Report Shows Historic Highs For US Entrepreneurship
The Global Entrepreneurship Monitor (GEM) has released its 2022–2023 United States Report, revealing a significant surge in entrepreneurial activity, reaching historic highs in GEM’s history with rates of 18% for women and 20% for men. The report highlights a growing interest in entrepreneurship among young people, a shift toward manufacturing, particularly driven by women, and dispels assumptions that tech entrepreneurship is the norm. Notably, it raises questions about the support and sustainability of businesses started by Black and Hispanic entrepreneurs. GEM’s data serves as a vital resource for understanding and promoting entrepreneurship across various sectors and populations, emphasizing its potential to bring about social and environmental advancements.
Source: Babson
Threat Of Government Shutdown Raises Small Business Concern
The looming threat of another government shutdown on September 30 is raising concerns despite the avoidance of a massive default crisis over the summer. While some politicians downplay the impact, a shutdown would have catastrophic consequences for small businesses, which heavily rely on federal support, loans, and contracts. Minority-owned businesses, in particular, face greater challenges in securing financing, with Black and Hispanic business owners being two to three times less likely to receive the necessary funding. Small businesses resorting to expensive short-term lenders during previous shutdowns, like Michael Pearce, experienced substantial financial burdens. Prolonged shutdowns can lead to layoffs, downsizing, and hesitancy among entrepreneurs, ultimately impacting intergenerational wealth, jobs, and community opportunities.
Source: America’s Small Business Network
Business School Graduates Turn To Entrepreneurship Through Acquisition
Entrepreneurship through acquisition (ETA), a concept where business school graduates buy existing companies instead of starting new ventures, has gained popularity recently. While initially limited to Harvard and Stanford MBAs, the surge in interest is partly due to a challenging job market for MBAs in consulting, finance, and technology. Successful ETA entrepreneurs have played a significant role in spreading its appeal to other schools, resulting in expanded ETA curricula and programs across the country. Most searchers have seen profits, but the process involves careful planning and risk assessment. ETA can be self-funded or done through a core search fund, and it offers more flexibility and a sense of purpose compared to traditional corporate careers, attracting a more diverse group of entrepreneurs.
Source: Bloomberg
How The Temporary Halt On ERC Claims Affects Small Businesses
The IRS has temporarily halted processing new claims for the employee retention tax credit (ERC), a pandemic-era small business tax break, due to a surge in “questionable claims” and a cottage industry of specialist firms encouraging small businesses to improperly claim the credit. The pause has left some filers in limbo while the IRS works on providing further guidance. IRS Commissioner Danny Werfel urges caution among businesses that have received ERC payments improperly, as they may need to repay those funds in the future. The IRS is developing guidance on how to withdraw unprocessed ERC claims and establishing a settlement program for businesses that wrongly received the credit and wish to return it. Small businesses are advised to consult with qualified tax professionals to ensure proper ERC claims and compliance with the program’s eligibility criteria. The deadline for amending 2020 returns for legitimate ERC claims is approaching, giving businesses time to make valid claims, while new ERC claims won’t be processed until at least 2024.
Source: CNBC
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