Strategies: Mr. President-elect, please remember entrepreneurs
— -- An open letter to the incoming president:
Like all Americans, we in the small business community congratulate you on your victory and are optimistic about the hope your election brings. Now we'd like to answer your call.
On election night, you set out your vision: "There's new energy to harness, new jobs to be created, new schools to build, and threats to meet, alliances to repair." You asked the American people to join you in remaking America "block by block, brick by brick, callused hand by callused hand."
Well, Mr. President-elect, small businesses live on those blocks, have laid those bricks, and know what it's like to have callused hands. Now we'd like to lend those callused hands to partner with you.
As you set policies and a course for the future, let us help shape that future. You'll invite corporate leaders to advise you on economic policy, but keep this in mind: the average lifespan of a Fortune 500 company is only 40 years. The future of America depends on small and new businesses.
In my nearly two decades advocating for small and emerging companies, I've had a unique perspective on the two types of entrepreneurs in America, and both should have seats at any policy table.
First, I literally live in Silicon Valley. I live and work next to people creating some of the most exciting companies of tomorrow. These entrepreneurs — when you talk about access to capital — think about venture capital and angel investors. They need tax policies that keep that money flowing. They need an even playing field to make sure they can compete with entrenched industries. They welcome governmental commitment to the technologies of tomorrow.
But I also figuratively live on Main Street. I travel the length and breadth of America, hearing concerns of small business owners in places like Sioux Falls, S.D., Muncie, Ind., Boise, and Greenville, S.C. These entrepreneurs are enabling American cities to survive. Access to capital for them is their local bank, an Small Business Administration loan, tapping into home equity or using a credit card. They need a healthy credit market. And they could use help finding ways to grow — affording employees, technical assistance, reaching markets.
In Silicon Valley, I've seen how entrepreneurship creates wealth. On Main Street, I've learned a more important truth: In much of America, the only way into the middle class is to start a business. Not get rich — just make $40,000 or $50,000 a year. When the local company employing 300 people in Youngstown, Ohio, or Yakima, Wash., shipped jobs overseas — it not only took manufacturing jobs, but the marketing and personnel and procurement jobs that paid a decent wage disappeared, too.
Mr. President-elect, both types of entrepreneurs need their voices heard and can help you create a healthy American economy. We can:
• Create jobs. I've been advocating a "Hire Your First Employee" 25% tax credit. Your proposal for a $3,000 tax credit for all businesses adding employees is an excellent step, but you can help the more than 20 million non-employer businesses contribute to an economic recovery by financially encouraging them to cross that intimidating threshold of taking on an employee.
• Create agriculture entrepreneurs. I've met many young farmers who are re-envisioning small farms. Consumers are looking for healthier food. Let's make it easier for them to connect. You proposed a 20% tax credit for those investing up to $50,000 in owner-operated farms. Let's use this as new source of capital for small farms: So a person living in Manhattan could invest $1,000 in a farm in New Jersey, get a $200 tax credit, and receive their dividends in the form of produce deliveries. Let's help small farmers transition into "value-added agriculture" so they are not competing at commodity prices. Let's turn to them for innovative agricultural technologies.
• Identify and build industries of tomorrow. Small companies — often led by young entrepreneurs in unlikely places — can help you identify, pioneer and encourage new industries. For instance, there's an emerging field of "rec tech" or recreational technology, being devised by heartland entrepreneurs. You play basketball, President-elect Obama, so you may not realize that Americans, especially young Americans, spend huge amounts of money on recreational activities requiring ever better technology.
• Devise alternative energy, environmental and social solutions. When you think of "green tech," don't just turn to Silicon Valley for solar energy and Main Street to install solar panels. Let's tap into the creativity of entrepreneurs and inventors all across America.
President-elect Obama, call on us as you make your plans to restore the American economy. Can we be part of your solution? Yes, we can.
Rhonda Abrams is president of The Planning Shop, publisher of books for entrepreneurs. Her newest book is Successful Marketing: Secrets & Strategies. Register for Rhonda's free business tips at www.PlanningShop.com. For an index of her columns, click here. Copyright Rhonda Abrams 2008.