Wednesday, November 13, 2019

US expert imparts key to survival of SMEs and start-ups

Jul 06. 2016
Facebook Twitter


1,782 Viewed

GOOD MANAGEMENT across all main aspects of a business operation is crucial to the success of small and medium-sized enterprises and start-ups, especially in a highly competitive market, an American expert said yesterday.

Giuseppe Gramigna, SME expert adviser on national and multilateral entities and chief economist at the US Small Business Administration (SBA), shared his personal view with The Nation that good management encompassed a business’ financial-management system, credit guarantees, cost management and product quality.

Practising good management in these as well as other areas is the way to ensure business survival during a period of high market competition, he said. From his experience in the United States, up to 60 per cent of SMEs and start-up businesses are unable to survive high competition between the first and fifth years of their existence because they have insufficient operating capital, while their products fail to respond to the market’s needs.

However, as SMEs and start-ups are necessary to drive a country’s economic growth and job creation, government has to support the sector by developing key infrastructure, legal requirements and communications, among other things, and thus create the right network to enable them to do business.

Countries including Thailand must have a legal system that makes it easy to establish a business – as well as to withdraw from one – and must |create a network and logistics system suited to entrepreneurs wishing to conduct business, he said.

“Personally, I think the way to do business has to be easier, as it is more of a challenge for SMEs and start-ups. They also have to get a credit guarantee to support them when they need to raise funds for their business operations,” he said.

Gramigna said an SMEs law – the Small Business Act – had been in existence in the US since 1953, under which the SBA has delivered millions of loans, loan guarantees, contracts, counselling sessions and other forms of assistance to small businesses.

The SBA provides assistance primarily through four programme-based functions:

Access to capital (business financing). The SBA provides small businesses with an array of financing, from the smallest needs in micro-lending to substantial debt and equity investment capital (venture capital).

Entrepreneurial development (education, information, technical assistance and training). |The SBA provides free individual face-to-face and Internet counsel-ling for small businesses, and low-cost training to nascent entrepreneurs and established small businesses in more than 1,800 locations.

Government contracting (federal procurement). In keeping with the mandate of the Small Business Act, the SBA’s Office of Government Contracting sets goals with other federal departments and agencies to reach the statutory goal of 23 per cent in prime contract dollars to |small businesses. The office also |provides small businesses with |subcontracting procurement |opportunities, outreach programmes and training.

Advocacy (voice for small business). Created in 1978, this office reviews |congressional legislation and testifies on behalf of small business. |It also assesses the impact of the |regulatory burden on behalf of small businesses.

Facebook Twitter
More in Business
Editor’s Picks
Top News