By: Justin Velez-Hagan, National Executive Director
Inc. magazine recently published an article that gave the author’s take on a “highly practical, eminently doable, totally reasonable plan to revitalize the American Dream.” (Bluestein and Barrett, July/August 2010) Admittedly, they came up with some stellar ideas for jump-starting up-starts! Given that The National Puerto Rican Chamber’s number one concern for our economy is business growth and job creation, we thought this article deserved a close look.
Promote Entrepreneurship in all schools, not just B-schools
This seems like a common sense idea that most overlook. Universities far too often rely on B-school students as society’s sole source of future entrepreneurs. However, many of the top companies in the world were founded by individuals who had no business background. Take, for example, Google–its founders, Larry Page and Sergey Brin, were engineering students vying for a Ph.D. when they decided to start the multi, multi-billion dollar company.
Investments should be made in university programs that promote entrepreneurship across disciplines in order to capture more creative minds that may also have the potential for business success.
Ensure the greatest minds from around the world continue to invest in America
A story highlighted in the article points out what is wrong with immigration policy today. After a U.S. venture capitalist came up with enough seed money, two British businessmen founded a successful online company with the intention of having its headquarters here in the States. With a target market in the U.S. and the greatest potential for business growth within our borders, they had no problem raising $1.2 million to get their idea off the ground and began hiring and expanding their business. Unfortunately for the two, as well as our economy, our policies forced their return to Britain once their 90 day Visas expired. If they had been allowed to remain in the U.S., all 20 of the jobs their company had produced during its first year of operation would be in Colorado.
In order to prevent this from happening again, a few ideas are starting to gain some attention. Legislation, submitted by Senators Kerry and Lugar, will provide foreign entrepreneurs a two-year visa if they attract $250k in U.S investments, and will further make green cards available to those entrepreneurs who have created at least five full time jobs and $1 million in revenue. The proposal will not only provide an incentive for immigrants to bring value to our country, but will also guarantee much needed job growth for American Citizens.
Speed up start-ups
One of the most appealing ideas we have come across mirrors a program we are implementing here at The National Puerto Rican Chamber of Commerce. Because so many good ideas lack the help they need to get started, we should invest in programs designed to provide what we call “micro-help.” The idea revolves around three varied concepts which are often incorporated into one package.
First, start-ups will be provided small amounts of funding, usually less than $20k, as seed money. This money can be an outright grant or returned as a portion of future profits. Either way, studies have proven that most companies in this country get started with less than $5,000 cash.
Second, micro-lending programs can provide the same start-up or expansion capital needed to get the ball rolling. Organizations around the country, such as Accíon out of Texas, offer loans of $25,000 and under and have an incredible pay-back rate of 95%. Considering that Accíon has also created 6,000 jobs, no one can argue with their effectiveness.
Lastly, many entrepreneurs have great ideas, but just lack the business know-how to efficiently run the organization. Many passionate budding small businessmen and women are crippled by early mistakes that are entirely avoidable with the proper coaching. More programs that provide coaching or mentorship services, especially during the initial stages of a start-up, would ensure a much higher success rate for small businesses. One such company, TechStars out of Boulder, CO, offers a little seed money, some office space, and top-notch mentors to work side-by-side with small businesses during their first few months to ensure a smooth take off. In order to operate its business, TechStars requires a small piece of the action in return. It’s a small price to pay for nearly guaranteed success.
With so much emphasis being placed on the need for job growth within our borders, could it be time we started taking a common sense and pragmatic approach that has proven results for small businesses? After all, every business in the U.S., no matter how large or how many thousands it employs, was once a small business.