The paradox of the American small business: Myth, scale, and policy

“ The invaluable contributions of small business owners to the strength of our economy are reflected in some extraordinary statistics. The recent record growth of the small business community has resulted in 840,000 new employer firms over the past year-the highest number ever, and a 2-percent increase over the last record set in 1995. Small businesses employ 53 percent of America's private work force, account for 47 percent of all sales in the country, and generate more than half of our private gross domestic product ”

“ Small businesses have always been the engine of our economy – creating 65 percent of all new jobs over the past decade and a half – and they must be at the forefront of our recovery. That’s why the Recovery Act was designed to help small businesses expand and create jobs. ”

“ Nearly 90,000 business owners are still in line, and there’s money left. Without somebody signing this bill today, there are hundreds of thousands of people who could lose their jobs, and small and family businesses that might close forever. And, as you know, small business is the backbone of our economy, representing almost 50 percent of all the employees in America. ”

“ These companies are the engines of growth, and it is in small business that people continue to find opportunity, pride, and dignity.
Indeed, small business is the lifeblood of America's free enterprise system. ”

“ At the heart of our free enterprise system are the Nation's 21.5 million small businesses. They are the engine of our economy, keeping America competitive in domestic and global markets. These businesses demonstrate by their achievements and success that the promise of the American Dream is within the grasp of every one of our citizens.
America's small business entrepreneurs are risk-takers, venturing into new and often uncertain territory. As a Nation, we are indebted to these bold men and women. ”

“ Small businesses account for 44 percent of U.S. GDP, create two-thirds of net new jobs, and employ nearly half of America’s workers. Now, millions of main street small businesses – especially Black- and Brown-owned small businesses – are struggling to make ends meet in the wake of the COVID-19 pandemic and resulting economic crisis. ”

“ To revitalize the Nation, we must stimulate small business growth and opportunity. Small business accounts for over 60 percent of our jobs, half of our business output, and at least half of the innovations that keep American industry strong. ”

“ Far better that we get back to our founding principles, far better that we get back to what has made America great, which is our free enterprise system—a robust, free enterprise system that encourages small businesses to grow and to prosper, that encourages people working a job as a janitor to work hard and get a promotion and climb that ladder, to pay their own rent, to pay for their own food for their kids, to work and to advance. ”

“ The entrepreneurial spirit lies at the core of our Nation's economy and identity. If Americans with good ideas can work hard, put their plan to the test, and succeed, the American economy will continue to create jobs and lead the world in innovation and productivity. During National Small Business Week, we honor the entrepreneurs and small business owners who are the engine of our economy. ”

“ They have different businesses and live in different places, but both shared the same message with me when I spoke to them on the road, and that was American small businesses are hurting and hurting badly, and they need help now. And it’s in all of our interests to make sure they get the help now.
Small businesses are the engines of our economic progress; they’re the glue and the heart and soul of our communities. ”

“ These small businesses are the glue that hold — and they’re important — but these small businesses hold the community — are the glue that hold these communities together. They are hurting badly, and they account for nearly half of the entire U.S. workforce. ”

“ They also represent a segment of our economy that has been hard hit by this recession. Over the past couple of years, small businesses have lost hundreds of thousands of jobs. Many have struggled to get the loans they need to finance their inventories and make payroll. Many entrepreneurs can’t get financing to start a small business in the first place. And many more are discouraged from even trying because of the crushing costs of health care – costs that have forced too many small businesses to cut benefits, shed jobs, or shut their doors for good. ”

“ Even before the COVID-19 pandemic, many small businesses struggled to grow and compete globally as a result of the U.S.’ aging infrastructure, constrained workforce, and tax code that benefits large, multi-national corporations. ”

“ But too many of our small business owners and those who aspire to start their own small businesses continue to struggle, in part because they can’t get the credit they need to start up, grow, and hire. And too many Americans whose livelihoods have fallen prey to the worst recession in our lifetimes – a recession that cost our economy eight million jobs – still wonder how they’ll make ends meet. ”

“ We should start where most new jobs do –- in small businesses, companies that begin when -- (applause) -- companies that begin when an entrepreneur -- when an entrepreneur takes a chance on a dream, or a worker decides it's time she became her own boss. Through sheer grit and determination, these companies have weathered the recession and they're ready to grow. But when you talk to small businessowners in places like Allentown, Pennsylvania, or Elyria, Ohio, you find out that even though banks on Wall Street are lending again, they're mostly lending to bigger companies. ”

“ These small businesses — not the ones with 500 employees, but these small businesses that, with a handful of folks, they are 90 percent of the businesses in America. But when the Paycheck Protection Program was passed, a lot of these mom-and-pop business just got muscled out of the way by bigger companies who jumped in front of the line. ”

“ So when Congress passed what was intended to be a small business relief program, it instead became a free-for-all for well-connected companies. And mainstream — mainstream businesses, from hardware stores to beauty salons, that needed the help most were left behind. ”

“ During Small Business Week, we celebrate our Nation's small business owners, whose entrepreneurship and hard work bring jobs and prosperity to our communities. Small business owners embody the American pioneering spirit and remind us that determination can turn aspiration into achievement. This week, we affirm our commitment to removing government barriers to the success of American small businesses.
Small businesses are an economic force in this country, and have grown by nearly 40 percent since 1982 despite often facing regulatory headwinds. ”

“ To make our economy stronger and more competitive, America must reward, not punish, the efforts and dreams of entrepreneurs. Small business is the path of advancement, especially for women and minorities, so we must free small businesses from needless regulation and protect honest job-creators from junk lawsuits. Justice is distorted, and our economy is held back by irresponsible class-actions and frivolous asbestos claims -- and I urge Congress to pass legal reforms this year. ”

“ To make our economy stronger and more competitive, America must reward, not punish, the efforts and dreams of entrepreneurs. Small business is the path of advancement, especially for women and minorities, so we must free small businesses from needless regulation and protect honest job-creators from junk lawsuits. Justice is distorted, and our economy is held back by irresponsible class-actions and frivolous asbestos claims — and I urge Congress to pass legal reforms this year. ”

“ They're the owners of that store down the street, the faithfuls who support our churches, schools, and communities, the brave people everywhere who produce our goods, feed a hungry world, and keep our homes and families warm while they invest in the future to build a better America.
That word "invest" helps explain why entrepreneurs are a special breed. When small business people invest their money, they have no guarantee of a profit. They're motivated by self-interest. ”

“ Small businesses employ more than 57 percent of the private U.S. work force, account for 54 percent of all sales, and generate half of the domestic private sector output.
As we move forward in a spirit of renewal and change, there is one constant that must prevail in the economy of the United States. Small business must continue to provide the solid foundation upon which this Nation builds its economic strength and maintains its character. Government, working hand in hand with entrepreneurs, must recognize these contributions and help small business create jobs and increase incomes. ”

“ America's small business owners represent more than 99 percent of all employers, and they employ more than half of the private sector workforce. They create 80 percent of the new jobs in our economy, and last year they generated 51 percent of our Nation's gross national product—more than $16 trillion. Small business owners are leaders in innovation, creating a wellspring of new technology, new products, and more effective business processes. ”

“ Small business is at the heart of the American economy. There are over 6 million small businesses in this country. And they create 70 percent of the new jobs every quarter. They could be small businesses on Main Street or new green-energy startups. But if these companies grow and prosper, jobs are created, and America stays competitive. ”

“ Look, we want businesses to succeed. We want entrepreneurs and investors rewarded when they take risks, when they create jobs and grow our economy. But the true measure of our prosperity is more than just a running tally of every balance sheet and quarterly profit report. I don’t care how many ways you try to explain it: corporations aren’t people. People are people. ”

“ He said that the money he wanted to use for research and development, and to expand his operations, has instead been "thrown into the pocket of healthcare insurance carriers."
These small businesses are the mom and pop stores and restaurants, beauty shops and construction companies that support families and sustain communities. They’re the small startups with big ideas, hoping to be the next Google, or Apple, or HP. Altogether, they create roughly half of all new jobs. ”

“ It is clear then that the tendency to production on a [Pg 37] large scale is the logical result of machine methods, that it secures great economies, and that in industries of increasing returns it is absolutely inevitable.
But not only in manufacturing is this movement observable. More recently concentration in large establishments has revolutionized the retail trade. Department stores have supplanted the small shops because they can buy on better terms, get transportation cheaper, offer a greater variety to the customer at a lower price, and save time and trouble to the customer. ”

“ Sales on a large scale are accompanied, it seems, by differences of method as well as differences of quantity. Some of the attendant advantages are matters of common knowledge. The big shops, having ample capital, can get the best locations. This is a form of advertising, productive of good will. The big shops can practice economies impossible for small ones. In particular, they can make their purchases in bulk and hence at cheaper prices. The big shops acquire a prestige that makes customers eager to buy of them. ”

“ Often remote from the great centers of production, and purchasing in small quantities through a committee or manager of defective knowledge of qualities and prices, much hard-earned money was wasted. Now, in buying through the Wholesale, a society avails itself of the services of expert buyers, who obtain, through their vast purchases, goods at the lowest current prices. Stores are not obliged, as they used to be, to buy more goods than they immediately require, to reach the minimum prices of the market; hence they can carry on business with less capital than they needed formerly. ”

“ In the dry goods business—either wholesale or retail—the margin of gross profit in notions is so small that it is doubtful if, when all legitimate expense is deducted, a net profit is realized. The salesman for a wholesale house whose sales of notions is largest, has made the poorest record; the manager who has kept the sales of the notion department at the lowest price—at the same time keeping his stock down—may be the most efficient. ”

“ They are eager for more, and capital is widely combining into great corporations for the purpose of reducing expenses, so that the cost of manufacture may be decreased, and doing away with competition, so that prices of goods may be augmented. This is but one result of the trust combination. A second and highly important one is a great reduction of the opportunity for individual business operations, the tendency being to reduce the great mass of the community to the position of employees. ”

“ The small capitalists as separate and independent producers are being rapidly crushed or absorbed by the great corporation. They may still belong to the capitalist class in that they live upon an income derived from the ownership of stock or bonds. But they have no real control over the business in which their capital is invested. They no longer have the power to organize and direct any part of the industrial process. They enjoy the benefits which accrue from the ownership of wealth, but they can no longer take an active part in the management of industry. ”

“ You deserve a fair shake, even though there might be much bigger players in the market. Without a truly competitive marketplace, those big companies can raise costs, or slack off on offering good service, or keep their workers’ wages too low. And in an era when large corporations often merge to form even larger ones, our leaders have an even greater responsibility to look out for us as consumers.
To keep America’s economy growing and America’s businesses thriving, we need to protect the principle of fair competition. ”

“ That’s what Wall Street reform is all about – making this economy stronger for you. And we’re going to keep working – to recover every job lost to the recession; to build an economy where hard work and responsibility are once again rewarded; to restore an America where everyone has a fair shot, everyone does their fair share, and everyone plays by the same rules.
I believe the free market is one of the greatest forces for progress in human history; that businesses are the engine of growth ”

“ The most essential ingredient in a healthy free market is competition. But right now, too many companies are engaging in behaviors that stifle competition – like blocking new competitors from entering the market or limiting the information and options that give consumers real choice. As a consequence, the rest of us pay higher prices for lower quality products and services. Workers receive lower wages than they otherwise would. Small businesses and entrepreneurs can get squeezed out of the market. ”

“ It matters because it makes it harder for small businesses to compete. It makes — it matters because it makes it harder for American companies to compete, and it makes it harder for the average American to get a decent job and to get the skills they need in order to get a high-paying job in the industries that are growing today and tomorrow. ”

“ The deck should not be stacked in favor of the wealthiest individuals and the biggest corporations, against working Americans. That’s why my administration is doing everything we can to reverse this trend and promote more competition in the marketplace. In addition to enforcing the rules on the books, I’ve directed federal agencies to identify anti-competitive behavior in different industries, and find new and specific ways to promote competition. ”

“ And that’s to create an environment in which someone can raise capital to start a new company; where a business can get a loan to expand; where ingenuity is prized and folks are rewarded for their hard work.
That’s why I fought so hard to pass a jobs bill to cut taxes and make more loans available for entrepreneurs. ”

“ Consider what that obstruction means for our small businesses – the growth engines that create two of every three new jobs in this country. A lot of small businesses still have trouble getting the loans and capital they need to keep their doors open and hire new workers. ”

“ As we work to rebuild our economy, I can’t imagine anything more common-sense than giving additional tax breaks and badly-needed lending assistance to America’s small business owners so they can grow and hire. That’s what we’re trying to do with the Small Business Jobs Act – a bill that has been praised as being good for small businesses by groups like the Chamber of Commerce and the National Federation of Independent Business. ”

“ In addition to the executive orders that we’ll be issuing today, we will be focusing on another key priority of the President and the Vice President, which is equitable relief to small businesses.
In previous rounds of relief, too much of the support that has been dedicated to small businesses has left out the smallest businesses, mom-and-pop businesses that don’t have existing connections with a financial institution. And in particular, black-, Latino-, Asian-, and Native American-owned businesses were shut out completely. ”

“ Unfortunately, a lot of companies like this, with fewer than 20 employees, were left out of previous rounds of small-business relief. Too many mom-and-pop businesses and too many minority-owned businesses were left behind, while larger, well-connected businesses got funds quickly. ”

“ They don’t think it’s smart to protect endless corporate loopholes and tax breaks for the wealthiest Americans rather than rebuild our roads and our schools, invest in our workers’ skills, or help manufacturers bring jobs back to America. ”

“ All these investments – in innovation, education, and infrastructure – will make America a better place to do business and create jobs. But to help our companies compete, we also have to knock down barriers that stand in the way of their success.
Over the years, a parade of lobbyists has rigged the tax code to benefit particular companies and industries. Those with accountants or lawyers to work the system can end up paying no taxes at all. But all the rest are hit with one of the highest corporate tax rates in the world. ”

“ I believe a thriving private sector is the lifeblood of our economy. I think there are outdated regulations that need to be changed, and there’s red tape that needs to be cut. But after years of record corporate profits, working families won’t get more opportunity or bigger paychecks by letting big banks or big oil or hedge funds make their own rules at the expense of everyone else ”

“ I do not believe that government should stand in the way of innovation, or turn back the clock to an older era of regulation. But I do believe that government has a role to play in advancing our common prosperity: by providing stable macroeconomic and financial conditions for sustained growth; by demanding transparency; and by ensuring fair competition in the marketplace.
Our history should give us confidence that we don’t have to choose between an oppressive government-run economy and a chaotic and unforgiving capitalism. ”

“ By implementing their recommendations, "reinventing" the U.S. Small Business Administration, and pursuing other incentives and initiatives, we can establish an even better environment for small business creation and growth. These efforts are vital to keeping our economy strong and strengthening the proud legacy of innovation that has always inspired our people and made America great. ”

“ My door is always open. But I urge members of both parties: do not oppose good ideas just because it’s good politics to do so. The proposals I’ve outlined are not Democratic or Republican, liberal or conservative. They are pro-business, they are pro-growth, and they are pro-job. Leaders in both parties have supported similar ideas in the past. So let’s come together and pass these measures without delay. Let’s put more Americans back to work, and let’s give our small business owners the support to do what they’ve always done: the freedom to pursue their dreams and build our country’s future. ”

“ After all, innovation is what America has always been about. Most new jobs are created in start-ups and small businesses. So let’s pass an agenda that helps them succeed. Tear down regulations that prevent aspiring entrepreneurs from getting the financing to grow. Expand tax relief to small businesses that are raising wages and creating good jobs. ”

“ Zero capital gains rate for investment in small businesses: Barack Obama and Joe Biden believe that we need to encourage investment in small businesses to help create jobs and turn our economy around. That's why they will eliminate all capital gains taxes on investments made in small and start-up businesses. They also want to cut taxes for the small businesses that create jobs but are struggling with restricted access to credit on top of skyrocketing health care and energy costs. ”

“ It is only by rebuilding our economy and fostering the conditions of growth that willing workers can find a job, companies can find capital, and the entrepreneurial spirit that is the key to our competitiveness can flourish. ”

“ After a decade of hardship for middle class families, and a recession that wiped away millions of jobs, we are in the middle of a tough fight to rebuild this economy and put folks back to work. Winning this fight will not depend on government alone. It will depend on the innovation of American entrepreneurs; on the drive of American small business owners; on the skills and talents of American workers. These are the people who will help us grow our economy and create jobs. ”

“ The senior administration officials underscored President Biden and Vice President Harris’s commitment to providing small businesses with the support they need throughout the economic downturn caused by the pandemic, especially ensuring minority- and women- owned businesses have fair and equitable access to small business relief programs. ”

“ Getting our economy back means bringing our small businesses back. And that’s what we’re going to do. That’s what I’m doing today. We’re going to focus. The program ends at the end of March, but for the next two weeks, the only folks who can apply for that PPP money are businesses with fewer than 20 employees. ”

“ Harris administration will also make a sustained effort to work with lenders and small business owners to ensure small businesses take maximum advantage of this two-week window. Help sole proprietors, independent contractors, and self-employed individuals receive more financial support. These types of businesses, which include home repair contractors, beauticians, and small independent retailers, make up a significant majority of all businesses. Of these businesses, those without employees are 70 percent owned by women and people of color. ”

“ He also will call for the creation of a new financing program to support debt and equity investments for manufacturing to strengthen the resilience of America’s supply chains. Create a national network of small business incubators and innovation hubs. Almost all manufacturers (98 percent) are small- and medium-sized firms. Furthermore, small business ownership is a cornerstone of job creation and wealth building. ”

“ However, even before the pandemic, many entrepreneurs struggled to compete in a system that is so often tilted in favor of large corporations and wealthy individuals. President Biden is calling on Congress to invest $31 billion in programs that give small businesses access to credit, venture capital, and R&D dollars. The proposal includes funding for community-based small business incubators and innovation hubs to support the growth of entrepreneurship in communities of color and underserved communities. ”

“ This is a real opportunity to invest in the future of America and build on our nation’s strengths. There are opportunities for small-business development to help diversify supplier networks and alleviate the risk of “too big to fail” companies in the supply chains for critical goods. ”

“ For workers, a competitive marketplace creates more high-quality jobs and the economic freedom to switch jobs or negotiate a higher wage. For small businesses and farmers, it creates more choices among suppliers and major buyers, leading to more takehome income, which they can reinvest in their enterprises. For entrepreneurs, it provides space to experiment, innovate, and pursue the new ideas that have for centuries powered the American economy and improved our quality of life. And for consumers, it means more choices, better service, and lower prices. ”

“ To permit every lawless capitalist, every law-defying corporation, to take any action, no matter how iniquitous, in the effort to secure an improper profit and to build up privilege, would be ruinous to the Republic and would mark the abandonment of the effort to secure in the industrial world the spirit of democratic fair dealing. ”

“ We’ve worked too hard to recover from one crisis only to risk another.
In America, we should reward drive, innovation, and fair play. That’s what Wall Street reform does. It makes sure everybody plays by the same set of rules. And if we keep moving forward, not backward – if we keep building an economy that rewards responsibility instead of recklessness, then we won’t just keep coming back – we’ll come back stronger than ever. ”

“ It's time for us to recognize that these individual stories connect to a larger American story. All of us have a stake in our common prosperity. When people are struggling on Main Street, that pain trickles up to Wall Street. And just as we have to provide relief to Americans who are struggling, we also have to recognize that we're failing to put ourselves in a position to compete effectively in the global economy. ”