⚡ Get All Content for 20% Off ⚡

Small Businesses Celebrating on a Tight Budget This Year. Entrepreneurs can be successful even in the worst of times, but let's hope they aren't forced into that position for much longer.

By Susan Solovic

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Shutterstock.com

The Small Business Administration says that National Small Business Week is for "celebrating Amercia's entrepreneurs."

But can anyone afford the party favors this year?

One of the uplifting facts of entrepreneurship is that many successful founders start their businesses in slow economies. However, that hasn't been the case in the past five years when entrepreneurial startups have declined. We can thank our elected officials and policymakers for contributing to an environment that make starting, nurturing or growing a small business difficult at best.

Missing a low target

As I wrote this, January through March growth figures were released. Experts expected a lousy number, like an annualized rate of 1 percent. If only it had been that good! The U.S. Commerce Department pegged first quarter 2015 growth at 0.2 percent annualized.

In other words, it's essentially no growth. This comes after last year's growth was a paltry 2.4 percent. Some pundits will point to the snow storms – as if winter is supposed to be a season for shorts and muscle-tees – but that can, at best, only explain for a small part of the problem.

It's interesting that "income disparity" and the minimum wage have become major national media stories while the disparity between large companies and small businesses has been virtually ignored. Goldman Sachs recently released a report that shows how poorly small businesses have faired during this recovery when compared with large corporations. In fact, historically, small firms, those with fewer than 500 employees, have outpaced big companies in terms of job creation. That situation has reserved transforming our economic landscape.

Related: Tips and Apps to Assure Your Employees' Safety and Health

Small Biz is MIA

As I noted, the real number of small business firms has declined and revenues have failed to keep pace. Let's take a closer look at what that means. If we take the historical small business growth rate that the U.S. experienced between 1977 and 2007, and project it through 2012, we fall 600,000 small businesses short.

There should be another 600,000 small businesses located across the fruited plain. Think of how many jobs that would add to our economy. There would be work for those millions of individuals who have simply dropped out of the labor force. It would also put labor market pressures on wages and tend to push up entry-level incomes. We probably wouldn't need a national debate about the central-government-imposed minimum wage.

How will it ever be possible to ease the income gap with these kinds of economic conditions? No fiats from Washington, D.C., will change that reality. In fact, so far virtually everything our politicians have done has made the situation worse.

When few people are founding new small businesses, it kills the biggest opportunity individuals have to move themselves into the upper income levels.

Owning vs. earning

The only real path for upward mobility is to move from being a wage-earner to a property-owner and the property I'm talking about is a business. When small business formation is as anemic as it is today, you can't logically expect any other outcome than a widening gap between the rich and the poor.

So as we approach National Small Business Week in 2015, this year I think we need to celebrate the "potential" of small business ownership and entrepreneurism, and also give a special pat on the back to those owners who are surviving or thriving in this era of slow-to-no growth.

As I said at the top, entrepreneurs can be successful even in the worst of times, but let's hope they aren't forced into that position for much longer.

Related: Is Small Business Getting a Dirty Deal With Clean Water Act Changes?

Susan Solovic

THE Small Business Expert, Award-winning entrepreneur, New York Times bestseller, keynote speaker, media personality and attorney.

Susan Solovic is THE Small Business Expert.  An award-winning entrepreneur and Internet pioneer, she founded one of the first video-based websites and grew it to a multi-million dollar enterprise.  The company was recognized as the Best Investment Opportunity in the Silicon Valley in 2006 by a venture forum group.  She is a sought-after keynote speaker, New York Times bestseller, media personality and popular blogger.  Her experience provides her with a unique vantage point from which to inform and inspire entrepreneurs around the globe.

 

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Side Hustle

The Remote Side Hustle a 43-Year-Old Musician Works on for 1 Hour a Day Earns Nearly $3,000 a Month: 'All From the Comfort of Home'

Sam Ziegler wanted to supplement his income as a professional drummer — then his tech skills and desire to help people came together.

Business News

Costco CFO Reveals Uncertain Fate of $1.50 Hot Dog and Soda Combo

CFO Richard Galanti reveals that the price will stay the same — but only "for a while."

Business News

The Most Unexpectedly Popular Side Hustle of the Decade Has Low Startup Costs and High Markups

A new report shows that vending machines are a popular investment — and the industry is set to grow up to $3 billion by 2031.

Marketing

Ever Wonder Why Certain Websites Rank Higher Than Yours? This SEO Expert Reveals The Secret to Dominating Search Results

It's often the smart use of SEO, now supercharged with AI, particularly in keyword optimization.

Business News

AI Is Impacting Jobs. Here Are the Gigs Affected the Most, According to an Analysis of 5 Million Upwork Postings

The researcher said in the report that freelance jobs were analyzed first because that market will likely see AI's immediate impact.

Leadership

Former Interrogator Shares 5 Behaviors Liars Exhibit and How to Handle Them

Five deceptive behaviors to look for and how to respond to those behaviors when you encounter them.