In 2019, the United States Small Business Administration (SBA) reported that small businesses are responsible for 44 percent of the United States’ economic activity. But from 1998 to 2015, the SBA found a slow rate in the growth of the gross domestic product, or the market value of products and services, of small businesses. The growth averaged at 1.4 percent per year. Large businesses, on the other hand, grew at 2.5 percent per year.
Although the growth is slow, it’s still evident that small businesses make up a significant part of the United States economy. Without them, the economy would go on a downward spiral. This, in turn, would cause a cascade of events such as people losing jobs and income. But, despite the big contribution that small businesses make, it’s no secret that they struggle the most in the world of business. Their struggle was even more amplified by the COVID-19 pandemic. In the U.S., 51 percent of businesses were affected by the effects of the pandemic. Fifty-one percent of them had to close their establishments due to the lack of customers and funds.
Given these struggles, it’s become clear that supporting small businesses are crucial in our communities. These are the programs that can help them with various issues.
Legal Guidance and Aid
Starting and running a business isn’t as easy as it seems once the legal aspects are involved. First, business owners must be adept at understanding contracts. This is before they could strike up deals with other businesses and individuals. They must be well-versed with various legal agreements such as buy-sell, transfer, and employment and independent contractor dynamics. This is why business owners need to have a go-to business attorney for any legal guidance and aid they may need today and in the future.
But legal aid, especially top-of-the-line aid, comes with a hefty price tag. Thus, many small business owners can’t afford it. Fortunately, many organizations and entities are dedicated to helping small business owners with their legal needs. An example is the Farmers’ Legal Action Group (FLAG). A huge facet of small business owners is farmers. Because of this, this nonprofit law center was founded to support our local farmers, especially the ones who come from low-income communities.
Training and Mentoring
Coming up with an innovative idea for a business is one thing. But ensuring the success of our businesses is a whole other thing. In fact, a 2019 study by Convergehub found that over 50 percent of small businesses fail within their first year. But that number grew significantly higher–over 95 percent of them failed within the first five years. This is why small business owners must be properly trained in running a business. But that’s not easy. It’s not like they could enroll in business schools. The likes of the Wharton School and the Harvard Business School don’t exactly come cheap.
The good thing is that they can access training and mentoring through various organizations around the country. This would make it significantly easier for them to learn about business management. And they won’t need to shell out too much money for business schools and for-profit consultants. An example is AnewAmerica. It’s a nonprofit organization that specifically targets individuals from low-income communities. They provide training and technical assistance to business owners. This is to help them pursue an economically-bright future.
More often than not, the biggest hurdle that small business owners face is sourcing their starting capital. Without any money to use for investment, their business will never see the light of day. This is what hinders many individuals from evolving into successful business owners. Luckily, there are countless programs and organizations across the country that offer loan services for business owners.
But the biggest support that they could run to is the U.S. SBA. This government entity is created specifically to aid small business owners. One of their programs is helping them get loans. They don’t directly lend money to business owners, though. Instead, they set guidelines for loans and connect business owners to the administration’s lending partners. Thus, they make it much easier and safer for small business owners to acquire loans for their capital.
During the height of the COVID-19 pandemic, many small business owners watched their life’s work disintegrate and eventually close down. They lost their customers and income. They lost their livelihoods. But during such times, they need to remember that their situation is not hopeless. There are organizations, government entities, and even individuals that they could reach out to for support.