New York small businesses are being left behind. Let’s help them unlock financial freedom

One could say that New York is one of the top locations for those looking to start a small business — small businesses now account for 99.8% of all businesses in the state, employ 47.1% of the state’s workers, and export $69.2 billion worth of goods. It is no surprise that in 2023, New York saw an 8% uptick in new business applications.  

Yet, despite their significant role to the state’s economy, many small business owners feel financially neglected, lacking the necessary support from New York’s financial and government institutions. Over 21% of businesses in New York  fail within the first year. And this figure only spikes from there, with 52.8% of businesses failing within the first five years.  

The sentiment among many New York small business owners is that they are alone, but that must change. July 1 marks National Financial Freedom Day, a day dedicated to raising awareness about how to achieve financial freedom. This Financial Freedom Day, it is critical that the private sector and public sector acknowledge the progress that needs to be made to better support small businesses and come together to help more small businesses succeed.  

For starters, small business owners feel underserved by private financial institutions. A 2022 survey revealed that only 30% of owners felt satisfied with the support they received from their banks, a statistic that barely increased in 2023, with only 35% feeling satisfied with banking institutions.  

Beyond the support from financial institutions themselves, small business owners also feel that they fall short in providing and promoting financial tools tailored to them. Small businesses need fast, flexible, and digital-first solutions, and they often struggle to find them.  

Why do small business owners need this support? Only 54% of small business owners claim to have a good understanding of financial management before starting a business, and about 28% do not feel confident in their financial literacy. Many small business owners are on their own to learn how to locate resources, and price their products and services effectively.

But it does not have to be this way. Establishing a robust support ecosystem that enhances financial literacy among small business owners in New York can make a significant difference.  

The potential for small business ownership to build wealth and drive upward mobility is well-documented. With the right education and resources, small businesses can achieve financial independence and continue to contribute to New York’s robust economy. All they need is the right tools and education to do so.  

Often, small businesses face financial difficulties because they lack a comprehensive understanding of how to manage their businesses’ financial health. But it is unrealistic to expect small business owners to be financial experts from the start. New York's private and public sector must step in to provide guidance and resources.  

For example, there should be more free and low-cost educational programs to help business owners learn to manage and categorize expenses, track cash flow, and make appropriate tax deductions. While there is programming that already exists — through government-funded organizations such as the New York Small Business Development Center and private companies like my own — we must make sure these services are appropriately marketed to small business owners.  

By bridging the knowledge gap and providing more accessible financial literacy tools, we can level the playing field between established and emerging businesses in New York. This will not only foster healthy competition but also reinforce New York's reputation as a land of opportunity. It is imperative that both the private and public sector collaborate to support the success of New York’s small businesses. When New York’s small businesses succeed, New York succeeds.  

Lilac Bar David is the co-founder and CEO of Lili.