For the past decade, the Saturday after Thanksgiving has been recognized as Small Business Saturday, which has given local businesses the opportunity to promote their services to the surrounding community at the start of the holiday shopping season. The goal of the initiative is to raise awareness of local businesses and how important small and local run businesses are to our economy.
Many small businesses give back to their communities by supporting local sports teams and community nonprofit organizations. There are 861,373 small businesses in the state of New Jersey, which make up 99.6% of all Garden State businesses and employ more than 1.8 million workers. Across the United States, small businesses employ 47.5% of the nation’s workforce.
The road is tough for startups, around 20% close in their first year and 50% close within five years. If we want small businesses to grow and succeed, it will take a collaborative effort.
As a legislator and a small business owner, I’ve experienced firsthand the challenges of running a small business. The cost of basic services can be enough to put a business in financial trouble. When you include New Jersey’s high property taxes that do not cover routine services, like trash collection, the cost of operating a business can quickly become overwhelming.
On top of these expected taxes and fees, around 50% of municipalities in New Jersey charge businesses with annual mercantile license fees.
The topic of conversation in Trenton of late is about who we give tax incentives to and the past practices of administering and overseeing tax incentive programs. Through my experience, I fear that not having any tax incentive programs would make New Jersey noncompetitive with surrounding states.
However, when we examine previous incentive programs, such as Grow New Jersey and ERG, it’s clear that these programs didn’t benefit struggling small businesses. The new tax incentive question should be: “How do we help small business be successful in New Jersey?”
The other issue that many small businesses face is the many licensing processes they must go through to operate. Many local businesses have to send numerous payments for different applications that New Jersey requires for them to operate. I understand the need for regulation; however, we should consolidate the processes, making it easier and more streamlined for new business.
In 2010, New Jersey created the Business Action Center. NJBAC is a business-first resource center that is focused on helping small and starting businesses navigate government requirements. It provides support services, counseling and can help redirect entrepreneurs to other resources throughout the state. Additionally, there are also 12 small business development centers throughout New Jersey. Each is dedicated to supporting the development and retention of New Jersey’s small businesses.
In the new 2020-2021 legislative session, it’s my goal to bring new prospective and a heavier emphasis to the discussion on how New Jersey can be a better state for small businesses. I plan on organizing a Small Business Caucus comprised of bipartisan members of the Legislature.
The goal of this caucus would be to talk with small business owners and create legislation that would incentivize entrepreneurship and small businesses.
There is support for starting a small business in New Jersey, but the reality is we need to be better in offering support to sustain and continue developing local businesses. “Shop Small, Buy Local” are just words if we don’t give small businesses every opportunity to succeed.
Assemblyman Vince Mazzeo, of Northfield, is a Democrat representing the state’s 2nd Legislative District.