Essential help small businesses need right now.
If you live in Europe, or in America, it can be tempting to assume that government policies in these countries favour small businesses and that barriers to starting a business in any of these countries are practically non-existent. The truth is that though there are scores of government-run small business and entrepreneurship support programs, accessing them can prove to be a nightmare. Because of this, what difference does living in Europe or America make to aspiring business owners living in other parts of the world? Small businesses contribute up to 50% of some countries’ economies, but yet I wonder why their governments are not doing enough to ease the challenges of starting and sustaining a business.
Below are 5 ways any government of any country in the world can help small businesses succeed:
Bureaucracy – Some call it ‘red tape’, bureaucracy has got to be the #1 challenge faced by small business owners across the globe. So much so, the word bureaucracy is almost synonymous with the word government. When your business or startup is unduly obstructed by insistence on unnecessary procedures by central government or local authority, this is bureaucracy. Reducing the amount of paperwork or eliminating departments and hoops business owners have to jump through will no doubt encourage business growth.
Taxes – Business rates, Corporation tax and all form of taxes have been responsible for the death of many businesses worldwide. Now remember that small businesses contribute significantly to any country’s economy; one of the means of this contribution is by taxes, so I am not advocating a total scrap on business taxes, that would be foolish but I am in favour of (1) a reduction in business rates paid locally to councils and (2) relaxation of the stringent tax laws for businesses younger than 3 years.
Banks – These guys are a major stumbling block to any business. Banks are simply notorious for not lending money these days. This was perhaps as a result of their nefarious activities prior to the 2008 recession and was made worse post the recession. Banks simply don’t lend, period. Those that do, rarely consider start-ups or small businesses less than 5 years old with a near perfect credit worthiness profile. So what can be done? Any government with SME’s in their agenda could assist by (1) guaranteeing small business loans with the banks (2) give incentives to banks that award small business loans (3) encourage the establishment of smaller micro finance banks/companies and (4) give local councils autonomies to award loans and funds to small business owners and start-ups based on the merit of their business ideas.
Advice – Most governments today will point at the millions they have spent on programs that provide consultation and advice services for aspiring business owners. The reality is that access to these programs is either not widespread or the advice gotten are not good enough since so many still complain. Business owners need advice constantly because business terrain change constantly. From advice on filing tax returns properly to product development, tax incentives and marketing/promotion; these are all needed by business owners.
New Markets – One of the job roles of a Prime Minister or a President of any country is to travel the globe and solicit business for his country. Majority of the time, these heads of states succeed in finding new businesses for the larger, more established corporate companies in their countries and not particularly successful small businesses. Why is that? It is also true that governments purchase billions worth of goods and services from specified suppliers; I am certain small business owners are not considered when determining these suppliers. Government should make tendering for product, services and supplies more open to small business owners as well as factor in successful small businesses when gallivanting the world looking for business.
How do you think the government can help your own small business?