By Robert Pembroke
The American Dream is in trouble. According to a study (2015) made by Gallup, for the first time in decades, more businesses are dying than are being born. The trend lines — businesses being born and businesses dying — crossed in 2008. “Until 2008, startups outpaced business failures by about 100,000 per year. But in the past six years, that number turned upside down. There has been an underground earthquake. And as you read this, we are minus 70,000 in terms of business survival,” Gallup said.
When I was running our shop, I was told that our marketing territory (Utah) was 0.5 percent of the national market. Today, there are approximately 6 million small businesses in America which employ 60 million-plus workers. Add to that the 20 million individuals in business by themselves and you have about 50 percent of America’s total workforce.
This means that there are approximately 30,000 firms with 300,000 employees in Utah that have more than one employee and 100,000 individual proprietorships, which adds up to a grand total of 400,000 Utahns that depend on small business for employment.
“If I started Subway today, Subway would not exist,” Fred Deluca, founder of the sandwich chain, told CNBC. Deluca said the environment for entrepreneurs in the U.S. has “continuously gotten worse because there are more and more regulations. It’s tough to get people into business, especially small business.”
I have written a sizable number of columns where I opined about the harmful effects of having to a comply with regulations. Thankfully, the Trump administration has recognized that the cost of complying with regulations is a huge detriment for Americans to be able to live better lives.
But there is a “rest of the story” and that is that small businesses and their employees must become a hell of a lot better in order to be able to compete globally and this is where newly selected President Watkins and the University of Utah could do a wonderful service for America.
When I was at the University of Utah eons ago, I majored in business with an emphasis in statistics. The reason I got my Bachelor of Science degree in business was that I flunked out of the engineering school and I found out that I could transfer my mathematics class credits for accounting class credits in the business school. And yes, I got my B.S. in the required four years.
My last year in college at the University of Utah, I learned all about how to become an employee of a large business. We studied case histories about companies like General Motors and IBM and there was not one case history about a small business. Since I was destined to be a small-business employee, I now question the advisability of this curriculum.
As mentioned before, I was able to transfer my mathematics credits for accounting credits, which is what I decided to do. Maybe I should have taken an extra three quarters in accounting studies, but I did not. Again, in retrospect, not having college-taught accounting was not a deterrent to a successful career of owning a small business. I hired accountants.
We must look towards the East because our main global competitor, China, has determined that a successful small-business environment is a key to their global domination. They have instigated all sorts of programs, such as providing government-subsidized funding, to help Chinese small businesses reduce their cost of financing. They are also paying for Chinese students to go to colleges around the world to learn how to be more creative. China is on a fast track to making its small businesses the best in the world — and we need to do the same in order to compete.
President Watkins, I humbly submit the following: Identify what small business needs are for both owners and employees to become successful in the global economy and then develop a curriculum that satisfies this want.
Robert Pembroke was chairman and CEO of Pembroke’s Inc. in Salt Lake City.