Small business owners have to worry about a lot of things and government involvement in their businesses is one of those things. It sometimes feel like businesses are at war with the government from the local or federal level given the new regulations that at times work against their favor, the struggle of getting the right permits and off course paying the other expenses like cash-flow, payroll and inventory etc. It’s not a surprise that small business owners and the government don’t see eye to eye sometimes but as much as they can be a nuisance to business owners the government can also be of great help to them also. Small businesses contribute so much to the U.S economy creating over 60% of new net jobs and employing over half he working population. So what are some ways the government could help small businesses?
If we look at the facts small businesses are not in a good position right now financially speaking. According to an article published by Karen Mills at fortune.com she says “JPMorgan Chase JPM 0.10% Institute’s Cash is King: Flows, Balances and Buffer Days report showed that on average small businesses hold only 27 days of cash as a buffer. Additionally, a July 2016 American Express AXP 1.04% OPEN report found that nearly half (49%) of small business owners are concerned about cash flow issues at their company, and more than one-quarter (27%) experienced a cash flow crunch in their most recent quarter.” She summarizes to say that American small businesses are coming dangerously close to using their emergency savings which should be a cause for concern. Fortunately there are ways that this can be and has been circumvented through government intervention and cooperation with businesses. Local governments for example could for example provide funding to the small businesses in their community through low interest funding programs that could improve or upgrade their facilities. This creates a positive relationship between the two and it makes more sense given that local government officials are more closer to the people than those that are higher up. It’s important for businesses to check their financing options from their local government through their SBA websites/offices. There are a lot of opportunities that can be missed by not taking advantage of these resources.
Diversity in funding sources could further benefit small businesses more significantly than “one giant pipeline” as entrepreneur experts believe according to article post by Steve Marlottl of Huffingtonpost. “Government can encourage development of new capital sources-such as equity crowdfunding and peer-to-peer lending”says Marlottle which is a perfect alternative for people who want to raise their capital. Speaking of diversity when it comes to funding there are different programs that target certain demographics within the small business community like disabled veterans in the Pittsburgh, Pennsylvania office who can qualify for up to $350,000 in funding though again this varies per state but there is more that the government can do aside from funding small business owners. Local and State governments could be potential clients for small businesses too which can be done through online research on your state’s or district’s government contracting agreements. If you’re a small catering company for example and you would like to get your business more exposure if you’ve thoroughly gone through the process of securing a government contract ( which is a time consuming endeavor filling out lots of paper work) you could have your business cater to government events like political rallies or fundraising events that can get you the publicity you want not to the mention the lucrative deals you could get in the future. The networking opportunities that would be available is another big plus.
It can be frustrating when your needs business does not have what it needs to remain operational and for good reasons it is something that should be looked at with great interest. According to the SBA waiting for or not receiving payments from companies that small businesses supply to is the second most common cause for businesses to fail. Back in 2011 President Barack Obama and the then head of the SBA Karen Mills recognizes this issue and they took the initiative to allow business to get the funding they need at a much faster rate. The created a new policy called QuickPay which required federal agencies to pay small business contractors within 15 days. This had such a significant impact on the way small business can maintain their cash flow that the UK has also followed their example to make changes in their business culture. In response a new small business commissioner post was tasked to deal with the “poor payment culture” of the country. This policy has had a positive effect as Karen Mills stated “With small businesses responsible for nearly $100 million in contracts with the federal government, our goal was to get this cash to these small firms faster, so they could expand their businesses, market their products and create more jobs. And, guess what? It worked.”
Small business and the government may at times be at odds with one another but considering how much small businesses bring to the table when it comes to jobs, employment and innovation experts know that it would be unwise to leave small businesses to fend for themselves. This is why business and government relations must improve as they share the common interest of having a strong and stable economy and the more often they work together the more both parties benefit from each other in terms of lucrative business deals in the future and political support. So if you’re wondering what the government can do for your small business try reaching out to them by phone or online to explore your options and next time see what service you can provide to the mayor of your city so you could probably create a lasting partnership that gets your business’s name further out there.