As a corollary to Economic Development Myth 2, that says Entrepreneurs must be created, there’s an even more insidious assumption amongst economic developers about what an Entrepreneur wants. It’s based on the assumption that old-school economic developers make that every business is looking for tax abatements and other government subsidies. In fact, the word subsidies is part of the myth:
Entrepreneurs Crave Government Subsidies
Some economic developers even go so far as to say:
Government subsidies can help create entrepreneurs
No. Not just “No” but “NO! NO! NO!”
Most Entrepreneurs would be content, or even glad, if government offered to leave them alone. A case in point: when I launched an office of small business (KOSBE) we were approached by a group that promised “rapid” SBA loans. These express loans, besides being a bit of a gouge to the business person looking for a micro-loan of $5,000 or $10,000 or $15,000, also had the “rapid” side effect of taking well over four months to be adequately proposed and countered. While I’d turned down the opportunity to provide an on-going audience after seeing the fee gouge, my successor and several others in the region have pitched this “rapid” loan, so I watched carefully to see if I’d missed something.
I thought at first it was a fluke that it took the first applicant about four months to hear back (rejected) but then a second, third and fourth recipient also met the same fate as the first - rejected, rejected, rejected, after having been told within the first two weeks that they were on track to receive the loan. The added benefit: all four waited so long for the “rapid” loan to come through that they went out of business. No lie!
Don’t confuse the Entrepreneur’s natural aversion to government “help” with an interest in working on government contracts; while those do take six months or so to become eligible for while obtaining various certifications (woman- or minority-owned, disabled-veteran owned, HUBzone, etc.) they are contracts that result in actual work, which any Entrepreneur is willing to take on.
Bottom line: Entrepreneurs want challenges, not hand outs. As mentioned before, if economic developers must be involved, the proper approach to entrepreneurship is to build the infrastructure and reduce government help and then get out of the way.
Again, as before, change a few words and it brings out a whole new meaning:
Entrepreneurs seek less government intervention and no bail-outs, but know government can be an exemplary customer, if the government entity knows how to work within Entrepreneur’s constraints.
More on that in the next posting.
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