Читать книгу The New Builders - Seth Levine - Страница 34

That Isaac was able to garner the outside capital he needed to get his start in business sets him apart from most aspiring business owners. The majority of American entrepreneurs don't have access to any outside capital to start or grow their businesses. Eighty percent of entrepreneurs lack access to either a bank loan or to venture capital, according to the Kauffman Foundation. This “capital gap” is a significant drag on US entrepreneurship and leaves would‐be entrepreneurs few options for funding their ventures. Almost 65 percent rely on personal and family savings for startup capital, and nearly 10 percent use personal credit cards for credit for their businesses. This has meaningful implications on who can access capital to start a business, especially when considered in the context of the racial wealth and economic gaps. It's also significant to the question of which businesses are able to survive, especially in times of crisis such as the Covid‐19 economic recession.⁸

Back in 2010, Chris Cain, a longtime community development executive and advocate for entrepreneurs, directed a small business development center for the Small Business Association (SBA) in Richmond, Virginia. She taught classes and helped workshop business ideas. About 80 percent of the people who came to the free classes were women of color.

Many had inspiring stories: they had left abusive relationships or were trying to put food on the table for children. With a talent or an idea for a business, they wrote business plans to get themselves off the ground.

It was brutal, Cain says. “You'd get an amazing business plan written and then go to a traditional bank and not get funded. I had no way of being able to help my clients get access to capital. They would have to save money or borrow money from friends.”⁹ In Chapter 8 we'll talk more about just how meaningful this discrepancy in access to lending capital actually is. Black and brown entrepreneurs are disadvantaged at every step of the process. They seek smaller loans than their White counterparts, they are turned down at higher rates, they receive less favorable terms, and they are more likely to be approved for smaller loans amounts. All of this is perhaps why Black and brown founders are less likely than White business owners to even apply for a loan in the first place.

When entrepreneurs launch businesses despite a lack of startup capital, they start out behind. In 2019, pre‐Covid, the JPMorgan Chase Institute found that in the typical community, 29 percent of small businesses were unprofitable, and 47 percent had two weeks or less of cash liquidity. Communities with a greater number of non‐White residents and lower home values had a higher proportion of unprofitable businesses.¹⁰

The Covid‐19 crisis laid bare how the United States was falling short in supporting this most critical segment of our economy and the foundation of our economic future. In fact, perception has traveled so far from reality that when the US Congress designed the Covid relief packages that were specifically meant to help small businesses keep employees, the legislation was written in such a way that it failed to include many independently owned restaurants and storefront businesses, which are, as a group, the economy's largest employers, and who should have been front and center to any relief package.

By the time the legislation was passed, many undercapitalized restaurants had already laid off employees. There was no sense in taking out a no‐interest loan – remember, those loans needed to be repaid – if there was little likelihood of reopening at all. The question of rent, the single biggest fixed cost for many entrepreneurs, wasn't addressed. The legislation also favored companies that had existing relationships with banks or who were sophisticated enough to access other forms of capital. Is it any wonder that, while it provided a short‐term benefit to some, the $3.5 trillion CARES Act did too little to help small businesses in the long term? Many didn't survive.

As winter of 2020 loomed, the community of Akron, Ohio, tried to take matters into its own hands. It had given out more than $5 million in direct grants through the CARES Act. But the challenges of small businesses accessing relief under the aid packages loomed large for the region. More than 90 percent of the 13,262 employers in Akron in 2018 had fewer than 50 employees. But together they employed as many as 160,000 people.

“To permanently lose 20 to 30 percent of them would be catastrophic,” said James Hardy, the deputy mayor for integrated development, referring to Akron's small business base. “Particularly when you consider that Akron had only recently ‘recovered’ from the Great Recession of 2008–2009. Meaning we had returned to pre‐recession job numbers.”¹¹

Local leaders are better aware of the role of small businesses as employers. As Hardy put it: “[Losing those small businesses] would be a gut punch to thousands of local residents and entrepreneurs. One that could set them and their families back for a generation. Sixty percent of Akron residents live paycheck to paycheck; or worse.¹² We know from this and other research that Black and female workers and business owners will continue to be hit the hardest.”

The city was spending $200,000 on a new app – the city's version is called Akronite – to encourage residents to shop locally. About 2,600 people had signed up so far to earn “blimpies” and redeem the rewards for cash, one‐on‐one, at small businesses.ⁱ Hardy expected the investment in the app to pay off in higher spending at local businesses. But the biggest benefit was that small business owners might think that somebody cares. “They're scared and frustrated,” Hardy said.

So was he.

If the pandemic made clear how vulnerable and underappreciated America's entrepreneurs have become, the spotlight and the next few years offers an opportunity to change the narrative. If we're going to rebuild, we need to let go of a few mindsets. Too much focus has been put on determining which entrepreneurs have the best chance to grow their businesses into large companies. This winner‐take‐all attitude belies the fact that most entrepreneurs are building more modest businesses and working at a much more local, grassroots level. They are an army of sorts, leading a revolution that continues from a centuries‐long tradition in America of embracing grassroots entrepreneurship and supporting local and community businesses. We need to create an environment in our country that will help a much broader set of entrepreneurs to thrive.

In the fall of 2020, even one of the country's staunchest advocates for big business, CNBC's Jim Cramer, took to the airwaves to plead for more federal aid to help small businesses. Darden Group, the parent company of Olive Garden, was thriving because it had access to capital and the resources to implement technology across its chains. There's nothing wrong with Darden Group, Cramer said. “But do I want to eat out at Olive Garden every time?”¹³

No. And most people don't want to walk down Main Street where every shop is a chain, either. As the pandemic rolled on, Milton Friedman's singular focus on profits and growth to the exclusion of other values seemed to have reached its natural conclusion: Free to Choose doesn't look so appealing if every choice is the same.

Luckily, while the United States is remembering the value of small business, the entrepreneurs of America are continuing to be what they always have been: the most determined group of people you could ever hope to meet.