If we had President Obama’s ear, here’s what we’d say.
Dear Mr. President,
The Association for Enterprise Opportunity (AEO) applauds your promise to create three million new jobs as part of your American Recovery and Reinvestment Plan. More importantly we want to help and we know how.
For nearly two decades AEO and its member organizations have been helping to create thousands of new jobs each year by supporting Main Street businesses. AEO members – non-profit microenterprise development programs – help new entrepreneurs identify strategies, opportunities, innovative ideas, and solutions for business success. From business plan development to new marketing concepts and microfinance services, AEO members exist to help entrepreneurs succeed.
Investment in microenterprise development is an excellent strategy to help create jobs and rebuild our economy. Defined as a business with five or less employees, microenterprises are a major source of employment for rural areas, urban neighborhoods and everywhere in between. On average, microenterprises create nearly one million new jobs per year and represent 18% of all private employment according to AEO, the national association for microenterprise development programs.
As unemployment rates sky rocket, AEO predicts that there will be an increased demand for microenterprise development services. A good percentage of the unemployed will turn a hobby, skill, or talent into a new business. AEO members can help them seize business success and create jobs for themselves and others. From business plan development to technology training and access to non traditional sources of credit – AEO members have the resources and know-how to get businesses up and running.
There is a lot of talk right now in Washington, DC about helping small businesses, in particular Main Street businesses. The discussion seems to revolve solely around tax cuts, but AEO would argue that tax cuts are not enough to stimulate job creation from microenterprises. If the government is serious about creating jobs on Main Street, investment in microenterprise development should be a top priority.
AEO suggests a three step approach.
Step 1: Designate $1 billion in capital to microbusinesses and get credit flowing on Main Street America.
Reinvest in what works by increasing the dollars available to:
- Community Development Financial Institutions (CDFI) Fund
- The Small Business Administration (SBA) Microloan Program
- PRIME (Program for Investment in Microentrepreneurs) program and allow all states to compete for these funds
- Women’s Business Centers
- The USDA’s Rural Microenterprise Assistance Program (RMAP)
- Create the American Dream Fund - a national revolving loan pool, with a singular mission to provide needed capital and investment to microbusinesses in every state.
Step 2: Invest in the infrastructure of the microenterprise development industry.
- Establish an Office of Microenterprise Development within the federal government to harness the energy of microenterprise and its power to innovate and percolate up the economy, understand its impact, trends, and create effective policies that will benefit millions of individuals, their families, and their communities
- Provide core funding to the microenterprise development industry
- Reinstitute the Presidential Microenterprise National Awards to recognize the tremendous economic impact of microenterprises.
Step 3: Direct capital into our communities and support communities in need.
- Create a fund for business incubators that will be supported by microenterprise development organizations providing entrepreneurs with space to access resources, networking, and technology to successfully launch new businesses.
- Entrepreneurship is a viable opportunity for returning veterans, particularly those who return with disabilities.
- Funding to provide business skills training and access to capital will help the microenterprise development field meet the unique needs of veterans and their families looking to start new businesses
- Tap into the ingenuity and creativity of America’s youth and provide annual fellowships to youth social entrepreneurs who are working to bring solutions to local and global problems. The fellowships will provide these budding entrepreneurs with the skills they need to be successful business owners.
Tax cuts and tax incentives for small business are also important, but an honest investment like the one we suggest would show a true commitment to US entrepreneurs. Small businesses need our help now more than ever and the microenterprise development field is hoping for your support.
Sincerely,
The Association for Enterprise Opportunity
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