PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

State of the Union 2018: MASSIVE Optimism and Opportunity

By at 2 February, 2018, 12:48 pm

Photo courtesy of The White House.

by Karen Kerrigan-

Small business optimism continues to hit record highs, and President Trump channeled that buoyancy in his State of the Union (SOTU) address on January 30.  In fact, a January 25 Gallup/Wells Fargo Small Business Index survey reports that optimism is at an eleven-year high.  And, “Owners’ ratings of their future financial situation now match levels from December 2007 when the overall index was at its highest point.”

In his address to the nation, President Trump said: “There has never been a better time to start living the American dream.”

Data keeps pouring in to back the President’s statement up. And, given high consumer confidence and massive new investments that America’s biggest companies will be making in new projects over the next several years, it’s a great time to start a business, or think big about expanding your business. There will be plenty of entrepreneurial opportunities to do business with these larger firms, find niche markets or problems to solve as the economy grows.  Let’s look at some of the really positive data from 2017, which sets the stage for solid economic growth in 2018:

● Venture capital investment was the highest in 2017 since the early 2000’s, which is great news for startups and high-growth firms that drive innovation and quality job creation.

● Sales of small businesses saw a huge increase in 2017, with the last quarter of 2017 delivering a record-breaking performance. There was a 23% increase in buy/sell transactions compared to 2016.  These numbers demonstrate a very healthy market for people wanting to buy businesses, which is important to business dynamism and transforming our existing “stock” of U.S. firms.

●  Holiday sales were the strongest since the Great Recession – up 5.5% from 2016.  The retail industry is dominated by small businesses.

● Small business lending is getting stronger.  According to Biz2Credit’s latest Small Business Lending Index, business loan approvals at big banks and lending institutions hit new heights in December.

●  Entrepreneurship is trending higher This is a very positive trend as new business creation has been weak over the past decade or more.

In my response to the President’s SOTU address, I observed: “Entrepreneurs credit President Trump’s leadership for getting things done during his first year. Small business owners are very optimistic about their future and the economy. High confidence, more capital and a renewed can-do spirit signal great things for entrepreneurs in 2018.”

The President can build on his policy successes by advancing the next layer of small business priorities to fuel the dynamism and energy that our economy needs to extend opportunity and the promise of the American dream to everyone.  SBE Council’s agenda is being rolled out, and the specifics of policy reforms we are advocating can be accessed through the links below:

Regulatory System Transformation and Reform
Access to Capital
Tax System Modernization

Broadband Access and Deployment

Health Care Affordability and Innovation

Growth via Global Trade and Strengthening IP 

Invest in America

While entrepreneurs and small business owners are thinking about or working on expanding their firms, President Trump’s team descended upon Davos to urge the world’s business leaders to invest in the United States. President Trump’s message to the World Economic Forum on January 26 focused on America’s competitiveness, the surging economy, regulatory relief and reform and why it’s a great time to invest in the United States. He touted his massive tax cuts and signaled that America will continue to engage globally on trade:

“We support free trade, but it needs to be fair and reciprocal…The United States is prepared to negotiate mutually beneficial bilateral trade agreements with all countries. This includes the countries in TPP11, which are very important. We have agreements with several of them already. We would consider negotiating with the rest, either individually, or perhaps as a group, if it is in all of our interests.”

Global Trade is All About Small Business: Opening global markets for our entrepreneurs needs to be a top priority for the Administration. Trade agreements, and getting more of them in the pipeline, will lift U.S. economic growth and wages and improve the lives of many across the world.

Ninety-five percent of global consumers live outside of the United States, and given the vast growth in wealth creation across the world, more entrepreneurs and small businesses are eyeing global markets for growth opportunities and expansion. The platform-based economy is making it easier for small business to extend their products and services across the globe.

As it stands, America’s small businesses already play a significant role in the global marketplace.

In fact, a large variety of small to mid-size businesses dominate the American export scene.  According to the U.S. Census Bureau, of all U.S. businesses that export 96.2 percent have less than 250 employees, 92.2 percent have fewer than 100 employees, and 87 percent have less than 50 employees. Just over three-quarters of U.S. companies that export – 76.6 percent – have less than 20 employees.  U.S. global trade is all about small business.

Read SBE Council’s agenda for trade in 2018: Growth via Global Trade and Strengthening IP.  America needs to regain its leadership position on trade.  A positive outcome on the NAFTA renegotiations – meaning an outcome that modernizes the agreement, builds upon its principles in lowering barriers to expand small business opportunities across borders, and protecting American IP – will be key to U.S. success in negotiating future deals with other nations. When America leads on trade, America – and the world – all win.

Karen Kerrigan is president & CEO of the Small Business & Entrepreneurship Council 

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