The SBA is supposed to serve all businesses with under 500 employees. This constitutes 99.7% of all businesses. Only 17,000 businesses in the entire US fall outside of the SBA, with 28 million falling inside. A constituency from 1 to 500 employees is so broad as to be meaningless, and no agency could successfully serve such a ridiculously broad group. To call 99.7% of all businesses small is no different than saying everyone under 7' tall is 'short'.
Everything in the SBAs history points to the obvious - they exist to serve businesses over 100 employees, with an occasional nod to businesses w/ over 50 employees, and virtually no help for true small businesses under 20 employees. The loan programs and the entire structure of the organization is focused on these mid to large size businesses masquerading as small.
A classic example - Obama's most recent 'solution' to the lending crisis to true small businesses under 20 employees was to raise the lending limits on 7(a) loans from $2 million to $5million. Please tell me how raising the limits on loans a true small business will never qualify for could possibly offer any relief whatsover. Who does this help? Businesses with 50 to 500 employees will beneift greatly. True small businesses will be left in the lurch once again.
SCORE is supposed to be an aide to true small businesses. The overwhelming number of SCORE counselors are retirees from middle management in big businesses who never started a business in their life. They use their big business experience to advise people on things they themselves have never done (crunching the numbers for a 2 person business is an entirely different thing than for a 75 person business - until you've started and bootstrapped a business, you shouldn't be telling others how to do it.)
It's time for change you can believe in. The SBA is not only ineffective, but as a strong supporter of businesses from 50-500, the SBA has for 50 years made it easier for those businesses to succeed at pulling market share away from true small businesses. The SBA is responsible for an ongoing deleterious effect on true small business.
It is time to call for the creation of a true small business administration and a recognition that the existing one should be renamed and repositioned as the MSBA - Mid-sized Business Administration.
Over the next three years, beginning immediately, we are recruiting support for the formation of this new administration that separates the 90% of all businesses in America with under 20 employees out and away from the mid to large sized businesses that have been the real focus of the SBA for over 50 years.
Please join us in the conversation. What should this new agency provide for true small businesses? How should it interact with them. What would be the metrics for measuring its success?
We look forward to your involvement in bringing the true SBA to life and the repositioning of the existing one as the Mid-sized Business Administration.
I think that most all government organizations are not very helpful to small business. Having been a small business owner for many years, and worked with other small business owners trying to keep their companies afloat, I have found the SBA to be virtually useless. First of all, to my knowledge, SBA doesn't lend money, it simply guarantees the loans, and in most instances, it would only do so after it put a lien on my clients personal residences, even though their entities were corporations.
So while the formation of a smaller SBA branch for smaller companies sounds lovely, more of doing nothing to help business out, even on a smaller scales, is still doing nothing....
Intriguing idea. I'm glad you decided to take a few years to plot out this large of a change. Jumping into something like this without the right planning and speculation from others could've been disastrous.
I think a key focus needs to be the performance metrics that are set in place to verify that the new SBA is really meeting the needs of the small business community.
'So while the formation of a smaller SBA branch for smaller companies sounds lovely, more of doing nothing to help business out, even on a smaller scales, is still doing nothing....'
Couldn't agree more. The best scenario would be for the existing SBA to just be dissolved, but that's not going to happen. It will continue to support mid-sized businesses and help them become large businesses, and that growth comes at the expense of true small businesses from whom the mid-sized businesses are taking market share.
The existing SBA does a very significant service for these mid-sized businesses - favorable loan terms and a lot of other help. No question the SBA helps these companies take market share from true small businesses.
So if it's not going away as it should, the worst scenario is that true small businesses would continue to not have a voice at the table. The government is presently run by three entities - 1) politicians (not statesmen), 2) big business, and 3) unions. Small business must do everything it can to get a seat at the table, not so we can develop handouts for ourselves like the other three, but to stop the free-flow of those handouts at the expense of true small business.
Agreed on the need for metrics to ensure the new SBA would actually serve small businesses. I can tell you the most significant safety check for this would simply be to create an agency that has ONLY true small business as its clientele. The existing Mid-sized Business Administration is supposed to serve all companies from 1 employee to 500, an impossible task.
If we set up an SBA focused on 1-20 employees there is enough similarity here to actually develop some metrics for success, and it's still 90% of all businesses in America.
chuckblakeman wrote:
'...It will continue to support mid-sized businesses and help them become large businesses, and that growth comes at the expense of true small businesses from whom the mid-sized businesses are taking market share...
The problem is, isn't it our goal to become mid-size and eventually large companies? Business is business - mid-size and larger companies do end up taking market share from smaller companies, but it's because they're bigger and have the resources to do so. The small businesses that can withstand that kind of competition grow into healthy mid-size businesses. It's a natural progression (ideally), so I don't know if we should be so critical of mid to large size businesses, if our goal is to join them one day.
whiteinkstudios | Performer | 11/22/2009 - 1:48 pm
dhorning | Creator | 11/21/2009 - 1:07 pm
chuckblakeman | Window Shopper | 11/23/2009 - 10:02 pm
chuckblakeman | Window Shopper | 11/23/2009 - 10:06 pm
dhorning | Creator | 11/24/2009 - 11:53 am
jamestkirk | Creator | 11/25/2009 - 6:20 pm
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