November 30, 2015

Will 2010 be the year of Start-Up America?

Will 2010 be the year of Start-Up America?On January 24th 2010, New York Times Columnist Thomas L. Friedman wrote an op-ed piece titled, “More (Steve) Jobs, Jobs, Jobs, Jobs,” which gave advice to President Obama as he puts the finishing touches on this week’s State of the Union speech.

He wrote “We need to make 2010 what Obama should have made 2009: the year of innovation, the year of making our pie bigger, the year of “Start-Up America.”

He went on further to say, “Obama should make the centerpiece of his presidency (this year) mobilizing a million new start-up companies that won’t just give us temporary highway jobs, but lasting good jobs that keep America on the cutting edge.”

Well Mr. Friedman, I believe you are spot on. While your editorial largely focused on exposing youth to entrepreneurship, which is absolutely needed, I think there should be a two-pronged approach with a focus on working professionals and academic innovators who are ready to start businesses right now.

The fact that the 2009 stimulus package and TARP funds did not have any real provision that trickled down to small businesses was criminal. According to the Small Business Administration’s Office of Advocacy, small businesses have been responsible for 60 to 80 percent of annual job creation since the 1990s, creating 79 percent of net new jobs in 2005. Thus, supporting the small business economy will fix the American economy.

I would like to join with Mr. Friedman in calling on President Obama and his Commerce Secretary Gary Locke to pull together the nation’s small business thought-leaders, top entrepreneurs, the Center for Women’s Business Research and micro-business leaders to talk about what is needed to help start-up businesses now. In advance of this meeting, I would like to offer a few suggestions to get the ball rolling quickly.

  1. Provide wage subsidies for small businesses to create jobs.
  2. Provide a temporary payroll tax exemption to small companies less than three years old.
  3. Work with the Small Business Development Centers and the Minority Business Development Agency offices nationwide to fund Become Your Own Boss Bowls (Business Plan Competitions) with meaningful cash prizes, free office space for one year and at least fifty percent of the award’s value in technical support.
  4. Increase federal funding to the alternative capital markets such as Community Development Financial Institutions (CDFI’s) and Community Development Corporations (CDC’s) by 500% and mandate that all loans or grant support come with technical support in financial management and marketing.
  5. Increase funding for SBIR and STTR federal grants and relax the regulations which restrict participation firms from accepting additional venture capital funds.
  6. Provide tax credits for “Green incentives” for small businesses that invest in environmentally sound facilities and energy-efficient manufacturing and business practices.
  7. Continue and expand the entire range of SBA loan programs.
  8. Work with policy leaders to provide incentives to pension funds and other public fund managers to invest in private equity and venture funds that are especially targeting minority and women business owners for early-stage seed capital and mezzanine funding.

I offer these ideas as thought starters with the hope that maybe just a few become last minute lines added to the President’s agenda to get the American economy humming again.

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Melinda Emerson

Melinda Emerson Melinda Emerson, known to many as "SmallBizLady," is a Veteran Entrepreneur, Small Business Coach and Social Media Strategist who hosts #Smallbizchat for emerging entrepreneurs on Twitter. She is also the author of, Become Your Own Boss in 12 Months.

17 Reactions

  1. RE: SBIR… I agree with increasing funding for SBIR/STTR, but please get the issue on eligibility right. There’s no restriction on “participation firms from accepting additional venture capital funds”. The current eligibility rules prevent VC CONTROLLED firms from APPLYING for SBIR grants. While I believe there will be some relaxing of these rules in the current reauthorization legislation, I would not favor anything that takes this opportunity for seed funding away from a small business which has no other source of capital.

  2. Why anyone is surprised that the TARP funds didn’t reach small business is a bit funny. They never were intended to and the current administration literally has no clue as to how to make that happen. What is required for small bits of money to get into the hands of all of those who need it is planning and action not just words. Politicians do words, this president in particular.

    Imagine if those funds had been passed to actual homeowners then taxed at a ridiculously low rate because the money was earmarked to pay debt whether it be housing costs or unsecured consumer debt. It could be in the form of a long term very low interest debt to the lender and the payback could be scheduled to be handled to fit the needs of the person in trouble and even those who weren’t. In other words, if the money had been given to the people first then allowed to be run through the banking system as payments for the real ailments this country has, then everyone would be satisfied, Instead the money was used to line the pockets of Wall Street.

    This government wouldn’t know how to help a regular citizen if it’s life depended on it. As a result this president’s political life is going to flame out just as quickly as he juked the nation into his notion of change.

    Words get you elected but lying gets you removed.

  3. Stimulating post Melinda, thanks.

    I especially like point #2 about a moratorium on payroll tax for new businesses – I know how much that can eat into cash flow, and it’s not a total handout either.

    While it would be great to have the support of big government, I think their actions over the past 30-40 years have demonstrated that small business is simply not a priority for them, and in fact, may not be in-line with their modus operandi at all.

    With this in mind, we entrepreneurs might be best served to do what we always do – get resourceful and figure out how to thrive without a ‘big brother’ to help us along.

    The sooner we realize we’re on our own and start dedicating ourselves to building our own bridges the better.

  4. Great Information. The above poster is spot on.
    Obama’s words were strong, now we’re looking for some serious action.

  5. I agree with Colin. Relying on the government to help start-ups and small businesses may be putting faith in a false Messiah. I just posted my full thoughts on my blog here –

  6. Thank you all so much for leaving such thoughtful comments on this post.

    Fred–Let me start off by saying you are right. I did not word the issue correctly as it relates to SBIR companies and VC money. I would love to talk to you more about this on #smallbizchat.

    Frank–We all know TARP was handled poorly. The focus should have been main street, but if President Obama just would take 3 of my 8 suggestions real change could come for small business America. I refuse to give up hope.

    Colin–The government is spending money in the small business arena and I think they need guidance on things that will really help small businesses. It is always dangerous when people with jobs make policy for people who run businesses.

    Robert–I just left a comment on your blog, but I also want to reply here. I do not believe that I am calling for government intervention, I am merely trying to redirect their efforts so that it will really help small business owners.

    Keep em coming guys I love to get comments.

    Here’s to your business success.

    Melinda Emerson

  7. Melinda is right on target. After leaving as a senior executive in corporate world, I started two large Child Care Centers in MA. It has been ramping up very slow due to high unemployment and therefore, the business is struggling. Relief from taxes(if MA had its way, it will tax for breathing), expensive regulations (insurance)and money available to our customers (parents) for affording education focused care, will make the difference in being successful or not. If I close these, 26 people will become unemployed. While it is important to make money available for innovation, struggling start-ups like mine are desperately in need of help.

  8. Melinda Emerson: How about going on a tour around America and distribute your book, Become Your Own Boss In 12 Months?

  9. Great article Melinda! Thanks for the practical suggestions that should really be looked into, and then executed!

  10. Red Hot Franchises—Thank you so much for your comment. It is time for some action to help America’s small businesses.

    Satish–Thanks for your comment. I really hope that someone in the President Obama’s cabinet will closely examine this issue. I pray some relief comes for your business soon, we do not need anyone on the unemployment line.

    Martin–Thanks for asking. My mission is to end small business failure, so I am willing to do a Book Signing/workshop on How to Transition From a Corporate to Small Business Ownership anywhere. We are scheduling many events now. Let me know if you have any more ideas.

    Jeremy–Thank you for the comment. I have wanted to write an open letter to President Obama on this issue for months when I read Thomas L. Friedman’s op-ed Sunday, I decided that I could no longer hold my peace. Lets keep fighting the good fight.

    To all business success–

    Melinda Emerson

  11. It’s a perfect storm where new businesses are concerned, but I don’t think we will see the blind investing that we saw in 2000. Business angels are looking to maximise their investments, even family investors can’t find bank interest rates that are worth anything to them. So it’s certainly time for new business ideas, especially surrounding fossil fuel technology, climate change and personal data security. These three will be big sectors for private investment during the next 3 – 5 years, and if they are good ideas they will pay the dividends.

  12. Before I look into start a business in child care (opening up a center) I wanted to make sure whether
    I myself needed to be qualified in that area before I
    do. Can anyone help?.

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