The Audacity of Failure - Phil Colon, a small business advocate, comments on the Government's Inability to Support Small Business effectively
This is a byline that points out short comings in the current administration's approach to small businesses. The piece provides recommendations to government as to how to better communicate to Small Businesses effectively, deliver relevant tools, incentives and tax breaks in order to ensure that Small Businesses will continue to grow our economy in these challenging times.
New York, NY (PRWEB) April 1, 2009 -- Last week marked the first time President Obama spoke with clarity, confidence and conviction regarding the plight of small business owners and their need for their very own stimulus package to keep them growing and more importantly hiring. The fact that the President is now elevating the conversation around the importance of small business is a step in the right direction, but it is simply not enough. We must now move aggressively to make sure those words are backed with bold steps to encourage the entrepreneurial drive and innovation that can turn the economy around; we simply cannot be shy with these changes.
Phil Colon, founder Project 2050 Inc
During the Presidential Elections I was drawn to President Obama not by who he was, nor the great speeches he gave, but rather by his promise of "Change" and "Hope". These are qualities inherent to business owners whose own existence is based on innovation. However, lately I have been feeling a bit "short changed" as small businesses, one of the most powerful engines in the American economy, has been a side conversation while billions of dollars have been handed out to failing companies and irresponsible executives. This system of failure needs to be addressed, and it must begin with those nimble entrepreneurs and innovators that can add much needed dynamism to this economy and pave the way to the American New Era.
We live in a DIY (Do-It-Yourself) generation, where Americans everywhere want to do things on their own terms. They are looking for self-achievement and personal satisfaction. In the 1950's the American Dream was to own a home, something which has unfortunately now turned into a nightmare for many. Today's American dream is about self-determination and starting a business as the ultimate expression of this shared goal and American ideal. You have millions of small businesses that are trying to keep this dream alive and millions employed, but our government is not providing them with the right level of support and detailed attention they require.
I am by no means advocating for handouts to failing small businesses. On the contrary, I am advocating for those thriving and innovating enterprises that need a leveled playing field to thrive.
We need to level the playing field as it relates to government contracts and bundled appropriations. Often times, small businesses without the adequate political contribution, connections or DC lobbyist on payroll are left out in the cold. Also, small businesses are getting ignored in the stimulus plan. Government contracts should increase the allocations made to small businesses (i.e. Defense, marketing/communication, infrastructural, etc.) and move for more meaningful reform for those contracts that are typically grand-fathered in or awarded based on political affiliation.
The process by which to apply for these government contracts and SBA loans needs to be simplified. There is far too much red tape, hoops and fire to overcome in order to even get your foot in the door. The government should look at how private companies issue RFPs. They are typically 10 to 15 pages long as compared to government paperwork that can go up to 80 pages long and requires more time and work to complete then what the contract is actually worth.
If one where to administer simple survey to several small business owners across the country and asked them if they can name one SBA program I am willing to bet that less than 5% could even provide an answer. This is an obvious disconnect, that requires a solution.
Here are some immediate recommendations to make the business landscape more favorable for growing small businesses:
1. We need to inject more funds or put forth some tougher parameters for Banks receiving TARP money with a requirement that they must begin lending in the next 10 days at a fixed rate of interest for a 6-month period of time.
2. Small Businesses should have their taxes reduced by 40% for 2 fiscal years. I am defining Small Businesses as those with 30 employees or less with $10,000,000 in operating revenue. Today's government standards define a small business as being such if revenues do not exceed $100,000,000. In reality most small businesses are between $250,000 to $10,000,000 in revenues and have between 5 to 30 employees on payroll.
3. Small Businesses should also be able to draw lines of credit up to $1,000,000 from banks at a 2% interest rate for the first 2 years, then up to 5.25% for the duration of the loan. Those small businesses with Lines of Credit already active should have the opportunity to renegotiate those rates to a lower one for the same period of time. These will get small businesses buying equipment again and hiring.
4. Requirements for these loans would comprise of 10% collateral by the small business owner and with the SBA underwriting the rest. And the process by which one has to apply must be simplified to better fit the time bandwith and limited human resource of a small business.
5. Companies should be in business for 3 years to qualify for those higher dollar amount loans as long as the loan amount does not exceed 15% of the company's revenues.
6. Start Up companies should also be able to access capital/credit up to $100,000. These will require 20% personal collateral with the rest being underwritten by the SBA.
7. Small businesses should be given a government subsidy to pay for 50% of healthcare costs. This will free up working capital for new employee hires. Right now the Recovery Act requires small business to subsidize 65% of healthcare cost for employees who have been let go. This requirement should be waived for companies of fewer than 20 employees with revenues less than $10,000,000.
So as we look back at the goals of our founding fathers and America's promise of being the land of opportunity, we must ensure that we are providing that to our small businesses. Let me be clear, I think President Obama is the right person, at the right time for our country, however, without that Hope for small businesses we are a lost cause.
Phil Colon, a small business advocate __title_ Click this link. and founder of ad agency Project 2050 Inc. __title_ Click this link.
###
Post Comment:
Trackback URL: http://www.prweb.com/pingpr.php/RW1wdC1NYWduLUxvdmUtQ3Jhcy1Db3VwLUNvdXAtWmVybw==
Bookmark -
Del.icio.us |
Furl It |
Technorati |
Ask |
MyWeb |
Propeller |
Live Bookmarks |
Newsvine |
TailRank |
Reddit |
Slashdot |
Digg |
Stumbleupon |
Google Bookmarks |
Sphere |
Blink It |
Spurl
|
