In my column for the Tennessean this week looks at my thoughts on the coming year and what will be us out of the recession. (Hint: It is nothing being talked about in Washington this week):
The economic recovery -- when it occurs -- will be driven by entrepreneurs.
According to the Small Business Administration, 78 percent of all new jobs in the U.S. created over the past 20 years were generated by small businesses. Entrepreneurial ventures now make up more than 50 percent of the American economy.
The mountains of money being given to banks, automobile companies, and so forth will not get this economy moving. It will be the entrepreneurs who have been quietly transforming our economy since the 1980s who will lead the economic recovery.
We have learned from studies from around the world that what stimulates entrepreneurial activity is not government spending or centralized economic planning, but lower taxes, less government regulation and free markets.
It is time to prepare the next generations of entrepreneurs. Now is not the time to put fear in the minds of today's youth about their economic futures. Nurturing the next generation of entrepreneurs is critical to building a large number of new, higher-paying jobs for the 21st century.
Small-business owners are critical for solving our social problems, as well. Small businesses give generously to charity, with three-quarters of small-business owners in a recent American Express survey saying they donate a percentage of their profits to charities.
While this is a bad recession, for entrepreneurs there is no indication that it is any worse than the last two deep recessions experienced over the past 50 years.
Most small-business owners are approaching these tough times with a prudent hand. Entrepreneurs realize they must get back to their roots and become boot-strappers again. They are focusing on their cash flow, cutting overhead expenses and tightening their inventories. Through these efforts, entrepreneurs are positioning their businesses to survive the short-term economic challenges and to be ready to grow when the recovery arrives.
Funding available
While funding from banks and venture capitalists is tight, or even in some cases non-existent, those who work with angel investors (private individuals who invest directly in entrepreneurial ventures) tell me that deals are still being funding.
A recent survey by the Angel Capital Association reports that angel investors have increased their investments this year and believe they will make additional investments in 2009, which will help fuel growth in the economy.
Although we can expect small-business failure rates to increase over the coming months, the entrepreneurial spirit is still alive and well.
The entrepreneurial core of our economy should keep us from falling into a deeper recession. And new business startups will help lead us into the recovery that we can expect by early 2010.
"Nurturing the next generation of entrepreneurs is critical to building a large number of new, higher-paying jobs for the 21st century."
I agree, but we are in big trouble because even in the best condition, entrepreneurs cannot replace jobs as fast as the economy is losing them - as you have stated in previous articles.
And the government is not helping entrepreneurs.
I'll further add that it will be women entrepreneurs - the millions of women that are growing million dollar businesses in 2009, creating jobs for America, rescuing the economy, and empowering other women to do the same.
There are 10.5 million women owned businesses in the United States today, yet only 3%, or 250,000, generate a million dollars or more in annual revenue. With the right support, tools, and encouragement we can all surpass a million dollars in business revenue, create jobs for our communities, and help rebuild America’s economy.
If one million women grow their businesses to one million dollars in revenue, we will have created 4 million new jobs and $700 billion in economic activity.