The Government Hates Small Business

Some days I think that governments of all levels pay only lip service to the dynamic and vital small business community of America. Despite the nice words and flowery press releases extolling the virtues and value of small business owners, I don’t see the abiding love and understanding that the small business community deserves.

Why does government dismiss the small business community? They do it simply because these businesses are small and usually of modest financial muscle. Governments from municipal to Federal admire and seek out that which is large. Large things are easier to keep track of, brag about, measure, and tap for funds. With a single jab on the enter key of a computer in Redmond Washington, the mountain of money that represents withholding taxes for Microsoft employees is instantly transported to the federal coffers in Washington DC. That number is probably many millions of dollars each month, and it obviously garners a degree of love and respect among those who receive it. Corporations of that size represent very large, juicy and ripe low hanging fruit.

For politicians the world of small business entrepreneurs and independent contractors is hard to get their arms around. For them it’s like trying to create a seafood banquet from a net full of sardines or making wallpaper from postage stamps! Of all US businesses, 99% have 10 or fewer employees and they probably can’t be considered major donors to anyone’s campaign coffers. Despite that one criterion, our federal government still defines small business as one with less than 500 employees. Using the government's standard, small business accounts for 99.9% of all businesses in the US, all of the job growth over the past decade, roughly half of all employment, and just over 50% of the gross domestic product.

High level government operatives can smell money as surely as a shark always turns it teeth toward the faintest scent of blood. I just breezed through the April-09 edition of Inc Magazine, one of the leading monthly publications for the country’s small business community. There weren’t any pictures of politicians showing their love with “atta-boy” or “atta-girl” handshakes and backslaps to the owners of small businesses. However leafing through Fortune Magazines you can often find officials and dignitaries and others on the public payroll “gripping and grinning” with a corporate titan as though they’ve just uncovered the cure for some awful disease. Money does indeed make for interesting couplings.

At a certain level, I do understand the real life aspect of small versus large business. If I create 10 jobs, only those employees and their families care. But if my company can say we hired 800 people, it hits the radar for the public sector. They start to count the tax dollars that spurt from a single source. There was a time when Bill Gates and Walt Disney were small business owners seeking opportunities and customers just like the rest of us. Their fame grew a bit faster than their bank accounts, but it was eventually the companies’ large storehouses of dollars that caught the attention of politicians. Yes, election campaign donations sometimes determine the level of vision that we get from those seeking public office and guiding our government institutions.

I must say that in my opinion, the federal Small Business Administration does a fine job despite having 50 pound portions of bureaucracy tied to their hands. There are some officials in all parts of the country who recognize that rules of nature also have parallels in business. There must be fertile patches of ground, seeds, and nourishing care for new growth. Choking the seedlings with too many regulations, prickly taxes, and uncaring treatment will surely create bare patches in the business garden.

Perhaps our present major economic downdraft will help business owners and government gurus get it right. Some of the country’s giant legacy enterprises are being refocused so sharply that we may not recognize them after the major makeovers that are in progress. At the same time, I suspect that two years from now we’ll be hearing and reading about some presently unheralded entrepreneurs who’ve made that Star Wars like hyperspace jump from having less than 500 hundred employees to enterprises harvesting billions. Then the politicians and government functionaries will suddenly have a new group of best friends.


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