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Thinking small (business)

One of the biggest complaints people have about our bailout-stricken economy is -- where's the love for the entrepreneur? In one survey of voters last fall, more than 70% said entrepreneurship the health of the economy depends on the success of entrepreneurs.

Now, this survey comes from the Kauffman Foundation, which champions entrepreneurship, but I think it's widely recognized that small business is a huge engine of our economy and of job creation. And there we have a serious problem.

Only 26 percent of these people said they'd consider starting a business in the next five years. And this was last fall. It's probably down to zero by now. At this point, what may be more discouraging to them than the economy itself is a sense that perhaps entrepreneurship isn't a priority for the government's economic stimulus efforts. It's got its hands full with the giant dying stars of GM, AIG, Citi, etc.

This week, Businessweek pointed out some government resources for entrepreneurs that are underutilized. But I think a lot of people are looking for a more forceful policy from the President that he understands how crucial small business is to the recovery. You could argue his tax policies say otherwise.

Today in Forbes, Sramana Mitra says Obama's advisory council needs a voice for entrepreneurs, and by entrepreneurs she means people who scrape and claw their way to starting a business:

... the president needs to first decide that entrepreneurship is a major issue that he cares about, and not just something he gives lip-service to. Then, he needs to recruit an advisory council made up of bootstrapped entrepreneurs, not venture capitalists or super high net worth investors. This will be the key to spawning a million small businesses that employ 10 million people--or more.

And therein lies the engine of growth now silenced by the $20 billion flushed down into General Motors' bottomless abyss.

Dying star, bottomless abyss. Same thing.

I actually met Sramana Mitra last week at Kauffman. We both attended a forum on economic blogging. And she gave an impassioned speech about this very topic -- the need to give small businesses a chance to do their thing for the economy.

My sense is that she speaks for many, many people in this country.

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I took a seed round of funding from a Venture Capital firm in October, after the markets started collapsing. My delight in closing the round was quickly tempered by a Senior Partner who pulled me aside and said, "Looks like tough times are coming; congratulations on closing the round. MAKE SURE IT LASTS."

Gulp.

I'll need more capital this year to expand our operations, assuming we get that round, I'm exciting to be hiring in a time when other people aren't. I remember how much Oracle benefitted from being the only firm hiring in 1993, and how Google benefitted from being the only firm hiring in 2002.

So, Chris, I'm sure inquiring minds what to know, what exactly is your business?

I heard alot of Comments on how Small Businesses are important to creating jobs. This I know first hand from my neihbors who are all unemployed from large Automotive Suppliers. I have just a small business where we work on very long-life recycleable batteries and switching for Electric Automobiles. I am thankful that there is more interest now in what we do than in 2007. Also we expect more markets to open up for us in recycling materials. Maybe this fall I can hire 3 more workers. I don't expect any help from the federal government for us. I see no talk from the present administration for help either in hiring extra workers or help with our R&D efforts. I do however expect more taxes on our R&D money because of our long development cycles. When we finish the Battery we still have to deal with the Value-added taxes. I believe that we will have a better year 2009 and 2010, to improve our workers pay and have some disposable income. I believe our state government will help us some too.

I'm doing the day job and night based business thing right now. From my perspective I was well supported in starting the business. The local chamber gave me some basic answers and I was off to the races. Not much time or frustration there. That is not the case if I wanted to hire someone. I would love to hire another person to help but my goodness, the hoops you need to go through and I'm not just talking about all the taxes. So much paperwork and tracking. I also heard (probably while I was listening to marketplace) that unemployment insurance costs where getting a hike. Not much of an incentive to hire. So my business will hold its size for now. Its good weekend entertainment. Thanks for the chance to rant.

BTW, A forum on economic blogging?!? That sounds pretty harsh Scott. Sure you don't want to go back to your night job?

Thom, I really enjoyed the forum, actually. It was nice to be engaged in a thorough economic discussion for a couple of days. Lots of good ideas. But to answer your question, I think I have to side with sleeping when it's dark outside.

I don't have a small business but I have been raving about this since the first economic bailout package. Small businesses get money, more people get hired, more taxable revenue (I thought small business shoudl be one of three major parts to the economic stimulus, now TARP, i.e lobbist give-a-way). It's unfortunate, with all the money we've put into helping the economy money still only gets to the people who already have it.

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