Originally posted at Pro/Vision Coaching.
What exactly is small business? I’ve been pondering that question since joining Pro/Vision Coaching, as our target is clearly stated as a firm that coaches the “small business owner”. One of the recurring themes in the answers I’ve found is that a small business is not necessarily able to fight for itself. Big business has its corporate lawyer divisions with lobbyists and special interest groups making sure that the interests of the company have every chance of succeeding. Even medium sized companies have that kind of ability—if not on the national level, then on the state and local levels—and every small business I find is without a doubt unable to force what’s best for them into being.
The SBA (Small Business Administration) has been one of the key players in the fight for the little guy. Their focus on helping small business and providing the small business owner the tools needed to survive in this marketplace has been has been the sling in this ever continuing David vs. Goliath struggle. Here is the truth: “small businesses have created 65 percent of all the new jobs in the past 17 years and employ half of America’s private-sector workforce” (AOL Small Business). As the backbone to the American economy, there is no doubt of the importance of organizations such as the SBA play in the lives of people all over this country.
Who exactly is the little guy? Defining the criteria for this sector is a vital process, as separating out who needs the help – and it is traditionally defined by amount of yearly revenue and number of employees. “The SBA sets its cutoffs based on either the number of employees or average annual receipts. Previously, $7 million in annual revenue was the cutoff for most industries” (Entrepreneur Daily Dose). What this cutoff does is protect the small businesses inside that range by providing resources and a voice, as the larger companies have the resources to accomplish it themselves.
What if the larger companies were privy to the resources and help that the small businesses were? Herein lies the danger for small business. If Goliath were prepared with his shield to protect from a projectile attack (and the respect for his challenger), the outcome could have turned out far worse for David. This is a danger that every small business must now prepare for, as “the SBA boosted that cutoff to more than $35 million for some business types. The result is that 18,000 more businesses now can seek help from SBA in obtaining federal contracts and loans” (Entrepreneur Daily Dose).
If a bigger business has the resources to take care of those needs, yet are able to save their own resources and use the SBA it causes to ripples of effect: 1) big business has even more resources with which to defeat their smaller competition, and 2) small businesses have much less. Imagine taking away David’s sling and giving it to Goliath – not a pretty picture.
It is not the purpose of this article to guesstimate as to why the SBA is making such drastic changes to the businesses they help – there are both positive and negative aspects to this decision. The challenge, however, is clear – small business just got thrown into a larger pond with bigger fish and less total resources to go around. Be prepared to get less help from Uncle Sam next year.