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Lynda Bekore

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No Economic Recovery Without Small Business Recovery

Posted: 06/17/2013 1:51 pm

No Economic Recovery Without Small Business Recovery
As small business goes, so goes the nation. That's the take-away from the recent news that 65% of small businesses (SMBs) don't plan to expand in the current period or the next 6 months. And if you think you're not affected by the woes of SMBs because you're employed by a big company or the government, think again.

According to the National Federation of Independent Businesses (NFIB), May showed a near zero hiring rate. Almost 80% of small businesses didn't hire anyone in the last month; 12% actually eliminated jobs. Considering that small businesses make up 49% of private sector jobs in this country, that means the job prospects of your newly-graduated daughter don't look too great, along with your unemployed, bookkeeper neighbor, or your girlfriend's hairstylist who's looking for a salon gig.

News headlines, Wall Street, and the White House all tell us the economy is improving. But any small business person can tell you the economy is not recovering. And SMBs know that "the economy" is not the reason for high unemployment and slow growth--taxes and red tape are.

In 2005, federal rules that affect small business numbered 788. In 2012, that number increased to 854. Add to those rules the state, county, city or other local regulations, and it's a wonder a small business owner even has the time to attend to his actual business, let along sell anything.

If you're a consumer, then excess government regulations on businesses affect your wallet every single day. When a city mandates that your local pizzeria has to provide paid sick leave for part-time workers, your large pizza pie just went up two dollars. And if you're unemployed or your income has shrunk, you're probably going to shop in Target or Walmart, not your local children's clothing store. Similarly, that $4.99 arugula that looks so good at your local farmer's market might not look so good next to the $1.99 iceberg lettuce at your big box supermarket.
In a recent Wall Street Journal interview, Carl's Jr. CEO Andy Puzder discussed the impossibly long lag time required to get a commercial building permit in Los Angeles. 60 days in Texas, 125 in Russia, 285 days in LA.

"I can open up a restaurant faster on Karl Marx Prospect in Siberia than on Carl Karcher Boulevard in California."

Explain that to the thousands of California construction workers looking for jobs, or the new immigrants who may still be struggling with English or have limited education and would welcome a "foot-in-the-door" job at a Carl's Jr. or Hardees.

We are on the cusp of an historic immigration bill that could open the floodgates of opportunity and prosperity for millions of immigrants. But what's the point of coming to America if unemployment is 12.5% in Bronx, NY and just 6.4% in Mexico City? Latinos make up the fastest growing demographic of minority entrepreneurs, but will the streets of America be paved with gold, or with obstacles?

The growth of more small businesses could easily mitigate much of our unemployment disaster, but owners' hands are tied by onerous regulations. Whether it's from Obamacare, increased taxes, or simply the mounds of paperwork that accompany even the most miniscule compliance, red tape buries and smothers small business owners.

This week, the Small Business Administration (SBA) is sponsoring National Small Business Week, where thousands of SMBs will gather in cities across the country culminating in Washington, DC. These hard-working, optimistic entrepreneurs will network and educate themselves on how to grow and stimulate their 28 million small businesses.

FranTarkenton, who has started up 20 businesses since retiring from the NFL, will be the keynote speaker this Friday for the event's final presentation of the Phoenix Award, which recognizes the achievement of small business' contribution to the national economy.

As a long-time serial entrepreneur and small business advocate, Tarkenton has heard from thousands of small business owners over the years who all share these common goals--to bring value to their customers, to achieve professional success at their own hands, and to be able to give something back to their communities.

As Tarkenton says, "America truly is the land of opportunity, and government can be a positive agent in attaining that opportunity. But the most important thing government can do is to get out of the way. History has shown that both business and consumers win when companies are allowed to grow."

But to share in the wealth, we all have to share in the responsibility of speaking out when government help turns into government obstacles. We have to make sure our elected representatives know why we object and what results we expect, because small business growth is good for everyone.

 

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