Help is on the way for small business.

That’s great to hear. No sector of America’s economy could use a leg up more than the one that creates most of the nation’s jobs, spins off a major share of the Gross Domestic Product and offers hope for future generations of entrepreneurs.

But those promises of help are coming from inside Washington, D.C., a city not widely known for extending the hand of friendship to those who own and operate businesses.  Actually, there’s quite a grand misconception in our nation’s capital about what, exactly, makes a small business.

Because of this, some of the most notable so-called small-business initiatives, particularly those emerging from the White House, won’t raise an eyebrow of the average small-business owner.

There are plenty of definitions of a small business.  For instance, the U.S. Small Business Administration says it is an enterprise that must be independently owned and have fewer than 500 employees.

Our standards at the National Federation of Independent Business are somewhat different.  To hold membership in the organization, a business must simply be independently owned, though the vast majority of our members employ fewer than 20 people. 

President Obama’s small-business initiatives, however, seem to define them as high-technology startups holding their hands out for millions of dollars of outside investment. For example, a recent proposal the president floated would eliminate the capital gains tax for certain small companies, but only those organized as C-corporations that issue stock.

That definition disqualifies about three-fourths of all small firms. Of the remaining eligible businesses, only a handful issue stock in a way that will allow investors to take advantage of this benefit-- high-tech companies looking for investors to take a stake in a risky new idea or technology.

We don’t begrudge the president’s intent but his proposal will help only a small slice of certain entrepreneurs and small-business owners.   Worse, it further complicates the tax code and plays favorites.

Listening to some of President Obama’s speeches lately, you might also get the idea that all small-business owners aspire to grow into huge corporations. Not so, most people start small-businesses for more humble reasons: to be their own boss, to work in their own community, or to do what they love.

We know the president is eager to put the economy back on its feet and we appreciate the fact that he believes small businesses can make that happen.  We hope he’ll take careful note that it’s the bedrock small businesses of America who can deliver that boosting impact--the ones the Small Business Administration credits with creating two-thirds of net-new U.S. jobs and employing half of all private-sector workers—not those that roll the dice with taxpayers money.

President Obama has started down the right path by highlighting small businesses as saviors of the economy, but he would gain greater insight into their true needs just by listening carefully to them.

What they want—and need—is a government that will dabble as little as possible in their dealings.  One that will simplify the tax code, eliminate burdensome regulations, and provide certainty and fairness in policies that affect them.  That kind of help would go a long way toward helping small-businesses grow and thrive.

Help is desperately needed along Main Street America and it’s encouraging to learn that the president and his administration are looking for ways to provide it. They’ll find the doors of small business always open and will be heartily greeted by owners eager to share their ideas about how government can once again be a partner in America’s prosperity.

It’s a simple formula: helping small business helps America.

About the author:
Dan Danner is president and CEO of the National Federation of Independent Business in Washington, D.C.