Jim Mork, speaking of the many reasons for small business failure, says in part: > ...Some are just poorly-run businesses. > The MAJORITY of small businesses fail. It is so > easy to get into a business for which there isn't > a breakeven market. And even when the market is > good, lots of people need to fail in business to > find out they lack the basic skills of an > entrepreneur. There are a limited number of > things a city can do for startup businesses since > most assitance will be wasted on people who are > poor managers.
Jim is correct. I believe that one way to reduce the number of small business failures, is to get government out of the 'business financing' business. In Minneapolis, I don't believe the city, via MCDA, should be providing business loans. Government , by providing financing, makes it too easy for underfinanced, ill-conceived and poorly managed businesses to get started in the first place. Taxpayers should not be the source of financing for small businesses that cannot obtain conventional loans from private lending institutions or investors. Private lenders and investors screen out high-risk business ventures, and they get paid for assuming the risk when financing is provided. Taxpayers receive no compensation for good loans that would offset losses from bad loans made on their behalf by the government. If an entrepreneur has a good concept and a good business plan outlining their strategy for success in a competitive marketplace, they should be able to obtain private sector financing-- if not, they certainly should not receive non-recourse government funding via low-interest and no-interest loans. Afterall, the prime rate is only 4.25 percent. The SBA has guaranteed loan programs and many private lenders participate in the SBA programs. Participating lenders will package the deal on behalf of business owners. I don't feel that the MCDA and other state/local government lending programs are needed in this marketplace. As for the influence of neighborhood crime on small business. It increases risk and uncertainty-- as reflected in the cost for liability insurance as measured in various parts of the metro-area for example. Added costs to cover vandalism, theft, security for employees/customers, etc., only make it more difficult to compete with similar businesses operating in a 'better' business environment- where the cost of doing business is lower and customers feel safer on adjacent streets and parking lots. These issues also impact the ability to obtain business financing, get employees, suppliers, etc. Basic infrastructure-- neighborhood streets, parking, transit, schools, crime, etc.-- definately influence the ability for any given business to survive and thrive-- or not. Michael Hohmann Linden Hills www.mahohmannbizplans.com _______________________________________ Minneapolis Issues Forum - A City-focused Civic Discussion - Mn E-Democracy Post messages to: mailto:[EMAIL PROTECTED] Subscribe, Unsubscribe, Digest, and more: http://e-democracy.org/mpls
