As Thanksgiving arrives, small business owners have a lot to be thankful for this year. The overall economy is booming. The Dow Jones has several times reached record heights, while unemployment has dropped to historic lows. Business and consumer confidence remain high. Generally, companies are doing well and are looking to grow.
Despite all the chaos that seems to come out of Washington on a daily basis, the reality is that the economy is good, and the country is at peace. We are living during times in which college graduates aren’t just looking to land with a company and stay there for their entire career. Rather, many of them look to start their own companies. Indeed, the spirit of entrepreneurship is alive and well.
There are numerous reasons why business owners should be thankful in 2019. Here are a few:
- We Have the Freedom and Support to Become Entrepreneurs
In many places, your economic status is determined at birth, and it can be very difficult to rise above it. That is not the case in the United States, a country with a great education system and opportunities to advance. The U.S. embraces independence and entrepreneurship. Small business owners work hard, but they also frequently have flexibility in what hours they want to work and the direction they want their companies to go.
Further, American business owners benefit from the advice, expertise, and funding available through the Small Business Administration (SBA), what I consider to be the most effective federal agency. Since 1953, the SBA has worked to ignite change and spark action so small businesses can confidently start, grow, expand, or recover. For more than six decades, it has helped small entrepreneurs pursue the American dream. The SBA is the only cabinet-level agency fully dedicated to small business and serves as the nation’s primary go-to resource and voice for small business owner.
- We Have a Capitalist System That Provides Economic Opportunity
While some presidential candidates seem to delight in taking swipes at capitalism, it is, in fact, an economic system that enables companies – whether publicly traded or privately held – to produce goods and services based on supply and demand of the marketplace. The best and most efficient companies generate the most profit and are the most successful. Conversely, less successful companies either sell or fold. There is an inherent risk involved in starting a business. However, the rewards can be great. Many of America’s top corporations started as small businesses, and often they have been founded by immigrants or their children.
Firms would not be able to thrive without the availability of capital. Entrepreneurs have many options for start-up money, including personal savings, investment money from family and friends, traditional bank business loans, SBA-backed business loans, startup grants, and crowdfunding.
- We Have Technology That Enables Small Businesses to Grow
Think of all the options that small businesses have because of technology. E-commerce capabilities enable even home-based businesses to service clients across the country and the globe. Social media offers the opportunity to promote businesses in cost efficient ways. You do not have to have a multi-million dollar ad campaign to spread the word about your company. Services, such as Wix.com and Go Daddy, help firms establish professional looking websites, and social media including Facebook, YouTube, Instagram and Twitter, enable entrepreneurs to generate buzz and grow their firms. Logistical advances enable the delivery of products often overnight. Thus, a small company based in Connecticut to attract and service clients in California, Colorado or Canada. Technology has also helped streamline the loan application process for companies looking for funding — whether it is applying for a business loan on a bank website or setting up a GoFundMe page for a black-owned vegan restaurant.
- Tax Cuts and Deregulation
Since Donald Trump took office, he fulfilled his promises of cutting taxes and reducing government bureaucracy, and the formula seems have worked because the U.S. economy is in a historic expansion and is as strong as it has ever been. Regulations are less stringent than they were under the Obama Administration, and Trump proudly boasts on whitehouse.gov that “We are now reducing the size, scope, and cost of Federal regulations for the first time in decades, and we are already seeing the incredible results.”
President Trump believes that he has led “historic deregulation efforts to roll back red tape that burdened Americans and stifled economic growth” and claims that under his leadership, the Administration has cut 8 and a half regulations for every new rule. The White House says that deregulatory efforts during the past three years have help businesses cut costs by nearly $50 billion. The president hopes to improve upon this success by extending regulatory reform to State and local levels.
- Low Interest Rates
With interest rates near zero, aspiring entrepreneurs and the founders of growing small businesses today are able to secure funding at a reasonable cost of capital. The Federal Reserve has initiated several interest rate cuts, while holding inflation at bay. This has been great news for borrowers, particularly since business loans often are at adjustable rate.
Big banks are approving loans at a higher percentage rate (28%) than ever before in the post-Great Recession era, according to the most recent Biz2Credit Small Business Lending Index (October figures). Meanwhile, small banks are approving more than half of the funding requests they receive, in part because of the availability of government-backed SBA loans, which mitigate lender risk. SBA backing encourages its lending partners to provide financing to borrowers who might not qualify for traditional bank loans. Institutional lenders have entered the small business lending marketplace in search of high yields. They, too, are willing to provide capital at reasonable rates and are approving about two-thirds of the loan applications they receive, according to the Biz2Credit Index.
There are other reasons why these have been halcyon days for small business owners. We have an educated workforce, thriving consumer demand, and a spirit of entrepreneurship that sets the standard for the rest of the world. Ours is a country that celebrates the entrepreneurial spirit, and in the right economic environment, it makes for boom times.