The key to the economic recovery is the creation of more jobs. Small business is viewed as the job creation engine and all small businesses were start ups at one point. Governments say they are spending lots of money to help small businesses create jobs. I'm interested in understanding how this is helping start ups.
What kind of job creation help are you getting from various government agencies and programs? Which agencies and programs are effective? Which agencies and programs are not helpful?
If you could ask your legislators to implement just one thing to help you create jobs, what would it be?
Get businesses out of the health care and taxation collection business (It is not our job!)
Businesses of every size are tremendously burdened by the costs and distractions of collecting and accounting for employee health care, employee state and federal taxes, government employment and retirement (medicare, medical, SDI, SSI...) programs, and sales taxes. Startups and small businesses in particular suffer under these burdens since their resources are limited and every distraction can mean the difference between success and failure.
The only agency that seems to be making an impact on small businesses is the Small Business Administrations (SBA) Loan Program. The recent report card shows a steady increase in the amount of money loaned during the Recovery Act, which is good.
However, if you look at the amount of money allocated to small businesses, it's about $25-30B compared to $2,500B in TARP money that has already been spent (12,500 B has been allocated). On top of that, the SBA money is loans while most of the TARP money has been a challenge to account for.
The one thing that will help create jobs is to unfreeze the credit markets or loan direct to small businesses. Even though the SBA had loan guarantees, bank lending completely dried up during the crisis and is still a challenge today. Access to capital is the single biggest factor in launching small businesses and creating more jobs.
"What one government action would help the most to create more jobs"? That's easy - get rid of all the government interference with health insurance and other instances where they meddle.
They are there to enforce laws and contracts, anything else is overstepping their role.
At the risk of starting a political debate, I think universal healthcare would be huge for small businesses and startups. Many people simply can't afford to leave a large company to start a business due to health issues. My previous startup could have hired another employee with the amount of money we spent on healthcare and we had to be extremely careful in the early days to avoid issues with pre-existing conditions.
There are many ways to solve the problem using some combination of the free market and government, but the bottom line is that decoupling healthcare from employment while keeping it available to people on a low income would be a boon to small businesses and startups.
I own a small business that employs 36 people here in California. Every year my business is saddled with more taxes, fees, obligations, reporting, and duties that are related to my role as an employer.
All these items, and more, make it MUCH less attractive for us to hire new employees, and yet as we grow we have no choice. The government knows this. They know that eventually businesses will have to hire people, and so they give lip service to helping small businesses. However, what they propose is that businesses be able to BORROW more DEBT. That debt is more likely to kill businesses than help them. Debt will cripple most small businesses. Businesses need to achieve positive cash flow, not higher debt service obligations.
The best way to help small businesses hire more people is to LESSEN the intrusion of government in our businesses, not load us up with more debt and more taxes.