For many businesses, August is a “quiet” month where you can review your strategic and tactical plans for either your “busy season” or the next year. Right now, many people who either lost their jobs during the pandemic or want to find a better balance in their lives are opening their own businesses.
The goal for both paths is to find ways to generate a sustainable revenue stream and manage expenses based on those growth goals, focusing on opportunities to enter new markets or serve existing customers better.
These discussions inevitably turn to working with the government – whether that’s federal, state, or local – and many leaders quickly change the subject because of the challenges they’ve faced trying to get traction.
None of this is easy. Small and start-up businesses with good ideas are finding it more difficult to break into markets, and the number of new business formations has dropped by nearly 50% since the 1970s.
A smaller number of large corporations in three quarters of industries now control more business than they did 20 years ago. This is true across health care, financial services, agriculture and more. With fewer players and less competition, the price of good and services have gone up and wages have stagnated. Markups, or charges over cost, have tripled over the past 40 years.
With that, small businesses still account for nearly 44% of U.S. gross domestic product and employ nearly half of American workers.
But there may be hope on the horizon. President Joe Biden signed an executive order on July 9 with 72 specific initiatives intended to reduce the trend of corporate consolidation and increase competition.
Observers point to five initiatives that may help small businesses, including ones that would:
- Require federal agencies to increase competition in their procurement and spending decisions, which hopefully will enable and streamline the burdensome requirements and regulations that make it difficult for small businesses to participate.
- Reduce prescription drug costs that drive up small businesses’ health care costs to the point where many put their growth plans on hold.
- Tell the Federal Trade Commission (FTC) to issue rules that would limit manufacturers from voiding warranties and allow self-repairs or third-party repairs of their products.
- Call on the Department of Justice and FTC to enforce antitrust law vigorously and gives them the power to challenge prior bad mergers.
- Encourage the FTC to create rules that stop online companies from using their small-business customers’ learnings on their platforms to create copycat products that they can display on that platform more prominently.
Moving the Biden order from vision to reality depends on execution – something we rarely see in Washington where legislators often entrench in positions driven by politics rather than principle. Bills passed by one chamber in the past six months still await action in the other. Legislators struggle to find middle ground and pass legislation that gets us moving along the right path, failing to recognize that there’s always another day to keep the ball moving in the right direction.
So, the 12 agencies that are tasked with implementing Biden’s 72 directives have an uphill battle in front of them once Congress returns from its month-long “break” to their home districts for listening sessions.
Should small businesses embrace all the president’s proposals? No. Proposals like a ban on non-compete clauses are troubling for many, but nobody ever gets everything they want.
I hope you’ll take advantage of any opportunity you see to tell Sens. Tom Carper and Chris Coons and Rep. Lisa Blunt Rochester what you’d like to see them do going forward. I’d like to also see similar initiatives on the state level, including reducing onerous licensing rules and eliminating the preferred vendor rules to allow more small businesses to do business with the state.
In the meantime, let’s hope August is a month where these federal agencies can move forward on the Biden plan.
By Rob Martinelli
Rob Martinelli is the president and CEO of Today Media, the parent company of Delaware Business Times.
