President Joe Biden signed an executive order which promises to upend how the federal government has traditionally supported U.S. producers and manufacturers. The “Executive Order on Ensuring the Future Is Made in All of America by All of America’s Workers” has been touted as a “Made in America” executive order. President Biden gave a speech in which he introduced his ideas to the American public. In that speech, he indicated that he felt small businesses had not gotten a fair shake from the federal government. Despite accounting for 44% of the United States’ gross domestic product (GDP), and employing almost half of the American workforce, they have not gotten the support that they need. President Biden affirmed his commitment toward helping small businesses grow, and, as a consequence of that, helping communities and the broader economy, grow as well. The pandemic has been especially hard to small businesses. The president’s executive order offers hope and a strategic framework for action. In this article, we will discuss how you can take advantage of President Biden’s small business plan.
- More market intelligence
The president’s executive order mandates the creation of a website which small businesses can use to gather market intelligence. The website would allow small businesses to get answers to such questions as, “Which businesses applied for waivers?”, “What products were those waivers for?”, or “What were the reasons for that waiver being denied?”, among other questions. The president has already appointed a trade expert, Celeste Drake, as head of the office responsible for executing the order. The website is one way in which the president has tried to create a transparent environment and provide useful market intelligence, to help small businesses succeed.
- Access Massive Market Opportunities
Each year, the federal government procures goods and services for about $600 billion. The federal government is actively seeking out small businesses from whom it can procure these goods and services. Federal agencies have been charged with creating a more open process for small businesses so they can get a bigger slice of that $600 billion pie. The executive order promises less bureaucracy (which will reduce costs), and the establishment of a “Made in America” to execute the executive order.
As per the executive order, federal agencies and contractors will have to spend more of their capital on American-manufactured products. Furthermore, federal agencies are obliged to create a database of the small-to-medium American businesses that produce the products that that each federal agency buys each year.
- Small Businesses Can Charge More
One of the reasons that American manufacturing has over the past decades shifted East, is because lower costs there allow manufacturers to reduce their prices while at the same time increasing gross margins and overall profitability. The result is that foreign manufactured products are generally cheaper than American-made products. Realizing the competitive pressures that American manufacturers face, the executive order permits federal agencies to pay more for a product if it is produced by an AMerican manufacturer, if doing so will boost the domestic manufacturing industry. This levels the playing field with foreign manufacturers.
- More Flexible Ways to Sell American Products
Over half of the cost of producing a product must be spent in the United States in order for that product to qualify as American made. The executive order seeks to close any loopholes that businesses can use to go below this threshold and still have their products quality as American made. So regardless of whether your business is a startup, or you are in the planning stages, or the business is more mature, you have the assurance of the federal government that a big window of opportunity is open if you choose to produce your products in the United States. You can seek certification of your products in order to gain entry into this window of opportunity and build trust with the many customers who want to buy American.
- The President Has Used His Platform to Bring About Change
The presidency is an effective platform for change. Not only does the president have immense power to achieve change through executive orders or by working with Congress to pass laws, his position makes his thoughts and ideas influential. The president has used this to push through his Made in America agenda and people have listed. Even before this executive order, federal and state government officials had already started to invest considerable political capital into supporting a more pro-Made in America agenda.
Small businesses are an important piece of the American supply chain. The global supply chain has been disrupted to a staggering degree by the Covid-19 pandemic. This has led to a rise in the inflation rate and concerns that inflation and product shortages may be here with us for some time. This has exposed the risks of being too-dependent on overseas supply. This has led to many companies reshoring, that is, bringing their supply chains back home. President Biden has outlined measures to address the supply chain crisis. Small businesses are an important part of the effort to rebuild supply chains.
The wonderful thing is that the United States has a number of America-made products that the world has a huge appetite for. The world has a big demand for blockchain, American apparel, out tech startup space, retail, manufacturing, and other aspects of the American economy. American products sell. The country has shown a great degree of innovation and is still a leader in technology, pharmaceuticals and other sectors. Small and medium-sized businesses have been engines of innovation and growth. Let;s not forget that companies like Apple, and Microsoft have themselves been small businesses at some point, small businesses which benefited from federal government aid.
Now is the time to enter the fray and contribute to the effort to rebuild the AMerican economy and restore American supply chains. As we have said on this website, it is important to organize your businesses in the most tax efficient way and in a manner which limits your liability. Using that structure, you can build a business that can contribute to the effort to revive American manufacturing and make it a world leader once again.