3 Things You Should Know About Small Business: September 5

NEW YORK ( TheStreet) -- What's happening in small business today?

1. Small businesses are still hurting on the jobs and revenue fronts. Businesses with fewer than 20 employees created 30,000 jobs in August, according to Intuit ( INTU) Payroll's August Small Business Index, with the initial, unadjusted August read lower than the small business job creation level in July. The data is based on approximately 83,500 small business customers of Intuit Online Payroll.

Intuit's Small Business Revenue Index also shows revenues at the nation's smallest businesses continuing to reflect soft economic conditions. Overall, small businesses saw revenue decline in July, the fifth consecutive month of revenue decline, with the biggest decreases in the accommodation/food services and retail industries at -1.1% and -0.7%, respectively.

For the second month in a row, the construction industry saw a decline in revenue. Since the construction industry accounts for about 8% of employment among all companies and roughly 20% of employment for small companies, any change in this sector is important, Intuit says.

Health care and social assistance had the smallest revenue decline at -0.4%, however, the rate of decline was "10 times more than the 0.04 percent decline seen in the previous month," Intuit notes.

"This month's indexes indicate that small businesses are hurting," according to Susan Woodward, the economist who worked with Intuit to create the indexes. "The employment rate has been slowing since April, and revenues have been falling since March, declining 2.7% from its most recent peak. At an annual rate, this is a decline of just over 6%, which is substantial."

Among the industry sectors tracked by Intuit, the hardest hit recently has been small business retail, whose revenue has declined 6.1% from January to July. The sector with the smallest decline is health care, which fell 1.3% from December 2011.

Based on August's numbers and revised national employment data from the Bureau of Labor Statistics, Intuit revised upward previously reported jobs created in July to 45,000 from 35,000 jobs.

2. How to bring back small-cap IPOs. While the JOBS Act provided some relief for small companies seeking to go public, Alan Patricof, a venture capitalist focusing on startups, shares his solutions to the remaining "structural" impediments in the public markets for small firms in a Fortune article.

The first issue is that there has been a decline in underwriters that specialize in what would now be described as "small underwritings," a direct result of SEC rulings that took out much of the incentive for traders and market makers on small deals, Patricof says.

The high costs and burdens of being a small public company trying to comply with Sarbanes Oxley present another problem, Patricof says, even with minimal relief from the JOBS Act.

"While many of these rulings were intended to protect investors and reduce costs, they had the opposite effect, in many instances raising the cost of capital for most small companies in their growth phase," and ensuring that small companies would list in markets outside the U.S. where regulatory burdens weren't so high, he writes.

Patricof's solutions include increasing the number of underwriters focused on underwriting deals of less than $50 million and increasing the "aftermarket support" for these companies, which will only be done by "increasing incentives which translates into restoring tick sizes and commission rates so that traders and salesmen can be attracted to focusing their attention on small companies."

3. U.S. Open's self-contained event a bust for local Queens businesses. While thousands of tennis fans flock to Arthur Ashe Stadium in Queens, N.Y. every year to watch two weeks-worth of the world's best tennis, local businesses say the additional U.S. Open foot traffic isn't making its way into their establishments, according to DNAinfo.com.

Down the street, business at the Roosevelt Sports Bar was slow, for instance. Manager Michael Fann says that business hasn't increased very much, despite being just a few blocks from the stadium and despite the U.S. Tennis Association claiming that the event generates more than $750 million in annual revenue for the New York City region.

Some business owners complain that the event is too "self-contained," meaning that patrons can exit the nearest subway station and walk into the event center without setting foot on a Queens street. Once inside fans have access to food, drinks, retail stores and ATM machines.

The Queens Economic Development Council is working to improve local area spending. The council has a tourism booth at the U.S. Open with the goal of pointing fans to area restaurants and businesses in the borough, DNAinfo.com says.

One industry that is benefiting from the event is area hotels.

-- Written by Laurie Kulikowski in New York.

To contact Laurie Kulikowski, send an email to: Laurie.Kulikowski@thestreet.com.

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