Q: Steve – I understand that you like to keep your politics out of your column, but do you think either party is better for small business?

John

John

A: The general consensus is that Republicans are the party of big business and Democrats are the party of small business. I agree that by and large that is true, but it is also true that each party has ideas that can benefit big and small business alike, so generalizing does not always do us good.

For instance, Republican tax cuts can help almost any small business. Democratic plans to reign-in health care costs can help most big businesses. So the short answer to your question is that both parties have pluses and minuses insofar as all business goes.

To better answer your question then, it might behoove us to pull the curtain back a bit, look at reality, compare the “brand” of each party with that reality, and see what is revealed. So let’s do just that.

The Republican Brand

Republicans, especially since the Republican revolution and the Contract with America in 1994, have been masters at creating a strong brand. For good or ill (until recently) Americans have known what Republicans stand for (more on that in a moment.)

The essence of the Republican brand? Lower taxes, strong military, less regulation, pro-business, and social conservatism. The problem Republicans have today is that, like any brand, reality has to match the perception or there is a disconnect, and that in turn creates distrust.

For instance, you can’t very well say you are strong on the military and then start a war with too few troops, poor planning, and not enough body armor. When people begin to distrust your brand, they will look for another provider. In politics, they will vote differently, in business, they will shop elsewhere.

What about the Republican brand when it comes to business? Here the brand much more closely aligns with the reality. The Republican brand is that it is a party that is pro-business generally, and pro-big business specifically. The Bush tax cuts (income taxes, estate taxes, etc.) certainly helped big business a lot, but they sure didn’t hurt small business either.

In the area that small business owners consider the most important – health care – Republicans are not as strong. Sure, they have passed some legislation such as the creation of health care saving accounts, but that really has done little to help the big picture. On the other hand, other areas of interest to small businesses, such as continued business tax cuts, are more likely if the Republicans get their way.

The upshot is that Republicans are good for business, but the bigger your business, the better they are.

The Democratic Brand

While the Republican brand might be broken today, the issue the Democrats have is no less problematic, namely, they don’t even have a strong brand in the first place with which to break. Indeed, Democrats have been much less effective when it comes to letting the public know what they stand for. John Kerry’s infamous line “I voted for the war before I voted against it” is the essence of their problem.

What is the Democratic brand? You tell me. Helping the little guy, sure. Concerned about how the middle class will be able to pay for things like college and healthcare? Yes. But that there is no list of clear cut issues that come to mind when you think of the Democrats is the essence of their problem.

That said, it is when we discuss business that we do see a strong Democratic brand. Here the Democratic brand is that they are anti-big business and pro-small business; that is clear. Is it true? By and large, yes. Here the reality and the brand mesh quite well. Democrats have a rich history of trying to help small business with everything from increased SBA loans to business training to minority entrepreneurship recruitment.

A great business brand is based on reality. It is your promise to your customers. When trying to decide which party is better for business then, it is wise to look at the two parties and decide whether their brands and rhetoric match reality.

Today’s tip: The Small Business Administration came into existence when the Democratic Congress of 1953 passed legislation creating the agency, and the bill was signed by Republican president Dwight Eisenhower.