Calling Entrepreneurs to Action!
Too often entrepreneurs are portrayed as crazy lone rangers, operating in isolation. The reality is that most entrepreneurs operate within large ecosystems with little proactive engagement or decision making power. Entrepreneurs are often so focused on running a business that they are left out of key policy conversations or advocacy opportunities. Entrepreneurs often rely on other associations to advocate for them. While these organizations are valuable, society needs individual, unique voices of entrepreneurs and not just a bunch of association block votes.
As the next election is fast approaching, we need everyone to vote and more importantly, we need everyone, especially entrepreneurs, to be individually engaged. The COVID crisis shed light on the tremendous impact policy can have on small businesses. Without the active voice of business owners in the development of the Paycheck Protection Program, it did not adequately serve the needs of small business owners, nor address their immediate or short-term challenges.
Our Leaders Need Help
Too often politicians are not entrepreneurs. They are not aware of the nuances and intricacies of running a business. They make policy decisions based on expediency and the constituents who show up, sit in their offices and donate. Unfortunately, this is not the life of an entrepreneur. Entrepreneurs are too busy managing inventory, marketing and HR issues that they cannot sit and chat; they do not have time for such tasks as these activities tend to represent an opportunity cost. The recent economic crisis now shows the true reality — it is an opportunity cost for entrepreneurs to not be involved in policy.
Policy vs. Politics
Before you stop reading and get turned off by my call to action, allow me to explain the difference between policy and politics. Forgiveness requested from those who already know this stuff.
Politics can be defined as a science or art of governing or government. Politics refers to the theory and practice of governance. Policy, in contrast, can be defined as an overall plan that embraces the general goals. A policy can be a course or action that is proposed by a government, an individual, business firm, or any party.
Politics generally revolves around government and its activities. Politics is a term that refers to the organizational process. Policy can be termed as a “principle.” Policy is a set of rules or principles that guide decisions. It is because of the policy that people, an organization, or a party is held accountable. Political parties run the government which all adhere to certain policies.
This distinction is important as entrepreneurs do not have a lot of time to waste. As a business owner, I am not asking you to be deeply invested in a political person or party. However I am asking you to know and understand the policies or actions that leaders are managing on your behalf that can dramatically impact your business and livelihood. Unfortunately, too often pundits conflate the two. As an entrepreneur it is your obligation and duty to know the external environment you are operating in and be engaged in minimizing friction and maximizing market opportunity for you and your business. It is part of your fiduciary duty as an officer of your company.
Why Now?
COVID-19, coupled with the historical and ongoing racial unrest in this country, creates a perpetual gap for entrepreneurs of color. To be blunt, Black and Brown entrepreneurs were screwed before COVID. Today we are even more screwed by the lack of support and even empathy for the additional barriers and hurdles we balance daily.
This past 4 months has upended every aspect of our lives. A June 2020 report by the National Bureau of Economic Research found that the total number of Black-owned businesses in the U.S. fell 41%, from 1.1 million in February to 640,000 in April, because of fallout from the coronavirus. This represents a systemic risk to Black communities and employment.
According to McKinsey & Co.’s US Hispanic and Latino lives and livelihoods in the recovery from COVID-19 report, Hispanic and Latino businesses are no better off. Hispanic- and Latino-owned businesses were already more likely to be classified as at risk or distressed because they tend to be smaller and have less cash on hand. Only 50 percent of them had enough cash on hand to cover two months of expenses, compared with 70 percent of businesses owned by white men. Because of their lower access to credit, affected Hispanic- and Latino-owned businesses also have less access to pandemic aid such as the Paycheck Protection Program (PPP), which relies on relationships with commercial banks.
As evidenced by the data, with COVID not only did our businesses suffer, but so did our communities. We lost more lives, were hospitalized more often and certainly experienced greater vulnerability due to partial or full unemployment.
Business Boundaries
My request of entrepreneurs today is to get involved. To keep top of mind that government policies impact your businesses — on a macro and micro level. Taking time to share your struggles and successes with local and national legislative leaders is important. However it not only takes time, it involves some risk. You do not want your business to be accused of politicking. Therefore, allow me to share one perspective.
Business owners have a responsibility to their shareholders, communities, and employees to participate in the public policy process to enhance business and stakeholder value. The questions is not — “should business participate in the public policy process” but rather — “how do businesses participate in the public policy process.” Your engagement in public policy should be driven by your unwavering commitment to strong fiduciary duty, business governance and sustainable growth.
The goal is not to spend a lot of time, but to allocate some amount of your time to being engaged. Use a pie chart to plot how you spend time on HR, finances, fundraising, operations and the like. Now, find a sliver of time that can be spent being engaged with local and national leaders. Read about new pending policies. Tweet your ideas on how to help your business and those like yours. Talk to your peers about how different policies can impact your business and tell leaders how you feel.
How to Get Involved
Here are five ways to get involved in policy decision making that can positively impact your business:
1. Make a list of the local and national policies that are hurting and helping your business. Brainstorm the change that you want to see and share with others — allies and otherwise. Write an op-ed. Have a conversation.
2. Understand who are your allies locally and nationally in supporting your business needs in the legislature. Reach out to them. Let them know you exist. Tell them about your business and your business needs. Share the stories that help create the policy.
3. Write a letter, tweet or post and share what is working and what is not working. This could take less than 5 minutes.
4. Join or support a business advocacy organization that you think best represents you and your beliefs. Become an active member, read the materials and engage with other members and leaders.
5. Above all else, VOTE!
Resources
There are more organizations that I can count out there committed to helping advocate for small business owners and entrepreneurs. I am not here to choose one for you. However you can find a starter list here.
Before you join, think about three things:
· Does this group reflect my thoughts, ideas and beliefs? Does the membership reflect who I am and what I stand for?
· Does the group have a track record of success and creating the change I want to see?
· Do I trust the leadership, and will they represent me well?
Conclusion
In my humble opinion, entrepreneurs should always be concerned with policy and politics. We know that those who hold power in government, or have influence over government, play a major role in shaping and managing the business environment in which we all operate. They control critical success factors such as the economy, ease of doing business, consumer buying power, competition, the legal framework, labor force, environment, security, education and health, and many others. Disregarding policy and politics is like ignoring one of the most critical success factors for any business — the external environment. Understanding, engaging and helping to shape political party perspectives and policies is essential for any serious business owner or entrepreneur.
I look forward to hearing about your engagement journey and encourage you to start now. Be sure to sustain your efforts through November and beyond!
Check out #EmancipateTheVote!
