The First 100 Days from Small Business Viewpoint

First 100 days? Small business? Face it: the federal government moves way, way more slowly than the average small business. Small business doesn't wait.

I asked other small business owners. How do you think the Obama administration did for small business in its first 100 days. I got a lot of different answers:

• Too soon to tell.
• The words are right, the atmosphere is better. Confidence is up. But the banks and the SBA have not made good on it yet.
• My business is picking up.
• But the real problem is, buyers don't have enough money.
• Obama is saying the right things.

Meanwhile, earlier this week I was part of an angel investment meeting. More than 20 investors reviewing more than 40 business plans. The sense of new business opportunities, clean technology, green business, was clear.

And this month I judged two major venture competitions. The same thing happened in both: clean energy and green companies are the new trend. And the Obama emphasis, already showing up in the first 100 days, is part of that trend. Investors try to lead the market. They look for what's going to happen more than what has already happened.

Investors get it: opportunities are opening up.

A recent NYTimes piece said venture capitalist confidence is creeping back. And I heard the same thing in Houston two weeks ago from Austin, TX venture capitalists Rudy Garza and Matt Cohen.

Is that from Obama actions? At least in part, for sure. That recovery bill we were all talking about in February includes something around $100 billion for new transit, weatherization, clean-tech vehicles, wind and solar power, and green jobs.

And entrepreneurs get it: where the investors want to go is where the money is. So change is coming.

The active word is coming - as in not here yet. I asked Rieva Lesonsky, CEO of Growbiz Media, author of a perennially best selling book on starting a business, about the first 100 days. Rieva told me:

100 days is so short and so much needs to be done.

I think the attitude differential is real. I think Obama makes us feel better about our situation (which has led to a dramatic turnaround in the right track/wrong track numbers polling). So I think we're thinking finally there IS a light at the end of the proverbial tunnel. But we still don't know when we're actually going to see the light.

I do believe that the SBA, (and SCORE and SBDCs) will be better funded than under Bush. And won't have to continually sweat having their budgets zeroed out.

She finished with her hope, posted here on her blog, that signs of recovery are also showing up. Slowly. 

I asked Stephanie Cathcart, of the National Federation of Independent Businesses (NFIB):

It's a tough question to answer with an actual bill list since this congress clearly had many pressing/immediate needs, especially with the economy. However, you may recall, most small biz groups were asking (begging) for more in the stimulus - things like a payroll tax holiday, etc. We instead got a few minor things including increases in expensing limits - which are positives long-term but in the temporary no one is making investments like that right now. I think the SBA stuff was really meant to be a bone for small biz. Every little bit and every mention is good, as far as we are concerned (and I don't want to minimize the attention on small biz - the fact that they were even looking for something specific for us is a great start), but when less than 1% of small biz actually utilize SBA loans it's not quite as impactful as they hoped.

All that said, I do think there are some strong words and commitment to small biz on a few upcoming issues - like healthcare reform and estate tax relief. We have been invited to lots of meetings and have had a lot of positive signaling from the White House. I think we need to be very wary of some of the upcoming tax policy being discussed (since so many small biz owners file as individuals), as well as the labor agenda, which has some harmful regulatory ramifications for small biz.

Clearly, there have been some real steps: a new SBA chief, changes in SBA rules for loans, provisions in the stimulus bill that make green technology more attractive for both startups and investments. We saw the banking bill with its efforts to free up financing for small businesses, and the new SBA team is reviewing some major websites, and, we have reason to hope, breathing new life into related organizations like the national Small Business Development Center (SBDC) network.

There are also some disappointments. You may have seen Lloyd Charles' post here saying small businesses are disappointed with lack of changes in the way the federal government buys goods and services, failing to favor women, minorities, and small businesses. Some small business organizations publicly agree with him on that. And there are still some business owners angry at the tax rate hikes, and I found one business owner who said, simply, "a government that takes over businesses is no friend of any business, small or large." 

John Sechrest works in the front lines, grass roots of economic development, in a chamber of commerce coalition group developing entrepreneurial businesses in central Oregon. He says he's sorry to not have seen more focus on entrepreneurship. "Too much money going into the existing troughs, and not enough going out to new opportunities." And he notes the absence of "more effective partnering with states, cities, and counties." But he adds "I'm happy to see the alternative energy bent and I am happy to see the conservation modes."

I asked Steve King, of Emergent Research, an expert analyst of small business who posts on his SmallBizLabs.com blog. Steve follows the trends in small business for several major clients. He said:

In my opinion there has been a fundamental shift in the attitude about small business in Washington.  Small business, entrepreneurship and innovation are all topics of broad and active discussion.  Prior to Obama, small business was relatively ignored.

He also notes on his blog, this month, that the economy seems to be bottoming out.

I also got a lot of this kind of comment, from Nick Fowler, a professional investor with roots in startups and entrepreneurship:

Fundamentally I think Obama is a good, smart guy managing in challenging times.  But, he's saying what everyone wants to hear.  Cut the deficit and stimulate the economy?  Yeah, right.  Cut taxes for all but the top 1% while at the same time providing national health care?  Yeah, right.  At some point, he's going to have to make some prioritization decisions.  It hasn't been in the first 100 days.

Overall, the closest thing to general opinion in all this is pretty much where this post started: 1.) it's too soon; 2.) what's there looks and sounds good, the rhetoric is helping, the stimulus is helping, but the money isn't flowing yet; and 3.) small business goes its own way, doesn't hang on waiting for government action. It can't afford to.

Comments

[wagadog]

Public Health Care would be a boon to small businesses, and start-ups in particular.

The rising cost of private health insurance is the biggest worry to existing small businesses, who, particularly in the technology sector, struggle to compete for the top talent when they cannot afford to offer gold-plated health benefits.

The high cost of private health insurance has a double-whammy effect on young people thinking of starting their own businesses, right at the time of their lives they're needing to start their own families as well. You basically can't do both, unless you get venture or angel backing -- that just so happens to take the ownership of most of the IP you produce out of your own hands, and into theirs.

Who benefits from this system? The investor class. Not the creatives and the innovators. So...is it any wonder that there is so little innovation in this country? Because of the high cost of health care, even starting your own business you're "working for the man."

Public health care would give individuals the freedom they need to realize their dreams, to innovate and create.

[Joel Libava]

Tim,
Great overview. I do have lots of concerns. What if a lot of what Obama is doing turns out to be wrong? I am not sure any candidate that ran against him could do any better, but I am worried. This crisis is just so huge, it may be bigger than him.

Anyway, I like his new energy intiatives, and am hoping that all of this Green related stuff produces jobs, and then produces Green for all of us. I hope that GT, as Tom Friedman calls it {Green Technology} turns out to be the answer to what ails the US, and the world.

The Franchise King
Joel Libava

[mdh6604]

The Obama Administration has definitely "changed the tone" and engaged the American people in a dialogue about the issues confronting our nation. Obama has been brilliant in his use of the bully pulpit to bring attention to the struggles of everyday Americans and the small business owners who are creating most of the jobs in this country.

On the other hand, Obama has not done enough to "hold feet to the fire" with the banks. A colleague said it perfectly to me earlier this week: "It's a long way from Obama's mouth to the banker's pen!" The credit markets remain completely frozen and the banks are still not lending enough to get this economy back on track.

I'm feeling more hopeful about the future, but I need to see that hope translate into real dollars for me and my business. It's tough out here and small business owners, as usual, are hustling to figure it out on our own because we really cannot rely on elusive angel investors, bankers, government agencies, etc. to "have our backs."

[John Freeman]

Before Obama, the common wisdom was that "small business owners" were one of the more hard-core Republican voting blocs (outside of evangelicals and rednecks :), because Dems meant regulation and regulation was bad for business.

But your piece has a lot of this: "Small business, entrepreneurship and innovation are all topics of broad and active discussion. Prior to Obama, small business was relatively ignored."

so I wonder which interest will win out - 'leave me alone' vs 'thanks for supporting me'

[dianhow]

I think Obnama knows that small business is an important part of our economy and creates many jobs. He will do right by small business's.

[indy100]

My husband is a small business owner/partner with his three brothers. My father is self-employed. We all know that small business and the self-employed are widely ignored by Washington, pay far more in taxes percentage-wise than corporations, and sink or swim on their own. There are no redevolpment incentives, special tax breaks or bailouts for us.
We also know that the REAL drivers of the economy are small business and the self-employed, NOT the corporations.

I do believe we all feel more hopeful under Obama, Bush was a disaster for the economy, the environment, the middle class.

[iluvwine]

Correction, it's Lloyd Chapman you are referring to, not Lloyd Charles.

[cylindar]

It is good that some changes have been or are being made at SBA. They are beyond doubt the most worthless organization I have ever had contact with. I cannot say enough bad things about them, like for instance, they are all a bunch of idiots. Now as far as Obama doing anything for small business: He has done nothing for me and I am a small business owner. I like Obama but he cannot control the descent or does not have the knowledge to be able to help the economy. It is all over for many small business owners. This is definitely a depression.