Small businesses are alive and well, thank you.
Want evidence? Look no further than the recent QuickBooks Connect conference, where thousands of small business owners, accountants and software developers gathered to learn how to start and grow their businesses. The first-time event sponsored by Intuit attracted people from all walks of life and economic situations – those who refused to accept the status quo, and found the courage and hustle needed to take the plunge into entrepreneurship.
The challenge is keeping that spirit alive. Small businesses remain the engine of the economy, and when they thrive, we all thrive. They create jobs, enrich lives and spur innovation. Communities and national economies grow.
However, their success is elusive. Unfortunately, one out of two small businesses fails in the first five years, and two out of three in the first 10 years. That’s too many dreams dashed, and too many jobs lost.
That’s why we support public policies that will support and encourage small business success. Entrepreneurs are self-reliant, and they don’t count on Washington to ignite their businesses. Yet there are certainly bipartisan policies that can create more fertile ground for success, remove obstacles, and help the economy grow.
Despite the deep political divisions, there are several important small business tax and regulatory reforms that have earned bipartisan support in the past that could – and should – be approved without further delay. Consider the following:
- Deducting small business capital expenditures: Even with bipartisan support in the past, this idea has not yet become law. Legislators on both sides of the aisle have also favored making health insurance premiums fully deductible for self-employed individuals – just as they are for larger businesses – and that ought to be a priority for action as well.
- Reducing regulatory and government compliance burdens on small businesses: No one disputes the need to protect employees, consumers and the environment. Yet in 2010, the U.S. Small Business Administration found that the costs of regulation on businesses with fewer than 20 workers amounted to more than $10,000 per employee. The Governments of the United States, United Kingdom and Australia, among others, have all declared similar national strategic objectives for burden reduction and reform. The key will be sustained action agendas to really make a meaningful difference over time.
The private sector must play a role as well. For example, we know that it’s tough for entrepreneurs to get money to start or expand their businesses, especially those owned by minorities, women and the disadvantaged. And in many cases, they wait too long to get paid by large customers.
To address this problem, Intuit CEO Brad Smith met with President Obama and other business and government leaders to discuss ways that policymakers can improve small business access to capital. As a result, we and others have pledged to pay our small business suppliers within 10 days – putting more cash in their bank accounts a lot faster. We’re also working to match lenders with QuickBooks users, which has improved acceptance rates and generated more than $45 million in loans.
Common-sense reforms are worth fighting for – because when it comes to small businesses, the little things can add up to very big things:
- If the average small business could raise its profit margin just 2.5 percent, it would generate an extra $500 of profit a month. That adds up to $300 billion more in economic activity flowing through our local communities each year.
- If one out of three businesses with employees could hire one more person, we could take a huge bite out of unemployment.
- If the survival rate of small businesses with employees improved by just five percent over the next decade, we’d see an additional 250,000 small businesses employing 5 million additional workers. That matches the number of jobs the entire U.S. economy created in the last two years.
That’s why we strongly believe an aggressive small business action agenda needs to be a national, bi-partisan imperative. With our 30 years of experience championing and empowering small businesses, Intuit stands ready to offer our insights in moving that agenda forward – and keeping America’s entrepreneurial spirit alive. Together we can make a difference that matters.
This piece is part of Intuit’s series on “Empowering People’s Financial Lives.” For more, please see: Intuit’s Hub