PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

ICYMI: Pandemic Startups See Opportunity, but President Biden’s Policies Undermine Their Ambitions

By at 23 March, 2022, 5:32 pm

ICYMI in TippInsights

President Biden must help new small businesses succeed to help the economy recover and grow.

By Karen Kerrigan –

As widely reported, entrepreneurship in the U.S. has been off the charts in 2020 and 2021. According to the Census Bureau, 5.4 million people filed new business applications in 2021, an increase of 53% from 2019 and the most of any year on record. These pandemic startups are a bright spot for our economy, U.S. innovation and job creation. After all, new businesses are sorely needed to replenish the untold thousands that closed for good due to COVID government restrictions and shutdowns.

President Biden is taking credit for this entrepreneurial surge, which began in earnest during 2020. The president’s policies have little to do with the uptick. In fact, according to a new TechnoMetrica/SBE Council survey of entrepreneurs who started their businesses during the pandemic, President Biden’s policies are viewed quite negatively. Only 9% say President Biden’s policies make it easy to start and grow a business.

Congress fares even worse. A mere 5% of startup founders believe Congress is focused on policies that help the economy and “small businesses like mine.”

It needs to be pointed out that not all who file business applications will actually launch an enterprise. According to the Census Bureau, out of the total business applications filed in January 2022 (430,411), it is estimated that only 31,287 businesses will actually form over the course of a year, and 40,433 will form over two years. So, aspiring or “almost” entrepreneurs need as much encouragement as possible to take that next step toward launching the business, and the economic and policy environment will greatly influence whether this potentially great entrepreneurial boom actually goes bust.

It is a critical moment for U.S. entrepreneurship. The success of these pandemic startups can positively impact America’s entrepreneurial biome for years to come. When individuals with an entrepreneurial dream see risk-taking succeed it creates a positive cycle for entrepreneurial activity. Modeling matters – the “if she or he can do it, then so can I” mindset plays an important role in turning entrepreneurial aspirations into real businesses.

Of course, government policy matters too. And on that front, the premise and thinking behind President Biden’s proposals and regulatory actions are downright dystopian. The Executive Order on Competition, for example, describes an economy and its sectors that are impenetrable by new entrants and where big business dictates the lives and decisions of workers, consumers and entrepreneurs. This hopeless portrayal is not based on marketplace realities. Besides, hasn’t it occurred to the White House that the massive number of new business applications – again that they are taking credit for – directly contradicts their narrative of an economy that is barren of opportunity and competition?

Despite the pandemic, where 60% of startups in our survey described the economy as not favorable and 78% their market as competitive, 82% still saw an opportunity – some combined with necessity – as the impetus for launching their businesses. They wanted to be their own boss, wanted more control of their time, and had easy access to the tools – largely technology – that encouraged them to launch.

These new entrepreneurs do not view “big tech” as a big problem – quite the opposite. The survey makes clear that online marketplaces, electronic payments, social media platforms and other tech tools were vital to their decision to launch, and remain critical to their firms’ ongoing growth. In fact, 60% are worried that efforts being pursued by the Biden administration and Congress to regulate big tech will negatively affect the sales and operations of their businesses. Specifically, they believe government regulatory action will curtail access to consumers and customer communication, increase the cost of technology and online tools, eliminate the free services they use, and disrupt back-office support and shipping.

So, big business and big tech are not big issues that concern entrepreneurs. In the not-so-good- news category for the White House, “President Biden’s policies” actually rank as a top three impediment. When asked what issues are important for President Biden to address to help their new businesses succeed, they include lowering taxes and a simpler tax system, inflationary pressures, supply chain disruptions, affordable health coverage, access to capital, and labor shortages. No surprises there.

President Biden continues to point the blame at big business and various industry sectors for every ill facing our economy. Perhaps it’s time to look in the mirror. Then, get out a bit and talk to some entrepreneurs. They see endless opportunity and they are America’s hope for the future. Our economy needs many, many more of them.

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

 

This article first appeared on TippInsights. 

 

 

 

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