Howard Makler is the co-founder and CEO of Innovation Refunds.
Innovation in America comes from many different sources, but I think the key to unlocking that innovation is giving entrepreneurs the proper tools and resources they need to nurture that innovation.
This is especially the case with small and medium-sized businesses (SMBs), the heartbeat of our country and economy, where a thriving business can provide opportunities for entrepreneurs to learn new skills, support their families and ultimately empower future generations of innovators.
I’ve been an entrepreneur for over 30 years, starting small and large businesses alike, and I’ve seen firsthand the way that a small business can bring communities together. Now, I can see the difference that these businesses are making across the country.
There’s no question that SMBs are the backbone of our economy. According to the U.S. Small Business Administration, small businesses created a net 12.9 million new jobs over the past 25 years, accounting for nearly 66% of all jobs created. Despite having such an impact, because the majority of SMBs are self-funded, they face unique challenges and often bear the brunt of economic volatility.
As these economic pressures rise, the time is now to work together to develop solutions that empower small-business owners to adapt to our current economic environment, provide critical job opportunities to our workforce and fuel innovation.
The first step in addressing this issue is making sure we understand the value these entrepreneurs bring to our country. While there’s no arguing with the economic impact we’ve seen SMBs historically have in our country, the value of these businesses isn’t just tied to job creation or the economy. They are also deeply embedded into the entrepreneurial ethos of our country.
Where larger businesses often face regulatory and bureaucratic roadblocks that can stimy meaningful change, we rely on the nimbleness and agility of small businesses to continue to push the envelope and inspire fellow entrepreneurs and innovators to drive change. Competition and a challenger mentality are what make our country so unique, and we cannot risk losing that.
Diagnosing The Issues
Properly diagnosing the problem becomes the next hurdle.Covid-19 was obviously devastating for small and medium-sized businesses, but with the pandemic in the rear-view mirror, the current challenges become obscured.
While all businesses must reckon with an inflationary environment that puts a strain on financials, small businesses typically face the most challenges. Access to capital remains challenging for small businesses due to high interest rates and tighter lending standards, which makes it harder to secure the funds they need to maintain payroll, pay taxes and keep their doors open.
Supporting Small Businesses
In 2021, Congress earmarked $10 billion for the State Small Business Credit Initiative to support small businesses following the pandemic. These measures have been helpful in jump-starting recovery, but there is still much that needs to be done to ensure SMBs can take advantage of opportunities.
The reality, however, is that many businesses do not have the time or resources to seek out solutions while navigating economic challenges. Large organizations often have entire departments devoted to taking advantage of every single government incentive, while small and medium-sized businesses might have one person operating as CEO, CFO, head of HR, etc. We cannot expect these businesses to do it on their own.
Researching and partnering with tax professionals can help them confidently navigate these complex opportunities. When searching for the right tax professional for a small business, consider those with a proven track record, expertise and industry knowledge. Don’t shy away from asking for references or case studies to get a feel for how they think, and it’s always a great idea to seek out ratings on Google, Yelp or platforms such as Trustpilot.
Data is a precious resource for small businesses—asking the right questions about data security and compliance can prevent headaches later on. Maintaining up-to-date antivirus software, using encrypted passwords, conducting regular backups and internal audits are critical.
I’ve been in the trenches with small businesses facing time and resource constraints, and I know it’s no walk in the park. Thankfully, there are time-tested strategies that can make a real impact:
• Identify priorities: Take a step back to pinpoint key tasks that directly impact revenue and customer satisfaction. The importance of this task cannot be understated. Do the research before devoting energy to essentials. Consider delegating or outsourcing less critical tasks.
• Embrace technology: Leverage technology to streamline processes. Automation tools can handle repetitive tasks, freeing up time. Cloud-based collaboration tools help remote teams work seamlessly, even on a shoestring budget.
• Outsource strategically: Don’t hesitate to tap into freelancers, contractors or specialized agencies. They bring expertise without the overhead costs of hiring full-time employees. Focus on strengths, and let others handle tasks outside your wheelhouse.
Ultimately, we need to make sure that small and medium-sized businesses feel like they really have access to the same resources as big businesses. If we want to ensure that the lifeblood of the U.S. economy continues to inspire innovation and entrepreneurialism, the onus is on those with the power to not just give them the tools they need to succeed, but truly teach them how to access and use them, so they don’t just tread water, but thrive and grow.