Local, State, and Federal Policies and Procedures that Negatively Affect Small Businesses

Local, State, and Federal Policies and Procedures that Negatively Affect Small Businesses

In Takia Ross’s last episode with me, she tells me the story of how a local policy technicality paired with bad information severely damaged an arm of her business, Accessmatized. As business owners, we have to look at our local laws as they impact us on a personal and professional level. What Takia experienced was largely due to outdated policies and outdated technology.

Listen to the podcast episode here:

Can You Give Us a Personal Example of How a Government Policy or Law Can Destroy Your Business? 

Ruthie: It’s just gone by so fast, but this is our last episode together! I think what we’re talking about today is something that people are going to easily be able to commiserate. Today, we’re talking about local, state and federal policies & procedures that negatively affect small businesses. We’ve seen some of this play out in the PPP loans, and my husband and I have talked about it. 

You mentioned that these policies can harm small businesses. I was just wondering if you could give me an example, because humans love stories and stories are what they remember. 

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Takia: So I’m not going to bring up the whole PPP situation just yet, but I am going to share this story. Back in January of 2018, I got a parking ticket on Pretty Mobile and it had an error. They had the wrong expiration date on the ticket; they said my tags were expired and they weren’t.

I battled with the city about the ticket. Cause I’m like, “I’m not paying this ticket! The ticket is wrong.”

Ruthie: So you were parked where you were supposed to be parked, but they gave you a ticket for expired tags? 

Takia: And they weren’t expired. By the time I had realized it, it had stacked up a lot of fees so it was like hundreds of dollars. I’m like, “No, you know, I’m not paying this.” And they were like, “Well, in order for you to fight it in court, you gotta pay the ticket first and then you can go to court.” And I said no. 

Then Emergency Construction Started

So months have been going past, and they began construction where my studio is. We were physically unable to move any of our vehicles. It was an emergency construction, but they were still giving us tickets.

Our vehicles were still being ticketed, though we were physically unable to move because the streets were blocked off. You could walk on the street but you couldn’t drive off. 

Ruthie: So they didn’t tell you to come move your vehicles because it was an emergency, but kept ticketing you repeatedly? That’s absurd.

Takia: Towards the end of it, we were able to move our vehicles. I moved my vehicle and they came and impounded it, because they had given all of the tickets. For about 6-8 months, we were battling with the city of Baltimore over the parking tickets in the impounding of the vehicle. 

Went to Court. Found Not Guilty!

We had in total about 7 or 8 parking tickets. We went to court for all of them and we were found not guilty for every parking ticket that we got. 

We went to the impound yard to pick up our Pretty Mobile and it had been destroyed. The city said that they weren’t going to pay for it. 

Ruthie: What?!  

Takia: It was vandalized, and we have pictures and video of it getting gutted. Everything was gone. You shouldn’t lose your business over a parking ticket. 

Now, I’m fortunate that I had other avenues, but imagine if you are a food truck and that was your only way. 

Ruthie: You find a way to win, but you lose. 

The Serious Harm These Outdated Policies Are Causing

Takia: Firstly, the policies or procedures are outdated. Secondly, people are being penalized for being poor. So you’re being penalized because of your inability to pay. You go to court and fight them, only for them to find you not guilty and then they’ll give you your money back. 

Ruthie: But not paying for your vehicle, which wouldn’t have been destroyed if there hadn’t been a technicality in the first place. And when you look at today’s technology and how fast it can move, it doesn’t make any sense at all that somebody couldn’t easily check to see if your tags were expired or not. There’s no reason at all why that should have turned into a whole court thing. 

We have drones in warehouses that can instantly scan a small tag and communicate that information all the way around the world. But you have to go all the way to court, wasting your time and everybody’s time, just for you to be found not guilty. 

It sounds like some of these local state, federal governments need to look at more technology consulting, process management firms. That is awful.

This Is Not an Isolated Incident

Takia: A lot of small business owners are facing this. Not just the citizenry,  but it’s happening to our community members as well. People are losing their property and livelihoods over technicalities like this. Some people can’t bounce back from it. Okay, mine was a vehicle,  but people are losing their homes because they didn’t pay their water bill. 

This is what’s preventing a lot of neighborhoods where people of color reside from passing along generational wealth to their families.

Takia Ross, Owner of Accessmatized

My home is being taken, which is something I could have passed down for generations and it could have continued to be a source of wealth for us. A piece of my business was gone and then I couldn’t market it. I can’t make money now because you took a piece of my business. And all you can say is, “I apologize.” 

The Definition of “Small Business” is Jacked Up

And it’s not just the PPP process that exacerbated the challenges that many small businesses are facing. I say small businesses, I’m not talking about that “500 or less employees” definition. Comparing that type of business to something like a solopreneur is like comparing apples to oranges. That’s another thing that we need to bring up. 

PPP loans were available to businesses that have 50 or less employees. So the Shake Shack can get it, but, but the mom and pop store on the corner can’t. So we have to think about the definitions of small businesses. 

LLC Status Protects You, Up to a Point

As you think about doing your taxes, LLC sole proprietorships are basically passthrough organizations. That’s basically you. There is no designation between your LLC and you. It’s just a passthrough to you. 

Ruthie: I mean, it’s a shield. I’m trying to protect my house and stuff. 

Takia: Yeah, but you have to make sure that you are separating your business from your personal. Because even if you have an LLC, if you use your business account or if you’re not accurately accounting for your business finances and separating it from your personal finances, they can still come after you. 

You have not clearly defined that you are not your business. Those are things that you don’t learn about until it happens to you. It took me 15 minutes to get my LLC. 

Ruthie: Well, it took me a bit longer. I wasn’t happy that they automatically expedited it, therefore automatically charging me extra money. 

Takia: But you don’t get any information about what it means to be an LLC, so we have to do a better job of knowing what it means, doing the research, and knowing the policies and procedures around what we plan on doing. 

So you need to become acquainted with your zoning, board, parking, the DL, the department of public works, and all of that stuff. We don’t think it matters. All of that matters.

You put a decal on your car? Now you have a commercial vehicle and you can’t park in some places. 

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