The small business community should be pleased that they were a major focus of the President's first State of the Union address last night.  President Obama was on solid footing to reference entrepreneurship as a positive example in an otherwise gloomy economy and as a job-creating force that can pull us out of the recession.

Did you know that half of today's Fortune 500 companies were founded in a recession or bear market?  Carl Schramm, CEO of the Ewing Marion Kauffman Foundation, highlighted that fact to illustrate how, even in the toughest of times, entrepreneurs find a way to succeed.

The job-creating prowess of small firms is more well-known.  Data show that since the 1970's small businesses hire two out of every three jobs.  Carl Schramm points out that in the last 30 years, literally all net job creation in the United States took place in firms less than five years old  And, data from the 1990's show small business was the only sector producing jobs coming out of a recession.

Glimmers of hope and a way out of the recession?  Yes, small business is not just a pretty face. 

The challenge that lays ahead for Congress and the President is turning a good speech into action that works to unleash the power of the small business sector.  Too often, a good idea in Washington gets bogged down in bureaucracy that neuters its effectiveness.  Last night's speech was no exception.  The idea of getting money to Community Banks so small businesses on Main Street can use the loans for startup expenses and expansion is good.  However, using TARP money that scares banks away or requiring excessive government-mandated paperwork that tells small business owners the loan is not worth the hassle is bad.  The idea of tax credits for small business is good.  Tying those tax credits to detailed record-keeping and complex qualification criteria is bad.

Government paperwork, regulatory and permitting requirements, and other costs of compliance hit small business the hardest.  Yet, those entrepreneurs are the ones government needs to turn our economy around.  I am hopeful that small business owners focus on the good ideas coming from President Obama's speech.  And, I hope that Washington focuses on keeping those ideas free from government red-tape to provide needed relief for small business and needed improvement for our economy.

Tom Sullivan served as the Chief Counsel for Advocacy at the U.S. Small Business Administration from 2002-2008.