Small Business Adviser: Entrepreneurial Optimism Abounds, With Caveats


By Larry Jacob



The voices, views and passion of entrepreneurs are vital to creating levels of job growth our nation has not known.

Every community in America can grow jobs—with entrepreneurs pointing the way. However, we must remove barriers that obstruct a person taking an idea to an economic reality. A recent national survey of entrepreneurs, conducted for the Kauffman Foundation, shines a bright light on the road ahead.

The survey of 2,100 entrepreneurs contacted earlier this year tells us that they are very optimistic—not only about their businesses today, but also about their future and growth potential. Among startups less than 5 years old), 67 percent say they performed well in 2017, as did 77 percent of older companies. That’s crucial, because new businesses account for nearly all net job creation in the nation. But entrepreneurship rates are half of what they were a generation ago.

Looking at 2018, those startups are even more encouraging: 88 percent predict their businesses will perform well; 74 percent are likely to raise employees’ salaries, and 55 percent think it likely that they will hire additional employees.

But those entrepreneurs are also telling us what is needed to help them launch and grow companies. Most telling, they overwhelmingly feel unsupported by government. Sixty percent of startups and 68 percent of older businesses say government does not care about “business owners like me.” Ninety-two percent of startups and 89 percent of older businesses say that the president and Congress should spend more time working to help business owners like them. Those numbers should be a wake-up call for our nation. Our greatest job-producing sector overwhelmingly thinks the federal government is not paying enough attention to their needs. And this survey was conducted after the federal tax cut was enacted.

But the challenge is not just for the federal government. It’s for government at all levels and for communities across our nation. Here are four ways to help reverse a long-term decline in entrepreneurship:

 More Inclusive Networks. Most recent entrepreneurs lack connections with other entrepreneurs who might offer support and guidance. Fifty-eight percent of startup owners know four or fewer business owners; 21 percent of first-year startup owners know one, or none at all. This has real-life implications when it comes to financing or navigating regulations. Kansas City must also embrace diversity, equity and inclusion if we are going to retain and grow talent. In 2015, the city gained 3,000 more people with bachelor’s degrees than the city lost. That shifted dramatically in 2016, when 4,000 more people with bachelor’s degrees moved out of Kansas City than moved in.  As the city attempts to diagnose this sudden shift, a recent Quality of Life survey, commissioned by the Kauffman Foundation in partnership with the Mid-America Regional Council, may hold a clue. The yet-unreleased 2018 survey found that 41 percent of African-Americans and 35 percent of non-white residents see themselves as leaving the city within five years—in stark contrast to the 17 percent of white residents. Part of the solution may be found in free programs such as
1 Million Cups, started in Kansas City by the Kauffman Foundation and growing to more than 170 communities nationwide, are designed to educate, engage, and con-nect entrepreneurs with their communities. These programs open up networks through a welcoming and useful format to help people, regardless of background, succeed.

 Help with the Nuts and Bolts: Many entrepreneurs struggle with the technical steps of growing their businesses. Among startups, 35 percent say they have difficulty, for instance, setting up pay and benefits for employees. Notably, only 55 percent felt they had support from their community to start their business. Free tools can guide aspiring entrepreneurs and ecosystem builders, in-cluding Kauffman FastTrac, now available free digitally, to equip aspiring entrepreneurs with business skills and insights, tools and resources, and peer networks needed to start and grow successful businesses.

 A New Economic Model: What en-trepreneurs want most from government, the survey showed, is not funding but an environment more conducive to business. Fifty-one percent of startups and 67 percent of older businesses want the government to promote a business-friendly environment. Surprisingly, most entrepreneurs surveyed don’t bother using government services available to them, such as working locally with the Small Business Administration or applying for government grants and funding.

 The Entrepreneurs’ Voice: Getting the voices of entrepreneurs in the room early ensures that any top-down policy is well informed by the grassroots. We’ve seen too many promising policy plays falter because the local problem-solving skills of entrepreneurs did not inform the process. We can get it right with the “Opportunity Zones” conversation emerging with the city of Kansas City, the business community and entrepreneurs. Let’s make sure we do.

Barriers are falling, but we are a long way from zero. Fortunately, entrepreneurs are leading the way. Their voice, their views, and their passion are vital to building entrepreneurship, and the resulting job growth, to levels that our nation has known in the past—and then beyond.