be surprised by these changes.

For owners, revenue growth and hiring is linked but not necessarily aligned. Small business owners are now more responsible for their full-time employees (which is not at all a bad thing), and the government has elevated the risk for businesses if they fail to meet requirements.

Using Obamacare to market to small businesses

With ObamaCare comes a new opportunity: small business owners are confused and concerned about these policy changes in Washington.  Owners are running their business and need help working under this new context.  Growth is the paramount goal for these businesses and framing marketing in the context of how products and services can help owners offset the negative impacts of ObamaCare can go a long way.  How can you frame your conversation in such a way that is beneficial to these business owners?

The answer: educational marketing.

Create a knowledge resource for these owners to comprehend and leverage ObamaCare for optimally improving small business operations. You can easily build an affinity with potential customers by highlighting and exemplifying the importance of ObamaCare. You will be able to inherently link your own value propositions by answering the market’s questions. A contractor can now pitch not only service expertise, but also how small businesses can save on resources and eliminate the stress of reorganizing a business’s structure to fit more full-time workers. 

Think about your customer and repurpose ObamaCare implications into an educational experience with your value proposition as an underlay.  Make your pitch implicit – if you are doing a solid job framing the consequences of ObamaCare then your customer will self-suggest your service – it’s like Inception.

We brainstormed some content ideas that present an obvious value case that speaks to the decisions made by small business. Flesh out some idea into a piece of content and offer it to prospects. And please feel free to plagiarize the below!

  • The Handbook to Discovering, Negotiating, and Managing Contractors and Part-Time Hires
    • So many small businesses have never hired other than full-time. Give them insight on how to hire contractors and part timers.
  • Save Time and Money With Part-Time Employees and Contractors
    • If there is one thing that will resonate with small biz, it’s saving money.
  • Growing Your Business With A Scientific Mix of Full-Time, Part-Time, & Contract Hires.
    • Feeling ambitious? Come up with a template that prospects can use.
  • Don’t Get Audited Because Of How You Hire Workers
    • Use fear tactics to entice.
    • Who can market this knowledge? Accountants, lawyers, management consultants, HR firms.

Author Profile: I am a Marketer at Radius. I graduated from the University of Pennsylvania with a degree in Economic History and Consumer Psychology. I am a graduated member of the Wharton Venture Initiation Program, Wharton’s incubator  and entrepreneurship program, founded a brand strategy company, and was part of several successful startups. I like Tweeting, and Instagram.

 

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