on Small Business and Says Go Further
San Francisco, CA (PRWEB) July 12, 2012
President Obama announced six initiatives yesterday that will help small businesses; CAMEO, the California Association for Micro Enterprise Opportunity, says his initiatives will help some small businesses, but not the overwhelming majority that are very small and micro businesses; what most small firms need goes beyond the President’s efforts.
The Administration’s initiatives include five executive actions that will accelerate Federal payments on contracts to small businesses, reduce paperwork for federal loan programs, and make it easier for small firms to access loans and tax credits, and one legislative proposal to raise the amount of investment small businesses can expense on next year’s taxes.
President Obama’s plans are great for some small businesses, but what the large majority of small businesses really need is help with their business plan or cash flow projections.
“The first step to success for locally grown and start-up micro-businesses is business assistance: training and mentoring for new entrepreneurs,” says Claudia Viek, C.E.O. of CAMEO. “We surveyed our members, and found that when business owners receive business assistance, they have an 80% success rate and create two jobs on average over three-to-five years.”
It’s fairly well-established in the business research literature that the success rate for business start-ups is under 50%.
The President’s FY 2013 Budget increases small business access to capital, but “proposes to terminate the PRIME Technical Assistance program” and reduce business technical assistance programs by eight percent.
It’s these business assistance programs – the mini-MBA’s, the programs that teach business owners to create a viable business model and write a well thought out business plan– that ensure the success of 88% of the nation’s businesses, or the 25.5 million businesses that are very small or micro-businesses with five or fewer employees. According to Association for Enterprise Opportunity, these businesses generate $2.4 trillion in receipts and account for 17% of GDP and employ more than 31 million people.
Micro Enterprise Development Organizations provide training and services to a these entrepreneurs: the unemployed, the college graduate unable to find a job, women, minorities, and low income individuals. For these businesses to succeed, they need business management tools and skills, they need business networks and support systems, and they need access to capital.
Increases in the Treasury and SBA loan programs have increased access to capital for the very small businesses. However, ‘access to capital’ must include business training and credit assistance or there won’t be a pipeline of loan ready businesses. The two go hand in hand.
President Obama needs to invest in our country’s job creators- very small, locally owned businesses.
CAMEO’s mission is to promote jobs, economic opportunity and community well-being through entrepreneurship training, business coaching and microfinance. CAMEO is California’s statewide Micro Enterprise association made up of over 160 organizations, agencies and individuals dedicated to furthering the fortunes of micro-businesses in California.