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Introductions Scott Budman NBC 11 Technology & Business Reporter Welcome Raghav Lal Senior Vice President, Small Business, Visa USA Then and Now: Comprehending the New Economy Guy Kawasaki Managing Director, Garage Technology Ventures The Role of Small Business Nigel Ives

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Introductions l.jpg

Introductions

Scott Budman

NBC 11 Technology & Business Reporter


Welcome l.jpg

Welcome

Raghav Lal

Senior Vice President, Small Business, Visa USA


Then and now comprehending the new economy l.jpg

Then and Now: Comprehending the New Economy

Guy Kawasaki

Managing Director, Garage Technology Ventures


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The Role of Small Business

Nigel Ives

Vice President, Western Region, NFIB


California small business conditions l.jpg

California Small Business Conditions

Bill Dunkelberg, Chief Economist, NFIB


Outlook for general business conditions in 6 months for the us pct better pct worse l.jpg
Outlook For General Business ConditionsIn 6 Months for the US (PCT “Better” - PCT “Worse”)


Small business optimism index for the us monthly 1986 100 l.jpg
Small Business OptimismIndex for the US (Monthly, 1986=100)

Seasonally Adjusted


Nfib california outlook sales good l.jpg
NFIB California OutlookSales “Good”


Nfib california outlook overall business climate supportive l.jpg
NFIB California OutlookOverall Business Climate Supportive


Nfib california outlook market business conditions good l.jpg
NFIB California OutlookMarket Business Conditions “Good”


Nfib california outlook overall business conditions improving l.jpg
NFIB California OutlookOverall Business Conditions Improving


Nfib california outlook outlook for your business good l.jpg
NFIB California OutlookOutlook for Your Business “Good”


Nfib california outlook have job openings l.jpg
NFIB California OutlookHave Job Openings


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California Policy Climate: Review and Outlook

Lawrence McQuillan, Director, Business and Economic Studies,

Pacific Research Institute




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U.S. Economic Freedom Index

41 to 50 (10)

31 to 40 (10)

21 to 30 (10)

11 to 20 (10)

1 to 10 (10)


Cost of doing business in ca 30 above western state average l.jpg
Cost Of Doing Business In CA 30% Above Western State Average

Relative cost of doing business

1.5

1.30

.16

.06

.03

.05

<.01

1.00

1.0

19%Higher

127%Higher

77%Higher

105% Higher

25%Higher

0.5

0.0

Averageof Western

States

Taxes

Electricity

Propertycosts

State

Regulatory

Employeecosts

California

Source: CB Richard Ellis, Energy Information Administration, Milken Institute, Beacon Hill


Ca state regulatory costs are more than double those of the average western state l.jpg
CA State Regulatory Costs Are More Than Double Those Of The Average Western State …

Regulatory Cost Index (100=US Avg.)

Bain Regulatory Cost Index (US=100)

Very high (>150)

200

High (120-150)

Moderate (100-119)

Low(85-99)

150

Very Low (<85)

US Average = 100

100

Western State Average = 83

50

0

CA

TX

WA

NV

OR

AZ

UT

Western states calculation includes: AZ, CO, NM, NV, OR, UT, WA

Source: US Census, Harris Interactive, EPA, US Dept. of Labor; Small Business Survival Index, OR Dept of Consumer and Business Services; Bain analysis


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WA Average Western State …

WA

MT

MT

ME

ME

ND

ND

MN

MN

VT

VT

OR

OR

ID

ID

NH

NH

NY

NY

WI

WI

MI

MI

SD

SD

MA

MA

CT

CT

WY

WY

RI

RI

IA

IA

PA

PA

NE

NE

NJ

NJ

NV

NV

OH

OH

UT

UT

DE

DE

IL

IL

IN

IN

CA

CA

WV

WV

CO

CO

MD

MD

KS

KS

VA

VA

MO

MO

KY

KY

NC

NC

TN

TN

AZ

AZ

OK

OK

NM

NM

AR

AR

SC

SC

GA

GA

AL

AL

MS

MS

TX

TX

AK

AK

LA

LA

FL

FL

HI

HI

Cost of doing business in CA 30% above Western state average

Regulatory Cost Index (100=US Avg.)

Very high (>150)

High (120-150)

Moderate (100-119)

Low(85-99)

Very Low (<85)

Source: US Census, Harris Interactive, EPA, US Dept. of Labor; Small Business Survival Index, OR Dept of Consumer and Business Services; Bain analysis


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Federal regulatory costs per employee for small businesses are $7,647.

45% higher costs for small firms than for large firms.

Differential drivers:

Tax Compliance

67% higher

Environmental Regs

364% higher

Source: “The Impact of Regulatory Costs on Small Firms” by W. Mark Crain, 2005

Small business suffers most from regulation


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Super-Sized Verdicts In California are

100 Largest Verdicts in U.S. (2001 and 2002)

$11.3B

$38.1B

100%

Other

Western States

80

Non-Western

60

States

40

20

CA

0

2001

2002

# of CA

verdicts:

16

14

Source: National Law Journal’s 100 largest verdicts (2001, 2002)


Live free or move l.jpg
Live Free or Move are

  • In every year from 1993-2002, more jobs and firms left California than entered.

    Source: “Are Businesses Fleeing the State?” by David Neumark, Junfu Zhang, and Brandon Wall, 2005


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Organize are

Reform . . .

Exempt small business from more federal and state regs

Enact simple flat tax at federal & state levels

Enact state constitutional tax and spending limit

Abolish punitive damages in civil cases

Enact “loser pays” rule

Establish special medical courts

Structural Solutions for California


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Consumer Spending: are National & Western U.S.

Commercial Consumption Expenditures™: Small Business Outlook

Wayne Best, Senior Vice President, Business & Economic Analysis, Visa USA


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West are

Growth In Consumer Spending Continues

16%

13%

Visa System

10%

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

2005

ISF010 |27


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West-T&E are

System-T&E

West-Retail

System-Retail

Strong Consumer Spending In The West

19%

14%

9%

2005

ISF010 |28


Slide29 l.jpg

System-Discount / Mass / Drug Stores are

West-Discount / Mass / Drug Stores

West-

Dept Stores

System-Dept Stores

Consumers Return To Department Stores,

But Discount Stores Still Lead In Growth

17%

8%

1%

2005

ISF010 |29


Slide30 l.jpg

West-Home & Garden Supplies are

System-Home & Garden Supplies

Retail Growth In The West Driven By Increased Home Values

37%

14%

West-Home Furnishings

System-Home Furnishings

9%

2005

ISF010 |30


Commercial consumption expenditures l.jpg
Commercial Consumption Expenditures are ™

  • Commercial Consumption Expenditures™ (CCE) measures the annual dollar value of purchases made from one business to another, and the purchases governments make from businesses.

  • CCE combines different publicly available data series to capture both intermediate purchase transactions and capital expenditures made to produce a final good or service.

ISF010 |31


Benchmarking payment company penetration and opportunities l.jpg

$8.6 Trillion (e) are

$16.2 Trillion (f)

Payment Company Share of CCE 2.3%

General PurposeCard Share of PCE

25%

2005

2005

Benchmarking Payment Company Penetration And Opportunities

ISF010 |32

General Purpose card share includes Visa, MasterCard, American Express total products purchase volume (excludes online debit)

Source: Visa Quarterly Statistical Highlights and Visa estimates


Slide33 l.jpg

Forecast are

Commercial Consumption Expenditures™

$ Trillions

$17.3

$16.8

18

$16.2

$15.2

$14.0

12

6

$5.1

$4.9

$4.7

$4.4

$4.1

0

‘03

‘04

‘05

‘06

‘07

6.1%

3.0%

4.8%

Total

9.1%

3.8%

Yr/Yr

5.4%

4.4%

4.5%

Small Business

7.4%

4.3%

Growth

ISF010 |33

Source: Bureau of Economic Analysis, Census Bureau, Global Insight, Visa Business and Economic Analysis


Small business segment share of spending l.jpg

Industry Share of Small Business Segment Spending are

Agriculture 2.9%

Transportation 2.4%

Accommodation

& Food Services 4.0%

Health Care

Retail20.3%

5.7%

Professional Services

6.6%

8.9%

Construction

Manufacturing13.0%

Real Estate

9.1%

WholesaleTrade14.2%

Other 12.9%

2005(e) CCE $4.7 Trillion

Small Business Segment Share Of Spending

Spending byMarket Segment

Small Business29%

Mid/Large61%

Public10%

2005(e) CCE $16.2 Trillion

ISF010 |34

Source: Global Insight, Visa Business and Economic Analysis