Challenges of Small Business Leaders
Small businesses continue to struggle in the economic downturn, and it will be important for policy leaders to get the economy moving again. Small businesses will be a large part of that, as entrepreneurs will spur new innovation and employment in the coming years. These firms will continue to be the job generators that we have become accustomed to. Industries will recover from the downturn in different ways, and some industries have clearly been hit harder this time than in past business cycles.
Small business owners have struggled, along with their larger counterparts, to weather the economic downturn. The National Federation of Independent Business (NFIB) continues to show that owners are less willing than in previous years to expand their small businesses, to hire additional workers, to invest in new plant and equipment, or to borrow money. Small businesses have taken a wait-and-see approach to the challenging economic environment, with most postponing the exploration of any new opportunities at least until there are signs that the economy is improving. In the meantime, many firms are looking for ways to streamline their operations or to re-evaluate their business model, paying closer attention to their balance sheet.
Small businesses are an integral part of the country’s social and economic fabric. Encouraging small business ownership and new firm creation means more to our economic success than simply the preservation of Main Street values. Entrepreneurship injects vitality and a competitive spirit into our economic landscape that is not readily available from large business.
Research shows that small firms play a vital role in innovation, regional economic development, and the pursuit of new markets. These firms are responsible for half of our real gross domestic product and employ half of the private workforce, along with generating the majority of our net new jobs. Moreover, self-employment serves as an opportunity for many of our citizens to better themselves by taking their fate (and risks) into their own hands and generating new businesses.
Small business owners face enormous challenges in the coming years, and policymakers will need to wrestle with these issues after this year’s election. In addition to greater economic volatility in general, small businesses must now contend with lower sales, higher input prices, and increased global competition. Reducing such anxieties and strengthening the economic picture will go a long way toward getting these firms back to what they do best—expanding their businesses, hiring new workers, and investing in new technologies to find their niche.
Join us in October 2010 for an Access to Resource Information workshop.
Stephanie over at