The SBA serves every single business under 500 employees, which constitutes 97.7% of all businesses in America. This is a constituency so expansive as to hae simply no meaning. Even 20 employees is still over 90% of all businesses, but at least there is some level of definition to '20 employees'.
To call 97.7% of all businesses 'small' is no different than calling all people under seven feet tall 'short'. The SBA is not the SBA, it is the MSBA - the Mid-sized Business Administration. All the SBA has done for the last 50 years is make it easier for mid-sized businesses to become mega businesses, at the expense of true small businesses.
The first loan program in the history of the SBA actually designed for businesses with under 20 employees, the ARC program, was a complete disaster. Ten months after inceptio, the paltry $255 million doled out for use by these 99.7% of all businesses is still not loaned, and the only businesses qualifying for this loan are very healthy businesses that don't need it. Imagine if we have given money only to the healthy banks and to Ford - that's exactly how we're treating small businesses. While GM runs off with tens of billions, the 27 million small businesses can't pry $255 million out of the government as even a token of support.
The only reason these conditions exist is because politicians don't believe small business has an organized voice. It is time to change that. The existing small business advocacies groups all serve narrow agendas and have been completely ineffective in this role, largely because the government keeps buying them off.
Please join me in putting together a unified voice of small business to advocate with government for a seat at the table. It is time that politicians stop using us as a photo op while raising money for themselves.
The bigger issue is: What will do with the money?
Honest. If a bunch of money plunked into our laps today, what would we do with it? THAT is where our focus needs to be.
Buy equipment? We need access to buying clubs where we can get equipment as cheap as the big guys.
Hire people? We need access to strong contractors we can use, perhaps via a database.
Get an office? We need incubators geared to our size of business, our types of industries?
Put our business online? We need access to low cost, good quality webmasters.
Pay off debts? mmmmm. That's the tough one. Sadly, this is probably where most people are, and it is the hardest to fund in any size business.
SBA loans are definitely geared to mid size businesses. The paperwork is astounding for a small business. We can either fight the system, or we can figure out what we really need, and go for that. Ultimately, I think it would be to our benefit to define what it is that we really want.
I would appreciate others' comments on what it is that they really need, and what they would do with a loan if they had it.
MaryAnnBusiness Plan MasterStart and Finance Your Business Now
---This post was edited to remove a commercial link. Read our discussion policies for more Community best practices.
Kikusha and BizPlanMaster,
I couldn't agree more that a new Small Business Administration will not solve the problems and that we need a private Small Business Association w/ dues to create a force in Washington that requires politicians to listen for a change.
I'm raising my hand to to start such an Association (there are a lot of small biz associations out there, but all of them have very narrow agendas that over ride their responsibility to get small business the voice at the table it needs).
I also believe that we do unfortunately need a new government Small Business Administration only because it is not reasonable to think we can simply dissolve the one that exists. While it would be the right solution, it's not going to happen and this existing Mid-Sized Business Administration will continue to create advantages for mid-sized to larger businesses that directly and negatively impact true small businesses. When the SBA helps a 20-500 person business where do you think their customers come from? They come from the 1-20 employee business that isn't getting the same handouts and help from the SBA.
So we'll need both - a private Small Business Association and after we form it, one of the things we need to push for is renaming this the MSBA - Mid-sized Business Association to reflect the existing reality, and then the creation of a true small business association to ensure that mid-sized and larger businessa re not getting handouts and favored loan treatment to the detriment of small business.
GBIntel,
As I mentioned before, I'm with you on the need to create a working group outside of the government to begin to multiply the influence of each of us. I believe this is a three year initiative.
Year one - 2010 - aggregate a list of business owners who are influencers in business who will join the effort. Incorporate and begin to fund the effort.
Year two - 2011 - significant public effort to 'market' the need for this to business owners via PR, media, word of mouth, internet, etc. to create a ground swell that will require politicians to pay attention. Aggressively identify politicians who are for and against such an initiative and create a plan for supporting and defeating them as needed.
Year three - 2012 - we should have enough momentum by then to begin to influence elections at both the local and national election. Work to get the creation of a new SBA in as a plank with one of the political parties (again, my preference would be to dissolve the one we have, but dissolving any institution in government just doesn't happen - the only defense is unfortunately the creation of one to counter-balance the negative effect the SBA has had on true small business.) Influence elections in other ways to the benefit of small business.
These are just preliminary ideas as this movement is in its infancy - all of this will evolve as we continue to clarify the issues and what people will actually rally around.
BusPlanMaster | Window Shopper | 1/7/2010 - 8:15 pm
chuckblakeman | Window Shopper | 1/10/2010 - 12:02 pm
chuckblakeman | Window Shopper | 1/16/2010 - 7:27 pm
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