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Welcome & Introductions

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Welcome & Introductions 

Moderator:

Rob Basso

President, Advantage 

Payroll

Panelist:

Dr. Martin Cantor, 

CPA

Panelist:

Doug Manditch

CEO & Chairman

Empire National Bank 

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What are we seeing on LI?

A shrinking workforce

A growing influence on the service 

sector as higher paying manufacturing 

and construction jobs continue to 

decline

Lower paying service sector jobs will 

create less spinoff jobs, so we need to 

focus on creating a healthy, vigorous 

service sector 

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(3)

What is this survey about?

Is what small business owners are seeing in 

the trenches the same as the headlines we 

read every day?

Is the economy rebounding? 

Do they foresee growth in their industry?

Are companies planning on staying? 

How are people attracting and retaining 

employees? 

Are business owners worried about the ACA?

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Why did we conduct this survey?

To provide valuable information to help them 

run their business

To help business owners better compete in a 

reshaped economy 

To determine the current needs of Long Island’s 

service sector necessary to sustain their current 

businesses and employment levels

To determine the future needs the service 

sector will require to expand and grow their 

businesses and employment bases here on 

Long Island and not elsewhere

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Who are the service companies that 

participated in this survey?

building maintenance/landscaping

legal services

food related/restaurants

medical services/heathcare related

retail/wholesale

motor vehicle/auto related services

financial/insurance/business services

entertainment/recreation

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About the respondents:

68.0% had gross revenues less than five million 

dollars 

32.0% reported gross revenues greater than five 

million 

50% have between none and 10 employees 

50% have between 11 and 400 employees

The companies represent employed 1,969 

persons

The companies surveyed paid $36,766,917 in 

wages to their employees in 2011

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Revenue: Increase or decrease?

40.0% reported that their gross 

revenues had decreased from 2011

53.3% reported that their company 

gross revenues had increased

6.7% reported that their 2012 gross 

revenues had not changed from 

2011

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(8)

Employees: increase or decrease

41.7% of companies reported their 

employee workforce decreased from 2011 

to 2012

31.2% reported increases in employees

27.1% reported no change in their 

employees

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Wages: increase or decrease?

32.5% of companies decreased in 2012 

60.0% reported higher employee wages  

7.5% of the companies reported that 

the wages of their employees remained 

unchanged

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Employee benefits: Are you 

keeping up?

52.9% provided pension benefits 

Health care being provided by 80.4%

74.5% provided disability benefits

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Growth strategies: Finding 

Qualified Employees

80.0% agreed that finding qualified employees 

was important to the growth of their company

In the ability to find new employees, 57.4% 

disagreed that they were unable to find 

qualified labor on Long Island

42.6% responded that they had difficulty 

finding qualified labor on Long Island

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Capital Formation: Is it important?

86.2% of respondents agreed that capital formation was 

important for their company’s growth 

13.8% of respondents didn’t think it was important 

53.8% of respondents had not attempted to raise capital

46.2 percent of the respondents had attempted 

One of the indicators why more respondents did not 

attempt to raise may be the level of difficulty

43.5% disagreed or strongly disagreed that they were 

successful in raising capital

56.4 percent had been successful in raising capital

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The Importance of Bank Lending

69.2& reported that bank lending was important 

to the growth of their company

48.1% said that they have tried to obtain bank 

financing 

51.9% said that they have not

50% were successfully able to seek bank lending 

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Local, State and Federal Taxes 

and Energy Costs 

65.4% agreed that property taxes were important 

to the growth of their company

84.7% agreed that New York State business taxes 

were important to their company’s growth

86.5% agreed that reducing Federal taxes was 

important to their company’s growth

84.7% agreed that energy costs financially impact 

the finances of their companies

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(15)

Government Impact on Business 

Growth

75% agreed that complying with New York State 

regulations was burdensome to their company. 

Agreeing that Long Island governments are not 

business friendly was 52.1%

The importance of Long Island government to the 

growth of their company was agreed to by 73.5% 

of the respondents

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The Long Island Economy:  Current 

and Future Outlook

64.6% disagreed that the Long Island economy had 

improved since 2011

25% did not have strong feelings that the economy had 

improved 

10.4% agreed that the Long Island economy had improved

33.3 percent disagreed that the economy will improve 

27.1 percent agreed that the economy will improve

39.6% somewhat agreed the economy will improve

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Relocation & Outsourcing:

66.0% disagreed that Long Island’s high costs would 

force their companies to relocate away from Long 

Island over the next five years

34.0 percent of the respondents somewhat agreed 

to strongly agreed that they would relocate

The projected loss of service sector jobs is troubling 

since this sector is leading Long Island out of the 

recession

82% said that their company is not considering 

outsourcing jobs to states with lower labor costs

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Growth and Contraction

72.5% agreed that Long Island’s service sector will grow over 

the next five years. 

27.5 percent disagreed that the service sector would grow. 

66.7% disagreed/strongly disagreed that Long Island’s service 

sector would contract over the next five years. 

33.3% felt that the region’s service sector would contract.

Having two‐thirds of the respondents feeling that there would 

be no contraction of the services sector bodes well for Long 

Island’s service sector.

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(19)

The Affordable Care Act: 

Concerns of the Service Sector

• Business owners show extreme concerns about the anticipated administrative and  financial impact of changing Human Resource regulations and the Affordable Ccare Act.  • 56.9% agreed that they would be unable to keep up with the changing Human  Resources regulations and the new Affordable Healthcare Act.  • When asked if they would consider outsourcing their Human Resources functions or  improving their technology to remain compliant with regulations and requirements, 70%  disagreed • Only 30 percent of respondents agreed that they would. • Overwhelming concern was expressed by respondents over the cost of compliance with  the new Affordable Care Act.  • 78 percent of respondents agreed that they were concerned

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Interesting Correlations 

• 45% of the reason for company employee growth was increased employee  wages paid • 31% of the reason for employee wage increases was increases in revenues • 64% of the reason for the amount of employees was the wages paid • 43% of the reason for the level of gross revenues was the company category • 33% of the reason for the level of wages paid was the company category This survey found there are strong correlations between increase in employees  hired, gross revenues, and an increase in employee wages.  This suggests that as the  revenues grow in the service sector so will the increase in employees and the wages  that they earn. 

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(21)

What does this all mean?

• This survey reveals that while the service sector is growing within the  Long Island economy, there is a definable indication of the service  sector’s unrest with Long Island’s high property taxes and energy costs,  high Federal taxes, New York State’s burdensome regulations and taxes,  lack of government support for business, and difficulty in raising capital  and securing bank financing.   • Businesses are STAYING despite high costs, taxes, and regulations. Nearly  66 percent of the respondents disagreed that they would leave Long  Island over the next five years.   • Labor is staying here‐ very little are considering outsourcing.  82%  of  respondents disagreed that they would consider outsourcing their labor  to lower labor cost states.  • The service sector: businesses divided over future growth, but confident  that the industry will not shrink • Businesses are concerned about complying with the ACA, but are not  making plans to hire in anticipation of complying 

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How will this affect YOUR 

business?

The biggest finding in this survey: 

The most successful respondents who saw 

increases in revenue paid their employees well 

and retained those employees

Companies who saw decreased revenues had 

lower paid employees and lost employees

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So what should you do?

Look at what you are doing to retain your 

employees and implement new policies

Make sure you are prepared for the ACA 

Feel more confident that businesses are not 

moving off LI which should help you make 

long term business decisions

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