Since this is national Small Business Week (how could you forget?), I thought I might highlight a few recent articles on issues related to small business and entrepreneurship.
1) A recent Brookings Institution report has received a lot of attention by noting that business deaths in the U.S. have been exceeding business births for a long time—since 2008 to be exact. This lagging business dynamism is a big worry, and something that warrants much further analysis. A useful review of this data recently occurred on The Atlantic Cities blog. My take is that the Brookings study focuses on firms with employees, and thus doesn’t address the fact that many people are pursuing different business strategies as free-lancers or solo entrepreneurs. So, the numbers don’t tell the whole story. But, that point is more of a quibble than counter-argument. U.S. business dynamism is slowing and that is not a good thing.
2) A new CFED study takes a deep and sympathetic look at the many financial challenges facing America’s micro-entrepreneurs, i.e. firms with less than 10 employees. CFED researchers surveyed a sample of microbusiness owners about their use of financial services. Most of the findings won’t be a surprise to those who work in the field, but they are still instructive. For most microbusiness owners, the split between household and business expenses is pretty murky. Moreover, few have access to much financial cushion in the event of crisis or emergency. In these cases, they typically rely on savings, credit cards, or family/friends to weather the storm, and lack access to more sophisticated banking services. The result is continued instability and uncertainty—not the best financial state for building sustainable businesses over the long-term.
3) Another new study from the Partnership for a New American Economy examines the growing importance of Latino entrepreneurs. Since 1990, the number of U.S. Latino entrepreneurs has tripled and now involves more than 2 million business owners. And, this rate of business start-up keeps climbing, even as overall business start-up rates stagnate. All is not rosy. For example, self-employed Latinos make less than other self-employed Americans. But, the trends are moving in a positive direction and it’s clear that the future of entrepreneurship in the U.S. will depend heavily on Latino entrepreneurs.