An important next step for Florida entrepreneurship
As an entrepreneurship educator, I am able to contribute to a vibrant ecosystem enabling the next generation of entrepreneurs, including many of our undergraduate and graduate students. We are fortunate to live and work in Florida, ranked the No. 2 state for economic freedom by the Fraser Institute in its most recent report. States with high levels of economic freedom, like Florida, are characterized by fewer regulations on business, labor markets and credit markets.
This economic freedom provides the necessary conditions for businesses to flourish. Our business-friendly state enables our students, and other aspiring entrepreneurs of all ages and experiences, to pursue the “American dream” of starting a business.
As aspiring entrepreneurs in some cities in Florida still face some unnecessary regulations, Florida Republican state representatives Mike Giallombardo, Joe Harding and Spencer Roach recently introduced House Bill 403 to reduce red tape on home business. This bill will prevent cities from charging additional fees to aspiring Floridian entrepreneurs and business owners who wish to start home-based businesses.
In addition to the administrative burdens that directly hamper aspiring entrepreneurs, research indicates that aspiring entrepreneurs face the psychological toll of having to deal with red tape that stalls or even halts new venture launches. If the bill becomes law, it will also allow entrepreneurs and business owners to challenge certain local government actions around licensing and regulation, and to recover specified attorney costs.
One of the many upsides of the bill is that “garage entrepreneurship” can flourish across our state. Many of America’s most successful companies — such as Disney, Hewlett-Packard, Apple, Microsoft, Dell, Yankee Candle and Harley Davidson — started in garages. U.S. Small Business Administration research indicates that home-based businesses historically create about 64% of all new jobs.
Studies also show that home-based ventures are an important path to financial independence, especially for minorities and women, and enable entrepreneurs to balance other responsibilities such as caring for elderly parents or young children. Entrepreneurial talent is equally distributed across our population, from young people just starting out to older adults wishing to pursue entrepreneurial paths after corporate careers. Home-based businesses make entrepreneurship accessible to all, so they’re particularly vital for economically disadvantaged individuals who have no outside financial backing and do not have the ability to rent office space.
Some critics argue that home-based businesses get too large, but research indicates that home-based businesses that grow will then relocate to larger premises. There is a natural not-in-my-backyard thinking that leads critics to suggest that this bill would lead to home-based businesses such as auto repair or a funeral home; however, there is little to no data to support this contention. Such businesses are a microscopically small percentage of new ventures, and would be logistically almost impossible to successfully run from a home. Rather, U.S. Census data indicates the fastest growing home-based ventures, including during this pandemic, are online consulting and teaching, digital marketing, cybersecurity, graphic design and e-commerce ventures. Moreover, home-based entrepreneurs spend more time in their homes, and are therefore more likely to invest in home improvements, raising the value of their homes and their neighborhoods.
The bill before the Florida Legislature enables the next generation of aspiring Florida entrepreneurs to dream big and take the first important steps toward realizing their ambitions. I am excited by the prospect that our students and other aspiring entrepreneurs in Florida will have greater economic freedom to start new companies from their homes. Our state will grow stronger with this new wave of entrepreneurship enabled by representatives Giallombardo, Harding, and Roach.