The Roundhouse in Santa Fe (Photo by Peter St. Cyr)
It was obvious from listening to Governor Martinez’s State of the State address last week that job creation will be the central theme of her administration – at least in the near future. But where are these jobs to come from?
We must ask, what is the correct path to sustained economic growth?
To answer this question, take a step back in time and examine the writings of an early economic thinker, Jean-Baptiste Say (1767-1832). Say’s law, distilled, says “supply creates its own demand.”
For the entrepreneur or small business owner, Say’s law simply translates to our government allocating resources (less taxes, less regulation) to the productive side of the economy – the side that produce real goods and real services and real jobs.
Martinez gets Jean-Baptiste Say
I don’t know if our new governor has read Say or not, but she clearly understands that good economic and government policy mean getting out of the way of entrepreneurs and small businesses and empowering the productive side, as she said here in her State of the State address:
Thomas Molitor
“I’ve long said that government doesn’t create jobs.
“Government creates the environment where small businesses can create those jobs.
“It’s the small businesses – the mom and pop shops – the small startups that get lost in the layers of regulatory red tape in which different state agencies require different permit processes.”
To address regulatory problems, Martinez proposes standardizing multi-agency administrative practices by passing what she is calling the “Red Tape Reduction Act.”
In other words, give small businesses tools, not rules, to get their businesses off the ground in a shorter period of time and in a less costly way so they can create products and services that people want and will pay for, and that, in turn, will create jobs.
Tool Shed New Mexico
There are a lot of jobs that will never return to New Mexico after this horrendous recession ends. We need to rethink, reinvigorate and reinvent our economy. That’s not a depressing scenario – it’s an altar call for all of us to answer with innovative solutions.
One idea that sprang to mind as I was listening to the governor’s speech is for the government to start a website dedicated to providing tools to help New Mexicans grow their businesses. Think of the website as a “tool shed for prosperity.”
The way I see it, Tool Shed New Mexico would be a lot of things. For starters, the website content strategy will be long on practical advice and resourceful links and short on rah-rah partisan rhetoric. The information and tools on this site will be designed specifically for small and medium-sized businesses – and for people who advise and support them.
Tool Shed New Mexico would provide free access to a wide range of resources. It would act as a gateway to government and private sector business information, news and services. On this site there would be practical resources and links to information to help business owners and managers start, manage and grow their businesses – and deal with the day-to-day challenges they face.
Tool Shed New Mexico would be a clearinghouse for everything a small business needs to know and do in moving its business forward:
- Starting a new business – frequently asked questions
- Is your business idea viable?
- Writing a business plan (free template)
- How to keep business records
- Cash flow forecasting
- Calculating your break-even point
- Setting terms of payment
- Tax obligations when setting up a business
- Pricing your product
- Sources of capital
- How to raise capital for your business
- Business grants for New Mexicans
- Tips on applying for a loan
- What investors look for in a business
- Writing a marketing plan (free template)
- How to avoid common marketing mistakes
- Tips on developing a website
- Using e-commerce to generate revenue
I envision Tool Shed New Mexico as a commerce community that shares tips and advice – not unlike a Duke City Fix – only for small business owners.
When you are starting a business, the most important thing is to protect your initial capital and not be wasteful. Sure, small businesses make mistakes (that’s how they learn and grow), but if they had access to information and mentors who have already traveled the road, it sure might make the road less bumpy for them.
Take resource sharing, for example. Typically, startups and small businesses do not need a full-time accountant, or a full-time HR person, or a full-time marketing person. Tool Shed New Mexico could be a nexus where small businesses find experienced professionals who are running a consulting model in which he or she divides his or her time between several small businesses.
Governor Martinez said in her speech that big corporations have teams of lawyers and accountants to help them. She’s right. But while mega-corporations are busy outsourcing jobs to the world, the Tool Shed New Mexico community will be busy crowd-sourcing solutions that lead to small business growth and jobs for New Mexicans.
Let’s not lose sight of the small guy
The governor, in her speech, threw around a lot of newly-proposed entities to address small business barriers. She has proposed to work toward cutting wasteful programs that do little for job creation and redirect those resources to open an Office of Business Advocacy within the Economic Development Department.
As mentioned earlier, Martinez proposes standardizing conflicting agency regulatory practices by passing the Red Tape Reduction Act.
There’s also a proposal from the Martinez administration – presented last week to the members of the New Mexico Tourism Coalition – to merge the Department of Tourism with the Department of Cultural Affairs. It appears this proposal would eliminate the need for a cabinet-level secretary of tourism – a position which previously reported directly to the governor.
I also see that Rep. Patricia Lundstrom and Sen. Carlos Cisneros have introduced House Bill 29, which would merge the departments of Tourism, Economic Development and Workforce Solutions into a new entity named the Commerce Department.
Already, I’m wondering, where would a resource website such as Tool Shed New Mexico reside?
Hopefully, the small business person doesn’t get lost in the government reorganization that appears to be a top priority for legislators in the 2011 session.
Molitor is a regular columnist for this site. You can reach him at tgmolitor@comcast.net.
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