Challenges Facing Entrepreneurs and American Business

SUSIE GHARIB: Our next guest says the weak economy is also scaring off would-be entrepreneurs. The number of start-up businesses is now at its lowest level in 25 years. A survey by outplacement firm Challenger, Gray, & Christmas shows that just 3.3 percent of job-seekers decided to start their own businesses so far this year. That compares to about 8 percent on average over the past decade.

John challenger, CEO of Challenger, Gray, and Christmas, joins us now.

Hi, John.

JOHN CHALLENGER, CEO, CHALLENGER, GRAY, & CHRISTMAS: Hi, Susie.

GHARIB: Well, as you know, we`re focusing tonight on how to fix the economy. So what do you think are the fixes that would help small businesses and help innovators and entrepreneurs?

CHALLENGER: Well, certainly entrepreneurs do need access to capital. They use to go to their families, they would dip into savings accounts, they might put money in their credit cards, they might get a home equity loan.

But now it`s very hard to do. So people are opting for safety. They`re going — even with high unemployment they`re going back into the job market and they`re staying away from the extra risk of trying to start a business.

GHARIB: So what would they need to have so that they could finance their business and that they would feel confident about going out and starting a new company?

CHALLENGER: Well, we need easier access to and lighter regulations so companies and entrepreneurs can get their licenses quickly. We need bankers and ways that the government can help community banks support the lending that they do on taking chances, like they used to do, for local businesses.

We need to open up our export market. It`s crucial that the U.S., as we think about the 21st Century, become again the shop-keeper to the world. That we provide our goods and services to the rest of consumers and businesses around the world. And we`ve kind of lost that position or at least think we might be losing some of that position.

GHARIB: As we reported a little earlier in the program, President Obama is expected to announce a jobs package on Labor Day. And reportedly he`ll propose — here`s a list of them, tax breaks for businesses that hire new employees, tax cuts for the middle class, support for struggling sectors of the economy.

And then during his bus tour he also talked about infrastructure investments. These sound like very familiar ideas. Do you think they will create jobs?

CHALLENGER: Well, certainly some of the tax cuts will put money back into people`s hands. We want that money to go to consumers who have a 100 percent propensity to spend so they go out and put that into the economy.

But we also need to move away from spending that, unfortunately, supports all of the safety net programs. We have to make decisions today in the country. Do we want to invest the limited funds we have in education, in infrastructure like technology, or creating better airports, better seaports to allow business to compete and take advantage of that better infrastructure, again, to compete with businesses around the world?

We`re really in a competition for jobs in a global economy with people all over the world.

GHARIB: All right. All good ideas. Lots to think about. Thank you, so much, for coming on the program.

CHALLENGER: Thank you.

GHARIB: And we have been speaking with John Challenger, he`s CEO of Challenger, Gray, & Christmas.


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