Entrepreneurs Are Becoming An Endangered Species
06/26/2017 - Western economies seem to have learned little from the 1988 collapse of the Soviet economy.
The U.N. has cited a past lack of entrepreneurs as a leading cause for the Philippines having failed to grow at the same rate as other Asian economies.
Anti-business laws in France create such a burden on small business owners that few will even consider taking on new employees, resulting in social unrest tied to a youth unemployment rate of more than 24%.
Here in the U.S., a lack of entrepreneurs is one of the key factors identified for African American communities having been unable to rise out of poverty. Unless the trend changes, the American economy as a whole will soon be facing the same socio-economic problems.
Never before in American history have there been more business failures than startups. The shrinking of the middle class largely reflects social and economic changes that have proved devastating to entrepreneurs.
Why So Few Risk Self Employment
Over the past thirty years, public attitudes towards self-employment have changed drastically. Small business owners were once held in high esteem and viewed as valuable members of the local community. Today, they are considered unworthy credit risks and often eyed with suspicion.
Rather than proudly declaring their business ownership, many small business owners now feel it necessary to take advantage of various privacy services to avoid having their name associated with their business.
Uncompetitive Business Climate
Over the past 30 years the federal government has worked against small business. Many of the key factors that contribute to small business success, such as access to capital for growth, have been curtailed as a result of changes to federal banking and investment policies.
Changes to bankruptcy laws protect equity investors while creating additional risk for independent entrepreneurs. Small business owners must risk everything they own, as well as future income from employment after a business failure.
Small business owners are forced to finance growth of profitable small business establishments using high interest personal loans and credit cards while facing tremendous competition from equity financed national corporations or start-ups backed by venture capital firms that can easily burn through millions of dollars per month on their way to an IPO windfall, never having achieved profitability.
Why So Many Fail
As daunting as these challenges are, and though they certainly contribute to business failure, they are not the primary causes of failures. The leading causes of failure include:
- Unrealistic expectations
- Poor financial management
- Lack of management skills
- Inability to navigate regulations
- Weak time management
Success in the current business climate requires entrepreneurs to be better planners, better business people, and better managers. To achieve that, entrepreneurs need better information and a willingness to band together as a national community, sharing knowledge and experience, and not falling for marketing schemes that take advantage of their naivete.
More and Better Information
Many States do little to support small business owners. Policies, procedures and requirements for new establishing a new business are often buried in Secretary of State websites with poor navigation, offering little or no advice to first time business owners.
Lookupbook.net is helping to resolve these difficulties by providing State by State guides to government websites, highlighting key challenges faced by local business owners, and offering general, non-legal, advice needed by first time business owners to achieve a successful business launch.
As part of our effort to bring small business owners together into a community, we regularly publish lists of social networking communities, offer recommendations, and issue informational alerts to help small business owners be better business managers.
You can help by supporting the small business community and joining us to hold politicians of both major parties accountable for laws that favor equity investors over small business owners. It's not just your future at stake, the future of our nation is at greater risk of economic disaster than ever before in history.