Elected officials proclaim to understand and support small businesses but often fail to provide a truly conducive atmosphere for a sector that makes up the majority of the economy, according to Hector Barreto of the California Commission for Economic Development.
Speaking at the Napa Chamber of Commerce's E3 Economic, Education and Expectations Conference at the Silverado Resort, Mr. Barreto shared his experiences and knowledge gleaned from his tenure as the head of the Small Business Administration under former President George W. Bush.
He told the crowd of about 200 that 99 percent of all businesses within the U.S. are small business -- those with fewer than 500 employees and less than $6 million in annual revenues.
And government should be more accommodating of the 27 million such businesses in the country by providing clear incentives rather than confusing rules and regulations, Mr. Barreto said.
"You can call them small businesses, but they are not small in what they do," he said. "We hear a lot about small businesses from our elected leaders. But it always strikes me how ignorant, for lack of a better term, they are about them."
"Small businesses are really struggling. Government is not very good at creating jobs. It's really entrepreneurs and small businesses, and government is needed to create the right environment," he added.
Particularly, small business owners express uncertainty about what lay ahead, with respect to how health care reform will impact them, the deficit and uncertainty about taxes, Mr. Barreto said.
But there are resources, he said, and business owners should be mindful of three things as they seek stability and growth -- capital, contracts and capacity.
Capital has been challenging, as banks have reduced small business lending by as much as 30 percent in recent years, he said. But small businesses should seek contracts from the federal government, where as much as $100 billion is available, Mr. Barreto said, adding that a vital resource is the Small Business Administration.
"Anything we can do to help them get that, they can take care of a lot of issues," he said of the SBA efforts.
He also urged small businesses to remain ever watchful on the political process to keep abreast of what they need to know to operate their companies.
“In the U.S., 50 percent of businesses fail in the first four years. Why? They don't know everything they need to know. When times are good, small businesses only look at what's in front of them, but when times are bad, they're looking up and around," Mr. Barreto said.
Small, struggling businesses might consider micro-lending options and smaller loans from the SBA, even if they may have posted consecutive losses. "Get one of those small loans, service that loan and that will get you the credit," needed for a larger loan.
He added, "All businesses start small. No one starts as a Fortune 500 Company."
Other speakers at the conference included Assemblyman Tom Torlakson, D-Contra Costa, Gary Craft, principal and founder of Craft Consulting, Jim Cassio, principal of Jim Cassio and Associates, Marc Johnstone, a business coach for Shirlaws, David Crane, special adviser to Gov. Arnold Schwarzenegger for jobs and economic growth, and Alan Deutschman, author and motivational speaker.