At one time I had a small consulting business doing IT work for mostly other small businesses and building custom computers for individuals. I was however taxed out of existence. Local, state and Federal taxes ate up so much of my time and I could not be competitive with more established consulting firms and still comply with Federal and State payroll laws/taxes. I had more business than I could do by myself and could have easily afforded to hire full time employees but at the same time not enough capital to hire those people long enough to get over the hump. To add to my misery I was not a very good book keeper which left me terrified of tax audits. I really needed at least a part time book keeper but could not afford one and still be competitive unless I added staff and I couldn't add staff unless I had the capital to create the infrastructure to comply with Federal laws and red tape.
I have several ideas I'd love to pursue for small businesses. All quite practical but I lack the starting capital to get into them and the credit/collateral to actually pursue them. The one thing I learned was if your going to make it you have to have fluid capital to get past that artificial barrier that keeps mom and pop shops from hiring larger staffs. You have to have reserve capital to cover unexpected problems and contingencies. You also have to have a good lawyer and book keeper.
As for some of the small businesses I see opportunities in.
Servicing grocery stores. Right now there are a couple industry giants and small companies however none in my region are very good at customer service, some are downright unfriendly but the lack of competition leaves grocery stores and other retail outlets at their mercy.
Green energy ideas I have.
Fast food equipment. I'd love to reinvent how fast food chains operate.
A tactical range/paintball field/band rehearsal area. Might seem like an odd combination but I want to make the fullest use of the 3 very space consuming activities which tend to have very little overlap but require very similar resources which in my area are all 3 badly under served as well as potentially quite lucrative.
Linux software company specializing in converting small and medium sized business to Open source software. Strong need for it, low overhead, high potential profits.
Recycling machinery manufacture. Recycling is still a very primitive technology. The opportunities to improve processes are limitless and literally a massive fortune could be made in a short time in this area.
I have several other ideas. All of them theoretically practical and most of them decently researched. All of them requiring various amounts of capital and areas I have expertise in.
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Forgot to answer main question lol.
As to how to get more small biz going, you need capital first and foremost. That means bringing back jobs to the US. Do you think Apple would have started if Jobs and partner had no garage to build the first one in? No house to take a 2nd mortgage on? No high paying job to pay the bills while they built their ideas. Same with Dell and the many other recent innovative companies that have since become industry giants.
The other thing is to break the barriers down between small and big biz. Give the small guy a chance to compete.