This is the first article in our “Bottom Line” series focused on the $787 billion plan, where we analyze the spending bill's significance as a stimulus for U.S. entrepreneurs and emerging businesses.
The figures are mind boggling. A few billion dollars there, $50 billion there. And how about the $165 million from the Troubled Asset Relief Program (TARP) that made its way to the executives of bailed-out AIG in the form of bonuses? The unprecedented amount of public funds being spent to save and spur the economy through recent programs certainly includes a bunch of life vests for those failed companies that are “too big to fail,” but what about for the Entrepreneurial Economy?
The American Entrepreneurial Economy includes 550,000 new businesses started every month. It includes the emerging market: the 2.2 million firms in the US with between 5 and 100 employees. These are almost all private companies and most are less than 15 years old. According to the US Small Business Administration (SBA), small businesses (those with fewer than 500 employees) make up 99.7% of all US businesses, account for 50 percent of the gross national product and create between 60 and 80% of the net new jobs each year. Entrepreneurs are confident – often stubborn – risk takers who take on personal debt so they can follow their dreams of launching new businesses. They collectively make up the American business engine that largely drives innovation, invents new products, and creates new jobs.
We at Growthink work with these companies and business owners everyday and have assisted almost 2,000 in the past 10 years. Due to their impact on the US economy, we sure expect to see incentives for entrepreneurial companies in the stimulus plan, in addition to the $200 billion doled out to some of the largest financial institutions in the US. As a country, we don’t need to “bail out” emerging businesses in the sectors that will drive the economy – young firms that are working to improve healthcare, producing energy efficient products and developing environmentally-friendly pesticides – we need to spur them on.
We are following the distribution of stimulus funding closely. This means we’ve had to spend countless hours trying to figure out what’s in the plan and who’s getting what – the plan is about eight inches thick and leaves most of the funding details to the various governmental agencies that oversee specific sectors. It’s been no easy task. Just because the federal government is giving away an unprecedented amount of money in a record amount of time to save the economy doesn’t mean that it’s not being given away by the same bureaucratic system that existed before the stimulus plan.
In our “Bottom Line” series on the stimulus plan, we’ll focus on just that: What’s the plan's bottom line for the Entrepreneurial Economy? During the Series, we’ll provide concise descriptions of the business opportunities in various sectors and provide insight into how to receive funding. We’ll also provide honest feedback on the results of the program from the perspective of the entrepreneurial community.
So far, we’ve come across reasons to be optimistic. The plan includes programs for entrepreneurial sectors and includes promising opportunities for innovative, growth-oriented firms, such as:
- More than $60 billion dollars in funding, grants and tax credits to promote energy efficient and renewable energy programs and products;
- $7 billion to extend broadband services to underserved communities;
- A focus on alternative sources of energy;
- Almost $20 billion for healthcare technology;
- $1 billion for a “Health & Wellness” Fund;
- More than $15 billion for research and upgrading research facilities focused on key areas of innovation, such as climate change, biofuels, disease control and prevention, and technology innovation; and:
- Enhanced and streamlined programs through the SBA.
We’ve also seen some early outcomes that give us cause for concern. Of course, there were those AIG bonuses, luxurious private jets flown by executives from failing automakers to beg Congress for bail-out money, and the hundreds of billions of dollars given to the firms that helped get us in this mess in the first place. And hucksters, of course, have recently populated email spam folders with promises of stimulus funding in return for credit card information.
But we’ve also seen frustration on the front lines when we’ve spoken and worked directly with leaders of promising businesses in those targeted sectors. How do I apply for the funding? Am I eligible? Where do I even find the information?
Of course, part of the confusion and a lack of clear information are inevitable – current systems to notify businesses of the methods to access these funds are inadequate for such a surge in new programs. But the confusion is largely due to the same complaints that start-ups and small businesses have expressed about government “support” programs for decades: It’s difficult to even figure out what’s available and how to apply for the resources, and continues to be in the age of the Internet.
During the next two weeks, we will provide those answers on a sector by sector basis. No fluff, no platitudes, just the Bottom Line for your business.
The next article in our Bottom Line Series will focus on stimulus funds available for entrepreneurial companies in the healthcare sector.