What do startups and entrepreneurs really want from this new government of Ghana? Lots of money? Big contracts? Affiliations and connections?
What do they urgently need from government?
Every Startup, just like other successful Entrepreneurs, will generally be happy to accept anything that would jump growth their businesses to the next phase; whether money, contracts, connections or any form of good support.
Startups in Ghana needs a government and leaders who will lean into the future of growth, expansion and sustainability with them. A government that incites startup businesses and innovations just as the president, Akuffo Addo promised in his inaugural speech.
Startups needs a government that will take interest and see their potentials to achieving success that certainly will enhance an over all economic growth.
They need a government that will take the startup ecosystem seriously and rise up to the 21st century economy. Like I would say, ‘startup is the new growth of our economy’.
A week ago, government appointed a minister designate for business development. First ever in the history of any successive governments. But what is the role of the minister designate for business development?
What role can the newly created ministry play in the startup and small business economy?
Having spoken with quite a number of startup business owners and networks in the country about their expressions with the new government and the newly created ministry, most expressed disappointments and a bit of uncertainties.
Let me hit straight on the point. For a government that has promised a massive support for new business creation, startups and small businesses, I was hoping for a ministry solely set up for startup and small businesses; a ministry for small business and startup development per say. That would have served much more than a business development ministry looking at the high growing increase in startup entrepreneurship. Someone may say, is business development not the same as startup business? If you work in the corporate industry where there is the business development department, you would understand the role they play in a company. Quite a huge difference.
Would this ministry serve the needs of government owned businesses or both the needs of private owned and public businesses?
We will take an interest in this ministry when its finalized and its role well defined by government. For now, we are a little anxious to know about what the ministry would be doing for the startups.
But here is the startup focus; the initiative to create a startup ecosystem and to establish innovation-based startups to increase employment opportunities and economic growth. – this is the startup dream.
Below are some top expectations of startups from the new government
a. Entrant tax exemptions
The frustration of most startups is losing all their insignificant incomes to government through tax. How do startup businesses pay tax when actual business has not commenced? The payment of tax based on projections is certainly not appropriate and do not encourage development of startup businesses.
Three years tax exemptions for startup businesses would be a great kick start for young people in this country to start new businesses as the government encouraged for new business creations..
One will say taxes will not make much of a difference, because companies usually pass this expenses on to customers, and entrepreneurs will end up making the same money back for themselves one way or another.
But how do startups pay tax when they have not actually commenced business? From what income would they be taxed? Startup financing as it is, is a ‘crazy’ hurdle. Now, startups need to put aside quite some money for their first tax from the date of their incorporation by the Registrar General. These makes startups avoid their tax responsibilities and waking up to huge tax credits when they have actually began making ‘peanut’ incomes.
These costs should be zeroed out, and allow incorporations to be liberalized for entrepreneurs to start new businesses, shut down a startup when bankrupt and without huge tax debts. Startup taxes from the day of incorporation has to be thoroughly looked at by the Minister designate and the government. Government taking monies from startups for starting businesses through the form of tax is called ‘stealing’. These startups are creating jobs, they are aiding government to develop the economy and deserve a three year tax exemptions than this punishment for taking the initiative of starting businesses.
Tax incentives would definitely save most startup businesses from bankruptcy.
b. Flexible private sector for startups
The private sector is an inclusion of startup businesses, whether significantly or not. Major private sector developments are geared towards the ‘corporate’ industries.
How do government make a balance to give startup businesses enough room to grow and also establish?
Government must create a flexible private sector where both the big entities and the startups can operate in their own capacities.
c. Access to seed funding
Access to funds is crucial. Startups need to move from being startup businesses to corporate businesses. How do they Pursue that phase? Government need to provide EQUAL access to seed funding. When I say equal, I mean an available funds to all startup businesses with the appropriate monitoring and regular evaluations of funds provided. We need to encourage riskier investment ventures in startups. Government backed investments and programs for startups to enable them easily access funding and investors.
The government should not be in the way of deciding which startups deserves investment capital or seed funding. This will provide an equal opportunity for all startup businesses and devoid of ‘the big’ companies from getting these investments in the form of projects because they’re ‘in government’ affiliated companies, or are indirect politicians owned businesses. Seeds should be made publicly available directly from government for bidding just as much as government contracts are made publicly available for the other bigger industries.
d. Startup Business regulations and policies
Governments enact policies to govern businesses. But during these enactment of polices and regulations, are startups and small businesses considered? Are they taken into maximum considerations as much as they generally would with the ‘corporate’ businesses? This has never been the case. If it were, startups in Ghana would have dominated the startup world market by now. How many startup businesses from Ghana can boast of making impacts on the international business scenes? I’m yet to see any specific startup business policies and regulations that has been enacted to support small businesses and startups.
Government regulations and policies represses entrepreneurial creativity and innovation, especially for startups. They are the most vulnerable business to say.
e. Government accessibility
There is a difference between government for the people and government available to the people. The struggles to access a government official or a minister in this country, can be described as ‘a pain in the neck’; you would wish to take a quick turn and fix the pain but that would be sorcery.
Government needs to be easily accessible to the people without any exceptions to the startup community. Startups in Ghana, startup networks, startup groups, should be able to access government without any difficulties to express their opinions, put across their needs and be able to present their inputs for government budgets etc.
The participation of the startup business communities and regular indulgence of the minister designate for business development and government would go a long way to achieve governments objectives for the new ministry and the desired economic growth it’s anticipating.