According to the Kauffman Foundation, 64% of job creation comes from business that are less than five years old. Almost two-thirds of jobs are created by new businesses…..that is an astonishing statistic. It sort of makes it easier for governments to focus on how to help stimulate the economy without having to dish out handouts. Here is my three-point plan that should help both in the short-term and the long-term:
Offer incentives for new businesses to grow – this could be done through grants, loans, subsidies, tax breaks, lower rent, etc. The key is to encourage businesses to grow because when companies grow, they need to hire more people.
Offer expertise on how to grow – most businesses want to grow, but most do not know how to do so effectively. Put together a team of experts that have had success in helping organizations grow and give new businesses access to their expertise.
Teach business skills early and often – incorporate business skills into high school. Teach the students about how to be an entrepreneur, the essentials of a business plan and the importance of people in a successful business. You can’t teach students how to come up with a great idea but you can teach them what to do when they have one.
There is no shortage of great ideas and great people to develop them, however, the problems arise when companies grow bigger and faster than the owners can handle. Two-thirds of jobs are created by young businesses and 80% of businesses fail within the first five years. Learning fundamental business skills like how to develop a business plan and which experts are needed would go a long way in helping companies grow. It is not that difficult…..find the areas in which most businesses fail and offer support in those areas.