Business Key Definition Slowly Changing Dimension

Why Small Business Is the Key to Our Economy

Small businesses are failing faster than they're starting up. Here's why that needs to change--and what we can do to make it happen.

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Running a small business is a tough job. As any entrepreneur knows, you often wear many hats. No matter your title, at some point you will act as your own tax accountant, marketing executive, regulatory expert, fundraiser, and human resources supervisor.

Yet throughout our history, American entrepreneurs and small businesses have done all these things and more. Their dogged determination has spurred the development of new technologies, new industries, and new jobs. But in the past few years, the business of being in business has gotten a lot more difficult.

Entrepreneurs often feel like the odds are unfairly stacked against them. In 2008, that feeling became fact. One of the most startling trends that have emerged from our uncertain and uneven economic recovery is that small businesses now fail at a faster rate than they are being created. Starting with the Great Recession--and for the first time since data on this concept has been collected--more new American businesses failed than succeeded. Back in 2008, this was just another piece of terrible economic news. It is surprising and troubling that in 2015, the trend continues. More than six years later, small firms are still dying at a faster rate than they are being produced.

This is a real problem for a number of reasons. The first is that small firms already employ half of the American work force. On top of that, small businesses create the vast majority of new job opportunities--seven out of every 10, in most places. If you take into consideration the Kauffman Foundation's finding that startups and new businesses are responsible for all net new jobs over the past 30 years, you reach one conclusion: Fewer new businesses means fewer new jobs.

When we passed the Regulatory Flexibility Improvements Act earlier this year, the Speaker of the House pointed out that it is easier to start a business in Belarus and 44 other countries than it is in America. While this is unfortunately true today, it doesn't have to be true tomorrow. Free enterprise embodies the essence of the American spirit. Our nation has been a steady force of certainty in an uncertain world in large part because it has always been a place where anyone with an idea and the willingness to work hard has the freedom to turn that idea into reality. We must not let that slip away.

The Small Business Committee is examining the most pressing challenges facing our entrepreneurs and small businesses. And we are working on solutions that will promote free enterprise and help us build an opportunity economy. That starts with understanding the importance of small businesses, and it continues with doing the difficult work to make starting and growing a business less complicated.

Congress can set the stage for that growth. We are focusing on solutions that reduce unnecessary regulatory burdens, simplify the tax code, improve access to capital, and open new markets for companies to sell goods stamped "Made in the U.S.A."

Every American business--from the most iconic brand to the most steadfast neighborhood establishment--started as an idea. Making sure America remains a place where ideas and new businesses can take root will set the foundation for an opportunity economy that holds promise for everyone.

Mar 4, 2015

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Source: https://www.inc.com/steve-chabot/building-an-opportunity-economy-starts-with-small-business.html

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