{"id":2018,"date":"2021-07-29T19:54:41","date_gmt":"2021-07-29T19:54:41","guid":{"rendered":"https:\/\/www.godaddy.com\/ventureforward\/?p=2018"},"modified":"2022-12-29T00:30:06","modified_gmt":"2022-12-29T00:30:06","slug":"how-to-grow-the-microbusiness-dividend","status":"publish","type":"post","link":"https:\/\/www.godaddy.com\/research\/how-to-grow-the-microbusiness-dividend\/","title":{"rendered":"Mayoral Discussion: How to Grow the Microbusiness Dividend"},"content":{"rendered":"\n

\u201cWe need microbusinesses and they need us,\u201d Daniella Levine Cava, the mayor of Miami-Dade County, said during a panel with six other prominent mayors of U.S. cities on July 15. \u201cTogether we can keep our economy going and growing.\u201d<\/p>\n\n\n\n

\u201cTogether we can keep our economy going and growing.\u201d<\/p><\/blockquote>\n\n\n\n

I couldn\u2019t have said it better myself. Since we started GoDaddy\u2019s Venture Forward initiative in 2018 to study the economic impact of more than 20 million tiny businesses that use our domain name services, we\u2019ve learned the critical role that they play: Communities with a higher density of microbusinesses have lower unemployment, higher median household incomes and are more resilient. During the pandemic, they helped alleviate the impact of business closures and layoffs, particularly in low-income communities. <\/p>\n\n\n\n

The impressive group of mayors on the panel, which was hosted by The Hill and sponsored by GoDaddy, is testament to the rising awareness of the importance of microbusinesses on all of us. <\/p>\n\n\n\n

The group \u2014 which also included James Brainard of Carmel, Indiana; John Giles of Mesa, Arizona; David Holt of Oklahoma City; Brandon Scott of Baltimore; and Nan Whaley of Dayton, Ohio \u2014 shared ideas on what policymakers and government leaders can do to help microbusinesses thrive in their communities. In these six cities alone, there are more than 800,000 online microbusinesses, and two of them joined the panel to give their perspective: Denise Larell, who runs a hair salon in Baltimore<\/a>, and Natasha Williams, whose Miami-based company makes hypoallergenic press-on nails<\/a>. <\/p>\n\n\n\n

Historically, even leaders who sensed the importance of microbusinesses lacked the data to prove it, as many of these enterprises are either too small or too new to be tracked by traditional economic indicators. Through our Venture Forward program, policymakers no longer have to guess. We can now accurately study where microbusinesses are, what is influencing their success, and what they need.<\/p>\n\n\n\n

For example, we know that adding one microbusiness for 100 people to a community drives up median household income by about $500. In a typical community, two jobs are created for every entrepreneur running a microbusiness. And new research<\/a> shows a correlation between microbusiness density and ranking on the Milken Institute\u2019s widely respected Best Performing Cities Index.<\/p>\n\n\n\n

The conversation, moderated by The Hill\u2019s editor-at-large Steve Clemons<\/a>, focused on what the mayors have done to support microbusiness creation and growth, and about what policymakers can do in the future to tap into this often-overlooked segment of the economy. <\/p>\n\n\n\n

Some common themes emerged: <\/p>\n\n\n\n

Make microbusinesses a priority \u2013 <\/strong>Too often, policymakers lump microbusinesses in with small businesses as defined by the Small Business Administration, which can include companies with up to 1,500 employees or more, depending on their sector<\/a>. But Venture Forward data shows that more than 90% of microbusinesses have fewer than 10 employees, and roughly half are \u201csolopreneurs.\u201d<\/p>\n\n\n\n

\u201cAs we move from triage to rebuilding our economy, our big companies are going to be just fine,\u201d said Carmel\u2019s Brainard. \u201cThe best thing we can do for counties and cities is to make sure these small businesses have the opportunity to succeed, hire people and grow.\u201d<\/p>\n\n\n\n

Dayton\u2019s Whaley, who became president<\/a> of the United States Conference of Mayors on July 13, argued that the payback from such an approach is likely to have better results than trying to lure large companies. \u201cFor Dayton and cities across the nation, that\u2019s where the potential for future growth is,\u201d she said. \u201cMost cities recognize that their success isn\u2019t going to come from a magical company moving into the community.\u201d<\/p>\n\n\n\n

Focus on diversity \u00ad\u2013<\/strong> Data from Venture Forward and other sources show that minority- and women-owned businesses were hit particularly hard during the pandemic, highlighting the need for local governments to focus on their specific needs. <\/p>\n\n\n\n

\u201cWe were very particular about making sure that our small business assistance fund went to help businesses that we know typically didn\u2019t get help from the city,\u201d Baltimore\u2019s Scott said. Nearly three-quarters of the $3.5 million in grants from the program went to minority-owned firms, the majority of them women-owned, said Scott, who was elected in 2020. \u201cIt\u2019s going to take a long time to break down the results of decades of disinvestment in certain Black, Brown and poor communities.\u201d<\/p>\n\n\n\n

Rethink regulations \u2013 <\/strong>City governments should reform zoning rules that create unnecessary obstacles for microbusinesses, Brainard said. Fast-growing Carmel, for example, has changed zoning codes to allow smaller storefronts and to end restrictions that prevent entrepreneurs from having a few employees work with them in their homes. \u201cThere are too many regulations that tilt the scale against small, what I would call mom-and-pop businesses,\u201d he said.<\/p>\n\n\n\n

Mayors Brainard, Scott and Whaley also agreed it was important to make microbusinesses a bigger priority at the federal level, while giving mayors authority over how to invest federal funds based on the unique needs of their cities.<\/p>\n\n\n\n

Create separate funding mechanisms \u2013 <\/strong>To support microbusinesses in a meaningful way, cities need to find ways to maintain programs even during tough times and in the face of competing priorities. Holt said he was glad that Oklahoma voters have twice approved measures to create funding mechanisms for entrepreneurs outside of general funds since 2007. \u201cThe first priority is always going to be core services like police and fire and streets and sanitation and parks. When you pit those services against support for microbusiness, you know who is going to win that battle,\u201d he said. \u201cI\u2019d encourage mayors to create separate pots of money.\u201d<\/p>\n\n\n\n

Training and education \u2013 <\/strong>Venture Forward data shows that access to broadband, especially if available for the lowest-income residents, is critical for communities that want to increase microbusiness density. But access alone is not sufficient. Many would-be microbusiness owners need help with everything from creating a website to understanding how to market themselves effectively on social media. <\/p>\n\n\n\n

\u201cA lot of our small businesses needed some very basic technical assistance to be literate and to communicate with their customers,\u201d Giles said. \u201cIt pointed out that the digital divide is not just a reality in our low-income communities, but also in our business community.\u201d<\/p>\n\n\n\n

A little know-how can go a long way in terms of helping a microbusiness survive and grow. Larell shared how she saved her hair salon by quickly learning how to create a website and produce webinars to show customers how to take care of their hair at home. \u201cI went from standing behind a chair to learning something new, and my customers learned along with me. COVID-19 brought out something in me,\u201d she said.<\/p>\n\n\n\n

As CEO of GoDaddy for the past two years, I\u2019ve been blown away by the creativity, passion and potential of people like Denise and Natasha. To support them, and to support mayors focused on building back stronger, we are pledging to work in the following areas: <\/p>\n\n\n\n