Given the current economic situation, small business growth is crucial to recovery across Michigan.
Small Talk recently interviewed Richard Temkin, Michigan District director for the Small Business Administration (SBA). The SBA works with partners who assist in providing strategic planning training to helping small businesses understand capital access under the American Recovery and Reinvestment Act.
ST: How important are small businesses to Michigan and its economic recovery?
RT: Entrepreneurship is at the forefront of every economic recovery strategy in the country and especially in Michigan. When it comes to job creation, small business continues to make a real contribution to our economy.
Small businesses with less than five employees had a net increase of 22,194 in their employment figures from 2005 to 2006, according to the latest figures published by the SBA’s Office of Advocacy. In contrast, businesses with 20 or more employees in the same time period had an increase of only 11,736 jobs. This means that from 2005 to 2006, two-thirds of Michigan’s net new jobs came from firms that had less than 20 employees in 2005.
Consider this: from 1991 to 2006, businesses with less than five employees have been the only segment to add new jobs in Michigan each year. Job creation and growing economies – these are the reasons SBA strives to support Michigan’s entrepreneurs and why small business makes a real difference in our economy.
ST: Access to capital is challenge. What available tools are there for small business owners? What trends have you seen in this regard?
RT: SBA has the tools and training to help lenders use our loan guaranty programs.
Since the credit crunch began, the SBA Michigan District Office has heard from many small business owners who have experienced declining revenues and diminished profitability. Many business owners have had their lines of credit decreased or even closed. Lenders are diversifying their commercial loan portfolios to eliminate riskier industries, and longtime business owners are being asked to find new banking relationships because lenders view their industries as high risk.
Enhancements to the SBA loan programs, made available under the American Recovery and Reinvestment Act, continue to be a key factor in the rebound of SBA-backed loans for small businesses. Over the same period, the SBA has seen an 86% increase in the number of loans and a 206% increase in dollars.
We encourage small business owners to explore all options for financing small businesses.
ST: How is the SBA helping displaced workers considering entrepreneurship?
RT: The Michigan Small Business and Technology Development Center, an SBA funded program, offers FastTrac® New Venture Entrepreneurial Training. This entrepreneurial boot camp is an intensive, 10-week program that helps new business owners, including displaced workers, evaluate business opportunities and develop an action plan for success. Over 1,000 people will attend FastTrac training this year in Michigan.
ST: Where and why does Michigan have strong support programs?
RT: Michigan has a rich and diverse entrepreneurial support system that is nationally recognized. The Michigan Small Business and Technology Development Center supports 12 regional offices and over 30 satellite offices. Each provides counseling and training in all 83 counties in Michigan in cooperation with the SBA. The state headquarters, located at Grand Valley State University, manages regional teams of small business consultants who counsel, train and provide advocacy for existing small businesses, new ventures and innovative technology companies.
The SBA provides funding to Women’s Business Centers located in Ann Arbor, Benton Harbor, Detroit and Grand Rapids. Women’s Business Centers provide individualized services that address the needs of women entrepreneurs. SCORE, which is funded by the SBA, is comprised of over 200 volunteers who provide assistance to businesses, including offering free online counseling with experts from across the country.
ST: What is e200?
RT: The Emerging 200 is an initiative supporting Detroit-based small businesses that have substantial potential for growth. The objective of this program is to provide urban companies with the network, resources and motivation required to build a sustainable business of size and scale.