Though the temperature is dropping outside, governor-elect Jack Markell is planning to make Delaware’s climate warmer for small businesses.
But the First State’s $560 million budget deficit guarantees that will be no easy task, Markell said.
“Delaware is not going to win the battle of the big check,” he said. Grant money for small businesses will be in short supply this year, he said, adding that state government is not the best source of money for fledgling entrepreneurships.
Attracting venture capitalists to the state will be the key to getting small businesses the financing they need to be successful, he said. Venture capitalists need to know that Delaware is a state where small businesses can succeed, Markell said, and he plans to share that information with any venture capitalist who will listen.
But small business owners need more than seed money to succeed. Creating a climate that promotes small businesses means improving the quality of life in Delaware, Markell said. For example, ensuring the First State’s schools are in top form and keeping taxes low will go a long way, he said.
“We’ve been so dependent for so long on big companies, we haven’t had to be entrepreneurial, but that is changing,” he said.
More tax incentives and government handouts are not part of Markell’s plan for small business success.
While reasonable taxes are important for promoting small business, he said raising business taxes to help balance Delaware’s budget is not out of the question, Markell said, stressing that he will focus on cost savings before considering tax increases.
Low taxes are a big selling point for new small businesses, but Markell said he plans to focus on growing the 73,000 small businesses in the First State, rather than trying to attract new small businesses.
He promised to create 25,000 new jobs during his first term in office and growing small businesses will be a big part of that, he said.
Between 2004 and 2005, businesses with fewer than 500 employees created 5,403 jobs in Delaware, while businesses with more than 500 employees eliminated 3,695 jobs, according to the U.S. Small Business Administration.
Delaware is a good state to start and grow a small business, said Bob Kleszics, who opened Harvest Market Natural Foods in Hockessin in 1995. The First State’s mild regulations make it an easy state to do business in and the lack of a sales tax is an incentive for shoppers who live over the border, he said.
But one thing Delaware could do better is promote business coaching, said Kleszics.
“Business owners tend to learn from their mistakes and there’s nothing wrong with that, but some mistakes are fatal,” he said.
More than 200 Delaware small businesses went bankrupt in 2005, according to the most recent data from the U.S. Small Business Administration.
Kleszics belongs to a business coaching group and said its members gave him the confidence to move into a larger location on Lancaster Pike in 2005.
He is hopeful the Markell administration will be good for small businesses because of the governor-elect’s business experience with Nextel and the fact that he is a Democrat.
“Democrats are not anti-business,” Kleszics said. “That’s the furthest thing from the truth.”
Bill Kulish, owner of Quintechs in Yorklyn, is also optimistic the Markell administration will be good for business in Delaware.
“I’m confident the new administration will have a positive impact to stimulate the economy and get the country heading back toward the American dream,” he said.
Delaware already has a lot going for it as a pro-business state, he said, especially its small size that promotes a certain amount of networking and camaraderie among business owners.
But the First State’s small size can also have a magnifying effect on business fees, since small businesses generally pay the same amount as large businesses, Kulish said.
He agrees that more business coaching and networking opportunities, state-sponsored or not, would be a huge bonus for the small business world in Delaware.
