Wanna Start an Entrepreneur (Political) Party?

In an article for Entrepreneur Country’s November issue, Joe Haslam critiques the last year’s election cycle in Spain. Similar to what we experienced in the United States, top candidates for the highest office in the land lauded the importance of small business. In like manner, candidates spoke highly of the value of entrepreneurship and pursuing a dream to start a business. In Spain, the Conservative Partido Popular claimed to be in sync with the perspective that high growth startups create jobs and fuel the economy on both a local and national level. Our candidates voiced similar opinions. Akin to our own situation, the conservatives claimed that the establishment was too focused on taxation and government spending to be able to encourage the right kind of economic growth.

The Partido Popular proposed (if elected) to introduce within its first 100 days in office and Entrepreneur Act meant to encourage and support the establishment of more new businesses. Issues like limited liability and zones for new business creation would be included in the legislation. Open discussions between successful entrepreneurs and the Partido Popular team charged with creating its platform were held to tackle the business registration process and the need to enforce competitive fairness procedures. Unlike the United States, this party won (but they have failed within the past twelve months to deliver what they promised.)

Instead of the press attacking the government for failing to deliver on campaign promises, it seems to make excuses ranging from the need to defend political appointments to challenges in addressing new issues that have emerged since the election. Since the Entrepreneur Act has not only not been passed, but officials now say it may be 2014, many–including Haslam–who have investments in the entrepreneurial market in Spain–have become disheartened. They no longer try to persuade talented young creative talent to stay rather than seek their fortunes in emerging markets such as Brazil, Korea, Mexico or India. 

Within the sunny setting of Santa Monica, California, there exists the home office of the Entrepreneurship Party. Not to be outdone, the Ukraine boasts its own Party of the Industrialists and Entrepreneurs. Haslam wonders aloud whether a third party focused on issues that matter to entrepreneurs and small business owners would be a better alternative than encouraging the constituents to join existing parties who have such crowded agendas that entrepreneurship is just another plank in the platform. He also draws an important distinction between business people who have only worked for big businesses and those who have grown their own enterprise organically, from the ground up. The latter group seems to have the highest likelihood of being able to be empathetic to the issues that matter, as evidenced by people like Michael Bloomberg. Bloomberg  made an appearance at a TechCrunch Disrupt event to hype the new Entrepreneurial Fund in New York.

In some Western countries, politicians have followed a path of making money in the private sector prior to entering into public service. Contrastingly, an Economist article is cited claiming that many in Eastern countries see politics as the way to make the most money  fastest, and a pattern or nepotism is only recently being challenged by outsiders. In the end, it is suggested that entrepreneurs may be able to make the most difference by tackling specific issues, whether you are looking at Bill Gates’ second career as a philanthropist and the great work he is doing through his foundation, or the chairman of Zappos tackling an array of issues in Brazil through private sector initiatives.

Yet, it would be fun to see an Entrepreneur Party and how many votes it could garner, wouldn’t it? Would you just be a social media follower of such a party, or an activist?

 

 

 

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Stop the Rhetoric About SmallBiz, Politicians!

We small business owners watched the political conventions over the last month and were listening to what the pols had to say about watching out for our interests. Numerous speakers took the podium to address an economic challenge not seen in this generation. We of the post-Baby Boom era are wondering whether our way of life will bounce back, rather than when. So many people have lost jobs, big companies have lost revenues they had taken years to build, and small business owners have lost both jobs and revenues as well as their livelihoods. We are, to say the least, keenly interested in whether we are being heard by Washington and our state capitals. We are certain that social security and probably Medicare will not be there for us when we reach retirement age. We truly do not care what happens to those programs–tell us what is going to be done to help us with issues we face!

Saying that small business is the backbone of the economy is not enough–both presidential candidates kowtowed to the convention audiences and said what they had to, but it wasn’t convincing. Part of the reason the comments seemed disingenuous is that “small business” is a catch-all phrase that does not distinguish between differing types of enterprises. As  others have pointed out, a restaurant is a very different type of company than a small manufacturing concern.  Dan Danner, the CEO of  the National Federation of Independent Business (NFIB) says, “There is always a tendency for lawmakers to think that small businesses are just smaller versions of General Motors, and they’re not.” Main Street businesses have very different perspectives on policies that are developed by government. Policies  covering health care, trade, taxation, and ecology often reflect the lobbying power of big business over small business. Chris Holman, chair of the National Small Business Association, says that politicians often “go and vote against small business.”

Data from the Small Business Administration shows that small business has been hit harder than big business by our recent recession. One of the statistics–share of nonfarm GDP from private companies–fell from 48+% in 2002 to <44% in 2010. With home building and related trades suffering from the aftermath of the mortgage crisis, there has been a very slow return to stability –let alone growth–in many small business sectors. Uncertainty over potential changes in the tax code and Obamacare has many small business owners anxious as to what to plan for and how to develop strategies  focused on more than just a few months down the road.

Bloomberg Businessweek writer Peter S. Green profiled several small business owners in the September 17-23 issue who spoke to the issues above. Tom Campbell, who owns the Regulator Bookshop in Durham, NC, spoke out against the unfair advantage online retailers like Amazon have due to sales tax exemptions. He’d like to see the exemptions lifted to create a more competitive playing field. The 20 employees under his supervision have concerns about the future of small bookstores who have to compete in an environment where their customers pay an additional 7+% due to the imbalance in tax liability.

Tom Secor, who owns Durable Corp. in Norwalk, OH, feels that the tax system favors larger businesses. Preferential loopholes in the tax code seem to favor those who have the klout to petition government to listen to them, he says. “Big business is getting the better end of this because they have the money to spend.” Secor’s comments are similar to those voiced by Richard Eidlin, director of public policy at the American Sustainable Business Council. Eidlin decries subsidies offered to big business–whether broadband spectrum or ethanol price guarantees. He says, “If there’s going to be corporate welfare, you could throw some of that at the small corporations.”

In summary, small businesses want someone who understands their needs, can develop programs for sectors of the small business economy, and won’t bog them down in paperwork and red tape. While few actually believe that a president can personally be attuned to these issues, we hope against hope that they will make it a part of their platform and governance!