The political atmosphere surrounding businesses–especially small business–has been abuzz with a lot of talk lately, especially with the Trump administration’s recent initiatives toward repealing Dodd-Frank.
This new political climate promises to leave bits of slashed red tape littering the economic floor like confetti, especially with fresh executive orders demanding a two-for-one repeal on all future government regulations. Trump has also promised tax reforms as well as to repeal the ACA, which penalizes business that don’t provide healthcare coverage in the amount of $2,000 per employee.
Despite evidence that Dodd-Frank hasn’t slowed lending to business or consumers, as well as Bureau of Labor Statistics numbers showing creation of new businesses steadily growing since 2010, many still claim that starting a small business in the U.S. is near impossible by today’s economic standards.
Small business owners like DeWitt N.Y.-based Joy Weatherup Anthis think that the Trump administration’s executive orders will help SMB creation and growth, despite what statistics say. In an interview with NPR’s Lulu Garcia-Navarro, this is what she had to say in response to BLS statistics showing increased creation of new business in 2010:
“They may have grown. But as you know, as well as I do, statistics can be manipulated. How fast have they grown? Have they grown to their potential? Have they grown enough? And it’s not that I don’t believe those numbers that they have grown steadily. And I’m hoping that some of the things that President Trump will put in place, such as the tax reform and the regulatory issues, will speed up whatever steady gain it has been said that we’ve made since 2010.”
This response highlights an interesting view on SMB creation and growth, in that perhaps it is possible in the literal sense to be an entrepreneur, albeit with caveats concerning the changing marketplace that make it much harder, perhaps practically impossible, to start a new business.
Data Pointing Both Ways
Indeed, to hear Trump himself tell it, according to Laurence Arnold of Bloomberg, it’s close to impossible to start or expand a small business in the U.S. these days–even if the data suggests otherwise.
In fact Trump is on record as having said such when he met with small business owners at the white house on Jan 30th.
“Small business has been treated very, very badly and you people know better than anybody it’s almost impossible now to start a small business and it’s — it’s virtually impossible to expand your existing business because of regulations and because of the banks don’t loan you money,” he eloquated.
While he’s right about the lenders taking a more reserved stance on credit post-2008, this wasn’t a prerogative directed at small business, but instead felt by businesses of all sizes. What’s also missed often are the statistics such as these out of Cleveland showing that 50 percent of small businesses that sought credit in 2015 got the full amount they asked for (up from 33 percent in a similar survey) and that only 18 percent received no funding, (down 46 percent in 2014). The same Bloomberg article purports that 20 percent of respondents in 2014 reported being too discouraged to seek credit, while only 15 percent showed the same in 2015.
One of the biggest success of small business is the recent acquisition of project management software startup Trello for $425 million by software giant Atlassian. Trello was started in 2011.
Nevertheless, we do have to take into account that, while the claims that starting a business is near impossible may be trumped up (pun intended), that doesn’t necessarily mean that starting a business in the US is easy, or even that the US is the best place to do it. In the World Bank’s annual “Doing Business” rankings, the US is ranked 8th in the world (190 economies) for “ease of doing business” and 51st in starting a business, tied with Puerto Rico.
Tips for Entrepreneurs, No Matter the Political Climate
However you dice it, politics be damned, country of origin too, it’s never been simple or easy to start a successful business. Our successes as entrepreneurs and even as employees of startups wouldn’t taste so sweet if we didn’t have to work hard to get where we are.
Here are a few pointers to remember if you’re starting up a new business or are currently braving the wild as a small business owner already:
- When it comes to lending, actively improving your business credit score will likely prove more productive than waiting for laws to change. It sounds simple, but make sure you’re paying bills on time or early, establish trade lines with suppliers, and keep your information current with all three credit bureaus.
- Make use of deductions. Employment expenses are of the most missed tax deductions by individuals, and can lead to huge annual savings. For more information on how small businesses owners can save on taxes, check out this article on taxact.com.
- Make sure you’re compliant. Nothing will end a business quicker than an unexpected HIPAA or PCI DSS violation. Keep your cybersecurity tight, and your records organized for these very purposes.
- Make sure you’re using the right type of software. Automation is huge nowadays, and while some blue collar industries are conflicted in its deployment, even they are benefiting greatly from expense management tracking and payroll softwares in these tumultuous times.
To add to these pointers, one of the best pieces of advice that one can give another in business is simply to persevere. After all, Bill Gates was a college drop-out who started a business in his garage. So was Steve Jobs. If they’d given up because it was too hard, just think about how different the world would be today. Remember to get back on the horse if you fall off, because the only thing keeping you down is you.
So while it may not be easy to start a business in the US, but the only thing that makes it truly impossible is your attitude. Approach every obstacle by adopting the wise words of Mr. Meseeks: “Caaaaaan do.”