Small Business: Investing In Our Economic Future

Although historically few ethnic minority entrepreneurs might encounter a number of disadvantages such as low wages, discriminatory hiring practices and low access to capital, they do tend to have very high entrepreneurial skill and to have very high rates of entrepreneurial turnover. In a comparative study of Black and Asian American entrepreneurs, the authors find that the entrepreneurs from both groups had similar entrepreneurial skill and had similar rates of entrepreneurial exit. Yet the Black American entrepreneurs were more likely than the Asian American entrepreneurs to establish their own successful online home based businesses. This finding suggests that the differences in opportunity outcomes are not motivated by differences in ethnic group, but by differences in local access to resources, entrepreneurial training and entrepreneurial opportunity. The authors suggest that this is because the entrepreneurial opportunities available to these two groups in the U.S. are so different that it makes little sense to expect ethnic barriers to be removed just by local access to resources.

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Small Business: Investing In Our Economic Future

Although historically few ethnic minority entrepreneurs might encounter a number of disadvantages such as low wages, discriminatory hiring practices and low access to capital, they do tend to have very high entrepreneurial skill and to have very high rates of entrepreneurial turnover. In a comparative study of Black and Asian American entrepreneurs, the authors find that the entrepreneurs from both groups had similar entrepreneurial skill and had similar rates of entrepreneurial exit. Yet the Black American entrepreneurs were more likely than the Asian American entrepreneurs to establish their own successful online home based businesses. This finding suggests that the differences in opportunity outcomes are not motivated by differences in ethnic group, but by differences in local access to resources, entrepreneurial training and entrepreneurial opportunity. The authors suggest that this is because the entrepreneurial opportunities available to these two groups in the U.S. are so different that it makes little sense to expect ethnic barriers to be removed just by local access to resources.

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As more entrepreneurial activity declines nationwide due to the global recession, more attention will be focused on increasing access to capital and improving access to work for entrepreneurs. Since technology startups are the fastest growing segment of entrepreneurship, any attempts to increase access to venture capital will need to be accompanied by efforts to increase access to working capital. Lenders have been hesitant to advance money to entrepreneurs, even when they are doing a good job managing their business. Home-based businesses have typically been considered a minor enterprise, requiring far less investment than more traditional businesses. This has made the funding process difficult for entrepreneurs. However, new legislation, such as the Small Business Act and the Entrepreneurship Assistance Act, could change that.

Economists are still uncertain about the long term economic impact of increased entrepreneurship. Increased innovation seems to be producing better results overall than more incremental business activities, such as marketing research or advertising. However, studies of traditional businesses show that small innovations tend to be implemented over time, over a series of years, rather than all at once. Thus, the pace at which new businesses begin producing real revenue and profit may lag behind other more direct economic activity.

For those who support entrepreneurship, the capitalist system offers too many advantages to allow entrepreneurs to ignore it. The entrepreneurial spirit is part of the human condition, and it is not always possible to realize all of our potential in a single lifetime. By providing an alternative means for earning money, the capitalist system encourages people to think about ways to produce surplus income. As more people enter the marketplace and compete for markets, increasing competition boosts prices, which stimulates the economy.

By promoting online business opportunities, entrepreneurs can help the economy recover by providing services that consumers desperately need at affordable prices. They do not have to start their own businesses, but they can use their knowledge and experience to build successful online businesses. A growing number of workers are being offered flexible work schedules and benefits by online businesses. In response, there is a growing demand for qualified professionals to launch new ventures and run them efficiently.

However, small entrepreneurs cannot launch or manage their businesses on their own. Small businesses are usually supported by family or friends. If those individuals are unable to continue working, their talents can be utilized by another set of entrepreneurs. This creates a pool of talented individuals ready to launch new ventures when the economic conditions are favorable. Without these investors, many new businesses would fail.

Many small businesses rely on the support of local, regional, and national economic development agencies. Through such organizations, small business owners can tap the financial resources of local officials and get assistance in setting up their businesses or seeking new customers. Some economic development agencies focus only on particular regions or industries, so entrepreneurs should research local officials in their area. They may find that an agency has several projects that they could submit to, which would increase their chances for receiving grants.

Online websites also provide information for entrepreneurs interested in how to get involved in local economic development. Websites can provide basic information about how to get a grant, as well as detailed instructions on how to apply for funding from local officials. Many entrepreneurs use online sites to build a network of local, small businesses. These networks can provide the resources that entrepreneurs need to grow and establish successful businesses. In turn, these networks create jobs for local residents, who can benefit from the increased sales and business generated by these small businesses.

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