Startups and Small Business: 5 Things We Really Need From Politicians Mike | June 25th, 2012
We hear a great deal of talk from the Presidential campaigns about what small businesses and startups really need to succeed. It’s “job creators, this” and “entrepreneurs, that” and “innovators, the other.” First of all we are not monolithic. Every small business has its own distinct needs and it’s own unique problems. For instance, my friends in the world of manufacturing (yes, there are tons of small businesses in that sector) struggle every day with the regulatory environment which sometimes places great pressure on them, drains their capacity and shrinks their margins. But, here at crowdSPRING, these types of government rules, whether to address environmental or worker safety concerns, have next to no impact on how we operate. Many politicians blame business tax rates for our stagnating unemployment figures and overall economic malaise. Although many small business owners agree with that, there are many who don’t and who believe that it is not the tax rate that is preventing them from hiring new workers, it is lack of demand for their products and services. The point is we don’t make hiring decisions based on our tax bill come the end of the year, we make those decisions based on whether business will be robust enough to justify the additional expense that each worker represents. Cutting our taxes might help, but what would help more is growing our businesses and increasing our revenues.
Just like the population-at-large, entrepreneurs and small business owners cut across the spectrum of political ideology. Many of us will vote for the candidate who espouses lower taxes and less regulation, while many others will vote for the candidate who best articulates the benefits government can deliver in our lives. The point isn’t that split, but rather that there are commonalities across all small businesses, and politicians should recognize this and focus on the policies that can best help us. Lighten up on the rhetoric, stop with the hyper-partisanship, and find ways to improve the environment for small businesses and startups. Here are 5 areas to focus on that will help small businesses across the board.
1. Give us access to capital. What most small businesses need, first and foremost, is money. Sometimes that capital comes in the form of VC or Angel funding for start-ups, sometimes from bank loans or lines of credit, sometimes from form of grants or other development funds, and sometimes it comes from cash flow. Government can pursue policies and regulations that make it easier for banks to extend credit to small businesses and can assist businesses by keeping interest rates and barriers low. By implementing wise loan guarantee and subsidization programs, hundreds of millions more dollars in credit could be offered to small business. In the world of R&D, technology, and innovation government grants and development funds are critical to ensure that business can remain competitive, that new industries can grow, and that new sources of employment can increase. Finally wise policies and targeted tax breaks and incentives can reduce the burden on many businesses, increasing profits and cash flow and allowing companies to grow, hire more workers, and pump more dollars back into the system in the form of B2B consumption and contracting.
2. Provide stability. Business is dependent on projections and planning. Without the ability to plan, we will never hire more workers, expand into new markets, or develop new and innovative products. So stop already with the 3 month extension of laws. A great (and sad) example of this is the Transportation bill currently being debated and negotiated in Washington, DC. Thousands of small construction firms are unable to plan for the year ahead, determine how many new workers to hire, buy or lease new equipment, and compete for the contracts that are their life blood. So, Congress, compromise already, get a long-term bill in place and give small businesses that ability to plan a year or more in advance, not in 3-month dribs and drabs.
3. Allow fair competition for contracts. Take the money and influence out of politics and level the playing field. Many government contracts go to companies that provide generous contributions to politicians in both parties. What a shock, that influence and contracts can be bought by the highest bidders. If politicians would develop sensible legislation that would remove the influence of political contributions many small businesses and startups would be able to compete for government work on a level playing field. Most owners of small businesses agree that it is unfair that large corporations and deep-pocketed individuals are allowed access and advantages that are not available to the rest of us. Unlikely as it seems, many politicians do recognize that this is a problem for small business and are truly more interested in helping than they are in re-election. Let’s support the elected officials who do try to fight this battle, and let’s take the money out of the system and make the granting of contracts about which business can provide the best services or products at the best price. Period.
4. Cut the red tape. In the state of Illinois, new businesses can set up their new entity quickly and easily online and at a very good price. Amazingly, right here in Illinois, the Secretary of State is committed to using technology to cut the bureaucracy and reduce barriers to forming a business This approach should be across the board; governments can and should make licensing and permitting easy, fast and accessible. I am constantly amazed at how dependent many government agencies still are on the fax machine, pre-printed forms that must be sent in by mail, and countless government workers sending that paper through pneumatic tubes (jk). In the age of the Internet, there is no reason that forms need to be filed in person and in triplicates. Seriously. Use the technology and eliminate the bottlenecks!
5. Spend a little. Sure, I recognize that there is a percentage of our population (and an equal percentage of small business owners) that believe that governments should never spend money to stipulate the economy or help give people a hand up. But I also believe that the vast majority supports smart spending that can help businesses and improve the economy. When our financial system needs a lift, and small businesses are struggling because their customers have no money to spend, government has a responsibility to provide help. I think that 80% of the people in our country, across political parties and ideologies, believe that wise invest in infrastructure, education, and research will help us in the log run. Hundreds of thousands of small companies can benefit if government can lead they way, develop the programs, and execute the contracts to put people to work, to improve bottom lines, and to get companies and workers spending again.
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