Speaker Series Addresses and Provides Solutions to the Challenges Entrepreneurs and Small Business Owners Face

The latest survey of small business owners from the National Federation of Independent Business (NFIB) shows founders’ optimism is the lowest it has been since 2012.

That was noted by University of Maryland Robert H. Smith School of Business Dean’s Professor of Finance Michael Faulkender during this academic year’s final installment of the new Finance Grand Challenges Speaker Series. Faulkender, former assistant secretary for economic policy at the U.S. Treasury Department, is the creator and host of the series, which has featured prominent national figures in the world of finance.

On May 7, the series featured its most high-profile guests to date – Maryland U.S. Senator Ben Cardin and Linda McMahon, former administrator of the U.S. Small Business Administration (SBA) and former CEO of World Wrestling Entertainment. The senator is a senior member of the Senate Small Business & Entrepreneurship Committee and has previously served as its chairman. Regarding the NFIB survey he said, “I’m somewhat puzzled because I think there are many opportunities in our economy. I see small companies succeeding and doing extremely well.” However, he thinks, “part of it might be interest rates, a tight real estate market, and international instabilities we see in Russia, the Middle East and China.”

McMahon and Cardin agree that reliable, sustained government policy is key for small businesses. “A great impediment to business growth and reinvesting in one’s business is uncertainty about what policies are going to impact it,” said McMahon, “like what taxes are going to be levied or changed, what the regulatory environment is going to look like in the future.”

The former SBA head knows firsthand the financial difficulties entrepreneurs and small business owners face. “I went bankrupt one time and lost everything. My house was auctioned off and my car was repossessed when I was pregnant with our second child.” She said she knows what it’s like to put it all on the line, lose it and then go back for it, but she emphasized, “It’s how you get back up. You’ve just got to continue to have that driving force within you to continue.”

Among the many questions Faulkender asked of Cardin and McMahon was one submitted by several in the audience—what are the secrets to small business success? “If you have a good idea, you know you can do it better than anyone else and you have the drive and entrepreneurial spirit, you have to overcome some of the challenges,” Cardin answered. He noted that access to capital and hiring trained people are some of the toughest hurdles, but the government has a role in helping remove those barriers. “If we can do that, your creative ideas will turn into job growth and wealth.”

It can be difficult for small businesses and startups to sell their products and services abroad. McMahon said, “It’s really important that we have the right tax laws in place and the right subsidies,” for companies to reap the benefits that come with competing internationally. “We have resource partners to help small businesses try to understand the international aspects of business,” noted Cardin. “The state of Maryland has some really good programs to help small businesses navigate doing business abroad.”

McMahon asked the audience, made up mostly of Smith students, “How many of you are entrepreneurs or have an idea for your own business?” A fourth of them raised their hand and Faulkender followed that up by asking his guests, “What more universities can do to facilitate more entrepreneurship?”

Cardin thinks universities can provide counseling and assistance to student startups, especially when those entrepreneurs need things they can’t afford to buy for their businesses. But he said the Smith School and UMD as a whole, are already doing an incredible job of encouraging and supporting entrepreneurship. The university is ranked #5 among top schools for entrepreneurship. “It’s part of the DNA at College Park and I applaud you for that.”