The Bipartisan Policy Center and Goldman Sachs 10,000 Small Businesses Voices, in partnership with small business owners across the country,today released a new report – From Pandemic to Prosperity: Bipartisan Solutions to Support Today’s Small Businesses. The new report urges Congress to reauthorize the Small Business Administration (SBA) for the first time in over two decades, allowing programs supporting small businesses to be reimagined to reflect the realities of today’s economy.
The report crystalizes more than a year of conversations with small business owners, as well as national surveys of small business owners conducted by Goldman Sachs 10,000 Small Businesses Voices, and discussions with current and former government officials. Its findings underscore the urgent need for Congress to further support small businesses and reauthorize the SBA to address persistent challenges small business owners are facing, primarily: recruiting and retaining workers in a highly competitive environment, ensuring that employees have access to quality, affordable child care, accessing capital and competing for government contracts.
“Small businesses add to the economic vitality of our country, but outdated policies are holding them back,” said David Solomon, chairman and CEO of Goldman Sachs. “Our new report shows bipartisan solutions, like expanding access to retirement plans and investing in high-quality childcare, will advance economic growth.”
“When Congress last reauthorized the Small Business Administration, Amazon was best known as the world’s largest river, and the iPhone was still seven years away from being introduced. It is imperative that Congress reimagines the role the Small Business Administration can play in reinvigorating America’s economy with modernized programs offering small business owners the support they need to succeed today – not the now seemingly-ancient economy of 20 years ago,” said Natalie Kaddas, CEO of Kaddas Enterprises.
The policy report identifies for Congress and policymakers critical challenges facing small businesses as members consider modernizing the SBA through reauthorization and supporting small businesses more broadly. Select key findings include:
Small Businesses Are Unable to Compete with Larger Businesses for Talent: Three-quarters (75 percent) of respondents to a recent Goldman Sachs 10,000 Small Business Voices survey who are having difficulty retaining employees say they can’t afford to compete on salaries, two-thirds (67 percent) say they can’t afford to compete on benefits, and 39 percent say they can’t afford to offer a retirement plan. The existing policy programs and incentives intended to address small business hiring and retention challenges often have low adoption because they are overly burdensome and complex.
Affordable, Reliable Child Care is Critical for Workers, Small Business Owners:Over half of small business owners in the Goldman Sachs 10,000 Small Businesses Voices survey said they or their employees had faced childcare challenges during the pandemic. For small business child care providers, the pandemic also highlighted the deficiencies in the basic business model of child care. The cost of providing quality care exceeds what most parents and families can afford to pay—even with existing means of government support.
Access to Capital Inequities Will Persist Beyond the Pandemic: In the Goldman Sachs 10,000 Small Businesses Voices January survey, 48 percent of Black small business owners said they expect to take out a loan or line of credit for their business in 2022, compared to 33 percent of all survey respondents. And just 19 percent of Black small business owners were “very confident” in their businesses’ ability to access capital, compared to 31 percent of all respondents. Research has shown that Black-owned businesses deemed to be “low credit risks” are still less likely than other small businesses to receive all the financing they seek, driving the ambition/confidence gap.
Simplifying Government Contracting is Essential to Small Business Participation: Every year, the federal government spends hundreds of billions of dollars buying goods and services, from software and technology to furniture and construction.The federal government’s record in meeting contracting goals for subcategories—including for disadvantaged small businesses and women-owned small businesses—has been mixed. For example, the government has only twice met its women-owned small businesses contracting goal since it was established in 1994.
“Supporting small businesses as they move beyond the pandemic will require thoughtful, forward-looking policies designed to serve small business owners in today’s economy,” said Joe Wall, National Director of Goldman Sachs 10,000 Small Businesses Voices.“While Congress and the Small Business Administration took critical, commendable steps to aid small businesses in the face of strong economic headwinds during the pandemic, a Congressional reauthorization of the Small Business Administration provides an ideal opportunity to revitalize the federal government’s support for small businesses across the country.”
“Congressional reauthorization provides the opportunity for a healthy exercise to make certain that federal policies and programs reflect current economic realities so they can achieve their desired effect,” said Dane Stangler, Director of Strategic Initiatives at the Bipartisan Policy Center. “Remarkably, across industries and regions, the challenges most small business owners face revolve around access to capital, workforce, government contracting and childcare, providing a clear blueprint for Congress as it considers reauthorizing the Small Business Administration to better serve those striving to create and sustain businesses in our modern economy.”