Small Business Is Booming. Here Are 6 Ways for Entrepreneurs to Keep Thriving
During a pandemic-era marked by shutdowns, labor shortages, supply chain disruptions and inflation, there has also been a surge in applications to start new businesses. Entrepreneurship has taken off at unprecedented levels.
Since August 2020, applications filed to start new businesses have averaged around 400,000 per month. Prior to the pandemic, they hovered around 300,000 per month, according to U.S. Census Bureau data. There are signs that this is not just a pandemic-era trend. At the end of 2022, entrepreneurship was still booming.
The trend isn’t surprising if you have spent time with an entrepreneur or small business owner. Entrepreneurs solve problems, and when America experienced huge problems in a concentrated time frame, entrepreneurs rose to the occasion. New economic needs and changing consumer preferences created more circumstances for new businesses to start.
For example, City Bonfires was founded in 2020 when Michael Opalski, a restaurant industry salesman, and neighbor Chris McCasland, who owned a restaurant and worked in the entertainment industry, were worried about their jobs. They got together to create a portable, reusable mini bonfire device suitable for apartment porches and hikes — and perfect for home-bound workers craving fresh air.
The widespread boom in entrepreneurship is a huge benefit for communities and a great sign for the U.S. economy. As new businesses grow, they are likely to employ more people in the community and fuel the local economy. About one-third of current new business applications are marked "high-propensity," meaning they are likely to hire.
Entrepreneurship can also be a path of opportunity for minorities, women, veterans, young entrepreneurs and immigrants to realize their dreams. There was a 33% increase in Black male business owners in 2020 and 2021, according to a study, and a 22% increase in Black female business owners.
Our country’s unique free enterprise system allows for this kind entrepreneurial growth, and Congress and the administration should be doing everything possible to ensure these new businesses grow and succeed. The U.S. Chamber of Commerce details how elected officials can foster new entrepreneurs’ freedom to exist and thrive in the Small Business Bill of Rights.
Great bipartisan work happened in reaction to the devastation brought to small business by COVID-19 when Congress passed seven laws in 12-months, all specifically designed to help small business. It should not take a national disaster to fuel smart policy that benefits small business.
The widespread boom in entrepreneurship is a huge benefit for communities and a great sign for the U.S. economy. As new businesses grow, they are likely to employ more people in the community and fuel the local economy.
Congress and the administration can continue to support new entrepreneurs and small businesses by:
- Encouraging individuals to start businesses rather than penalize entrepreneurs. For example, laws like California’s AB 5 and similar proposals at the federal level that force sole proprietors into an employee relationship. Reclassifying 1099 businesses as employees penalizes independent contractors who want to blend several business activities and benefit from self-earned income and increased flexibility.
- Preventing punitive tax increases on small businesses by extending the 20% pass-through deduction utilized by small businesses. Without congressional action in three years, small businesses will face a massive tax hike.
- Avoiding new mandates (like project labor agreements, Davis-Bacon wage requirements, mandatory retirement plans, etc.) that raise the cost of entry so high that small businesses can never break into the federal contracting arena.
- Reversing pending moves by the Federal Trade Commission that make it harder for small businesses owners to eventually partner or sell to a larger business.
- Protecting the freedom of businesses to set their own prices and enter into contracts by opposing government price controls and new regulations governing private business contracts.
- Opening up more opportunities for small businesses to sell to the 95% of the worlds consumers who live outside the United States by expending free trade opportunities.
Our communities across the nation must remain good places to do business — especially during a period of accelerated entrepreneurship. Government standing in the way only hinders entrepreneurs and small businesses at a time when we should be doing whatever is necessary to support these new businesses and economic growth.