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Wednesday, Sep 28, 2022
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SMALL BUSINESS AND RETAIL–Small High-Tech Firm Growth Exceeds All Others



Daycom Honored By Chamber as Emerging

Business of the Month

The amount of growth for small high-tech firms in San Diego between 1990 and 1998 exceeded the total amount of business growth in the city during that same time period.

How can this be? Simple, according to Terry Bibbens, entrepreneur-in-residence with the Small Business Administration. High-tech firms grew at a remarkable rate, while other sectors of San Diego’s economy either remained relatively stable or declined.

An SBA study, released earlier this month, showed that the payroll of local high-tech firms increased by $3.7 billion between 1990 and 1998. That’s larger than the total payroll of San Diego companies, which grew by $3.44 billion in the same time period, Bibbens said.

The tourism, agriculture and medical services payrolls all posted modest gains, while the area’s defense payroll , in a time of base closures and budget cuts , fell from $1.6 billion to $1 billion, he said.

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Bibbens pointed out that in San Diego, high-tech is largely synonymous with small business. Large employers like Qualcomm Inc. and SAIC are the exception, but even if they’re included, the average size of San Diego high-tech firms hovers at about 40 employees.

Bibbens also said the growth in the high-tech sector was fueled by high salaries. The average starting wage for agriculture and tourism hovers at around $15,000, while the starting salary for high-tech ranges between $33,000 and $55,000. Thus, one job created in the high-tech industry generated two or even three times as much growth as a job created elsewhere, Bibbens said.

Services such as construction and retail were not included in the survey. Growth in these industries is “secondary,” and success is predicated on whether or not growth occurs in the primary sectors, Bibbens said.

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Daycom Recognized: Daycom Systems is being recognized as August’s Emerging Business of the Month by the San Diego Regional Chamber of Commerce.

Founded in 1992, Daycom is a customer-focused telecommunications company with a technical services division, quality products, quick response time and long-term care of the customers, said Amanda Keller, spokeswoman for the chamber.

The company expanded from 25 employees two years ago to 40 employees today, providing customer service, technical support and creativity. Although annual sales have grown “exponentially,” the company still maintains its small-business feel, Keller said.

The Emerging Business of the Month is an ongoing monthly program that recognizes small and emerging businesses that have been a member of the chamber for a minimum of a year. These businesses must show steady growth and be active in community philanthropic efforts.

Buried Under Red Tape?: Attention small business owners: Does it seem like you’re being buried under an ever-increasing burden of federal rules and regulations? Not surprising.

Total spending on federal regulatory activity and the number of federal regulators are both on the rise, according to a new study from Melinda Warren at the Center for the Study of American Business in St. Louis.

In fact, real federal spending on regulatory activity has been steadily rising since 1986 (but for a small drop in one year). In 1996 dollars, regulatory spending registered $10.55 billion in 1986, rose to $15.26 billion by 1993, reached $16.76 billion in 1999, and is estimated to hit $18.34 billion in 2001.

Meanwhile, federal regulatory staff, as measured in full-time equivalent employees, had declined from a then-high of 121,791 in 1980 to 101,804 in 1987, and then climbed to 130,043 by 1995. By 1997, the number had declined to 124,048, but subsequently resumed rising to 125,727 in 1999 and is estimated to increase to an all-time high of 131,983 in 2001.

These trends are inevitable. They’re the result of the steady stream of regulations, rules and mandates emerging from our nation’s capital, said Raymond J. Keating, chief economist with the Small Business Survival Committee, a nonprofit, nonpartisan advocacy group.

Just like taxes, increased regulations mean higher costs for U.S. entrepreneurs, businesses, and ultimately, consumers. One of the greatest threats to the country’s current period of economic growth is excessive government regulation, Keating said.

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Environmentally Speaking: A small business based in Carlsbad has received a $35 million investment that allows the company to expand its bioremediation technology into Mexico and Latin America.

U.S. Microbics Inc., with a staff of 18 employees, uses its proprietary line of synthetics-eating bacteria to clean polluted soil and water for use in agriculture, construction and other industries. On July 19, the Securities and Exchange Commission approved a May 12 request to permit Atlanta-based Swartz Private Equity LLC to buy into the company, said Bob Brehm, chief executive officer of U.S. Microbics.

Brehm categorized the three-year deal as “basically a $35 million equity line.” U.S. Microbics can take the funds in installments at its discretion and is able to exercise that option every 20 days, he said.

The price U.S. Microbics gets depends on how its stock is trading. Swartz has the right to buy U.S. Microbics’ shares at an 8 percent discount, he said.

U.S. Microbics uses bacteria to clean synthetics such as oil, gasoline and other pollutants from soil. Among the projects it has in the pipeline is cleaning up the site of the stadium planned for Downtown San Diego.

U.S. Microbics hopes its toxin-eating bacteria will take a bite out of the lucrative Latin American market. On July 10, the company formed an agricultural subsidiary, funded with $2 million and to be headed up by veteran Latin American grower Gus Olson and his partner, Rene Palomares, Brehm said.

Send small business and retail news to Lee Zion at lzion@sdbj.com.

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