Photo: The Associated Press
Small- and medium-sized businesses, the lifeblood of our nation’s economy, were hit hard by the recession.That’s why some states and cities have made it a priority to establish programs that prevent them from failing — by providing counseling and support, offering easier access to loans and grants, and encouraging growth in general.
If you’re an SMB owner, check out the things that some areas are doing to rescue their small companies — and perhaps campaign your representative to do something similar in your region.
According to the New York Times, in January, Connecticut's Governor Jodi Rell announced the Small Business Innovation and Diversification program, which allotted $250,000 in grants for innovative manufacturers with fewer than 500 employees.
'The specific objective is to enable firms to design and develop innovative technologies that diversify their portfolio of products thereby retaining/increasing sales and employment in the State,' the website reports.
The funds are awarded on a competitive basis; companies go through the application and review process to potentially win a grant of up to $25,000.
In January, Massachusetts approved a program allowing the state government to defray the high costs of health insurance for a number of its small businesses, Entrepreneur reports.
According to the Boston Globe, the Health Connector board is taking over the administration of private health insurance for 17,000 small business, most with fewer than five employees.
They're cutting monthly fees from $35 per employee to $10, a decision that should save $300 per employee annually, Entrepreneur estimates.
Michigan's unemployed workers who have an entrepreneurial streak are in luck. In June of 2009, the Michigan Small Business and Technology centre began a program offering low-cost startup training for people who had been laid off.
From writing a business plan to learning about financing options, the training sessions (a partnership with the Kauffman Foundation) cover all the basics for first-time entrepreneurs.
According to the New York Times, 527 individuals have taken the course, and 160 of them have launched new ventures.
In November 2009, Florida partnered with renowned entrepreneurship development organisation the Edward Lowe Foundation to develop a plan for growing second-stage companies.
Called GrowFL, the program is centered around a strategy called 'economic gardening,' which the New York Times explains is really about expanding customer base. GrowFL 'helps established companies identify new markets, research industry developments and maximise their use of social media,' the New York Times article continues.
They also offer a host of group events where CEOs can network, discuss issues, and learn from seminars.
In January, St. Louis County launched Boost, a program designed to offer its small businesses better access to loans.
According to STLToday.com, the loans are unique in that they have 'no income requirements or prepayment penalties, and borrowers can choose either a fixed or floating interest rate.'
The loans are made possible through a county partnership with PNC Bank, who is providing a $5 million line of credit. The New York Times reports that more than 100 business owners have already applied to take advantage of the new offering.
One Northeast Ohio small business council has gotten creative to help out local businesses. It's encouraging area residents to proudly buy local through an innovative campaign called 'I Buy NEO' (where 'NEO' stands for 'Northeast Ohio).
Supporters can use their 'I Buy NEO' loyalty card -- which go for $10 apiece -- to get discounts and accrue cash rebates at participating businesses.
Small businesses pay nothing to join the program, and participating ones are already reaping the benefits: the New York Times reports that 'sales activity tied to the loyalty cards has increased 40 per cent over the last six months.'
San Francisco is enacting a program that subsidizes 100% of certain new hires' salary, reports the New York Times.
Businesses can take advantage of Jobs Now! by hiring people who have been referred by the city; these unemployed individuals go through an application process to be part of the program.
According to the website, the program just placed its 2000th hire last week.
Miami-Dade County has been offering $5,000 grants to struggling micro-enterprises, says Entrepreneur.
The program is targeting the smallest businesses who are really suffering: to qualify, an individual must be a 'low-to-moderate income small business owner (200 per cent of the Federal Poverty Guidelines) and have a business with no more than five employees including the owner,' reports the Miami Herald.
Note: The deadline for this program passed in early February, but it's a good example of how one area is rescuing its struggling small businesses.
All states offer some resources for small business owners who are struggling.
One of the best nation-wide programs is sponsored by the Small Business Administration: regional Small Business Development centres.
These centres offer expert business development resources and counseling to small business owners, completely free of charge.
This is a great resource for SMB owners. If you haven't yet, you should consider checking out your local SBDC; you can learn more here.
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