Well, we have another post in us on The State of Entrepreneurship, and it once again results from the dialectic between a pessimistic Scott Shane and a less-pessimistic John Tozzi.

Shane writes: "Most Americans would like to believe that this country is getting more entrepreneurial over time. While I wish this were true, the data don’t agree. Policy makers need to take a look at these data and acknowledge the pattern." And Shane has the charts to prove it. We don't want to rip them off; but go to his post and see for yourself. Disheartening stuff.

What's to blame? Shane fingers Wal-Mart and the like: "Large, efficient companies are able to out-compete small start-ups, replacing the independent businesses in many markets. Multiply across the entire economy the effect of a Wal-Mart replacing the independent restaurant, grocery store, clothing store, florist, etc., in a town, and you can see how we end up with a downward trend in entrepreneurship over time." Indeed, Shane has literally written the book on this phenomenon. It's a compelling explanation.

But Tozzi takes a different view.

Without denying the Wal-Mart effect, Tozzi points to the "emergence of niche markets where many small players compete, without the dominance of a Wal-Mart-like giant, or even mass markets where niche players are gaining a foothold." This is straight out of Chris Anderson's famed book The Long Tail, in which Anderson--the editor of Wired--predicts an infinitely fractured marketplace increasingly shifting away from a select few blockbuster goods and towards many, many, many more smaller-selling niche goods.

How does Tozzi rebut Shane's convincing graphs? He notes that they all start twenty years ago, and, arguing that "there could be an inflection point around the beginning of this decade," he predicts that the data we get in the coming years could show that things turned around for entrepreneurship in America thanks to the long tail/increased prevalence of niche markets. Again, compelling.

We took Tozzi's side last time; this time, we're a little more bearish. Tozzi's point certainly carries during boom times, especially the middle of this past decade: increased consumer spending really did prove a boon both the Wal-Marts and the tiny businesses of the world, which benefited from increased profitability of niche markets. The rising tide truly did lift both the big and little boats. However, the past two years (and especially the past year) have not been so kind to consumer spending, and while that ultimately hurts everyone, it's going to hurt the little guys, operating in their little niche-markets, far, far more than it is going to hurt the Wal-Marts (indeed, Wal-Mart is still managing to turn profits).

So on the one hand, we think that Shane's numbers might be a little misleading (although we don't doubt their integrity), and that his "Wal-Mart effect" explanation might be a little oversimplified (though we don't doubt its ultimate validity). However, recessions have the effect of simplification, and we'd suspect that entrepreneurship indeed is taking a disproportionate hit as of late.

In essence, the article recommends that you do your own homework--and a lot of it. It recommends Georgetown University's healthinsuranceinfo.net, the National Health Law Program's healthcarecoach.com, and the Kaiser Family Foundation's site. And even with all of those resources, it still may also be worth consulting an independent agent, or several (make sure they have a license!), particularly if it's your first time buying on your own.

Beyond that, caveat emptor! Buy insurance, not just a discount card. Look beyond premiums: make sure you have a catastrophe insurance, that your out-of-pocket costs are capped, that your percentage of doctors' visits is reasonable.

And don't forget to see if you're eligible for federal unemployment-related health benefits! Our very own Jerry Kalish expounded on how the federal stimulus law expanded that coverage--check it out.

Now, though, Jonathan Weber, the small-business columnist at our sister site The Big Money, has made what might be termed the small-business case for the public option. It's not, in other words, based on the more ideological pros and cons, but on the much simpler proposition that ordinary small businesses should not have also to be in the health-insurance business.

"There is little economic logic in forcing companies to provide health insurance," Weber argues. "It distracts them from their principal mission, it gives large companies a big advantage over small companies (big companies can leverage economies of scale to reduce their per-employee costs), and it introduces friction in the job market by creating an external incentive not to change jobs." (Indeed, we've written about the numerous ways in which the current system disadvantages small businesses here.)

Weber also notes that many small-business groups--in particular, the powerful National Federation of Independent Business--appear to be opposed to a public option for ideological reasons rather than small business-specific ones. We've taken the NFIB to task for prizing conservative ideology over common sense in the card check, fair-pay, and estate tax debates already; if we were you, we'd expect to see a post on health care shortly.

Meanwhile, the big news on the health-care front today is that none other than Wal-mart has come out in favor of a broad-based employer mandate--a general requirement (potentially exempting small businesses) that employers provide health benefits to their workers. Wal-mart's being canny, to be sure--this move makes it look reasonable, and may also make a public plan less likely--but it's worth noting that its letter is co-signed by the heads of the Service Employees International Union and of the liberal Center for American Progress--so if it's being canny, it's also being serious. We're not sure exactly what the implications of this move are for small businesses. Suffice to say, though, that the burden that would fall on Wal-mart's being required to insure all of its employees is far less onerous than the one that would fall on the average, truly small business.

And who, you might ask, is Ms. Love? Well. Love, SPHR, is the President and co-founder of Purpose Linked Consulting, a leadership and organizational development consulting firm located in the US and Thailand.

And what is The Purpose-Linked Organization?

The book examines the rising tension in the relationship between employees and corporations. It posits that workers today have a burning desire to identify their purpose and passions, and find an outlet for them in the work environment; at the same time, their employers are feverishly searching for new ways to achieve outstanding results through their people. What far too few organizational leaders realize is that purpose combined with passion need not lead to discord--it could, according to Love, be the new competitive edge.

Based on the authors' proprietary research and in-depth interviews with a diverse group of high-powered executives, The Purpose-Linked Organization offers easily implementable ways to channel the power of each individual’s passions in a positive, purposeful direction. It teaches you how to link skills, values, and passions to performance—and how doing so will bring results. Just as importantly, it enables you to confidently assess your own purpose and passions so that your own organizational role will be as engaging, fulfilling, and productive as possible.

Love's resume is quite impressive, so we're really excited about this. She has consulted to large, multinational Fortune 500 firms as well as small, independent companies and hospitals for over 25 years. Before embarking on her current career as a human-resources expert, Alaina was a research scientist for Merck in the field of immunology (!), where she worked to develop products for the treatment of diseases such as Rheumatoid Arthritis and Lupus.

So send your questions in! And get ready for the discussion on July 14th.

It may be a tax guideline, she says, but it’s a business and legal myth. She goes on to explain why and offers the following advice: "work with your attorney to design a record retention plan. Be sure the plan covers paper records and electronic data. Once you have a record retention (and destruction) plan, integrate that plan into your business processes."

But there’s an additional retirement plan component to all of this, particularly as the July 31 deadline for filing a Form 5500 for most retirement plans approaches. The myth here is that retirement plan records only have to be retained for a period of at least six years after the date of the filing of an ERISA-related return or report, and that the materials should be preserved in a manner and format (electronic or otherwise) that permits ready retrieval. All records that support the plan’s annual reporting and disclosure should be retained, this myth goes.

Now here’s the practical side of it. While it is fairly common for a plan sponsor to contract with outside service providers, such as our firm, who provide certain reports and prepare the 5500 filing, the Plan Administrator remains ultimately responsible for retaining adequate records that support these reports and filings. In addition, the Department of Labor requires employers to maintain records sufficient to determine the amount of benefits accrued by each employee participant.

Instead of relying on the “6-Year Rule", best practices would be to maintain certain records for the life of the plan. The thicker the paper trail, the easier it will be for the plan to respond to an inquiry from a governmental agency or a request for information from a plan participant.

Both the Internal Revenue Service and the Labor Department, the federal agencies that have oversight of retirement plan tax aspects and reporting requirements respectively, can and have requested information for periods “back in the day”.

It’s far easier to have the records in the first place than to have to recreate them for the IRS or DOL.

Jerry Kalish is founder and President of National Benefit Services, Inc., a Chicago-based employee benefit consulting and administrative firm that serves private-held companies, publicly traded companies, and public sector employers. He blogs at The Retirement Plan Blog and can be reached at jerry@nationalbenefit.com.

But is this historically low outlook really the best indicator of the prospects for entrepreneurial growth? Not necessarily, John Tozzi of The New Entrepreneur might say; and were he to say it, we would agree with him. Tozzi highlights an intriguing statistic produced by none other than the U.S. Census Bureau: that between 2006 and 2007, the U.S. added over one million additional non-employee (which is to say, single-person) businesses. These businesses actually comprise a not-insignificant space in the economic landscape: by 2007, there were 21.7 million of them--19.1 million sole proprietorships, 1.4 million corporations, and 1.2 million partnerships. As you'd expect, the vast majority of these businesses are unincorporated individuals. Their total 2007 revenue totaled nearly a trillion dollars, which, Tozzi notes, is equal to nearly 7% of GDP.

Of course, these are relatively old numbers. But Tozzi makes a compelling point: "I think the long-term trend here is clear: More people working for themselves instead of (or in addition to) being employees. My gut sense is the recession is creating even more entrepreneurs as laid off workers go into business for themselves." We heartily agree. When the job market is bad, one logical step is to remove yourself from it, and pretty the much only way to do that (while still trying to secure an income, obviously) is to start your own business. Just one more component to the Great Rearranging. We'd bet anything that, two years from now, when the Census Bureau releases its 2009 non-employer business data, it will reveal even bigger jumps.

The key issue is this: any mandate program, which would involve government subsidies to the less-well-off, would all but demand the levying of penalties on employers who don't offer health insurance to their employees. In fact, it is precisely those penalties that would help avoid the erosion of employer-sponsored insurance--itself a crucial political goal, since it was the widely perceived threatening of such insurance that is believed to have derailed the previous major push for health-care reform, in 1993.

But penalties would fall on those businesses that don't provide insurance. And, given the basic statistics, and the way in which the current health-care system fundamentally disadvantages small businesses, that means that the penalties would fall disproportionately on small businesses. Which is obviously unfair.

So what's the solution? Well, the immediate, obvious answer would be to exempt small businesses from any requirement. No less than President Obama said he would be open to such an exemption, as we noted a couple weeks ago (and as today's article reiterates). House Democrats have said their bill will exempt some small businesses. Sen. Max Baucus (D-Mont.), who from his perch as Finance Committee Chair may be the single most important legislator when it comes to health-care reform, suggested tax credits rather than outright exemption, saying of the latter option, "We talked about it. But how much sense does that really make?”

We hate to say it, but he does have a point. Treating small businesses the same as big businesses in terms of requiring insurance is clearly unfair. But simply exempting them may add unacceptable strain to what would be the government's already-daunting obligations to the otherwise-uninsured, whether they take the form of subsidies or some sort of public-plan option. It might even have the perverse effect of decreasing the number of small businesses that offer insurance, which could in turn give bigger employers that much larger of an advantage in attracting top talent.

It seems like a circle to be squared. And a circle that needs to be squared, if we want to save small businesses billions and billions of dollars.