Feb 4, 2019 in Business

Small Business Development Programs

Starting a small business is becoming more popular in the USA. Being a veteran, it is always difficult to get into self-employment since the incomes give a small chance to have a start-up budget. The US Department of Labor has implemented some experimental programs for providing financial assistance and management advice to people who want to start their own small business. In this case, we will talk about a model airplane building and an aircraft remote control. In addition, the US Small Business Administration has developed special programs, which are offer consulting, training, and education to the clients. As it turned out, potential entrepreneurs more often experience lack of managing skills rather than lack of capital.

Some of the projects, which are aimed at starting a business, include the Small Business Development Centers, the Office of International Trade, and the Office of Veterans Affairs. They presuppose services that are available, “at workshops, seminars, through one-on-one counseling, and through publications and the agency’s electronic bulletin board system” (U.S. Small Business Administration's business development programs, n.d.). Each of these programs has its own value. Coming to the Business Development Center, you can get almost everything done for you: consulting on how to do a business plan, what location would be the best for you, pricing approach, and competition in the area. The Office of International Trade is responsible for export strategy. Here are two main points: the Office provides education for small business on how to export and develop a new financing mechanism for the funding of export sales. The Office of Veterans Affairs is created for the use of veterans, who are willing to go into business. Veterans can get all needed counseling or training.

To sum up, it is necessary to say that the Small Business Administration focuses not only on providing financing for firms, which are ready for export, but also on providing information and education to non-export-ready business.

Small Business Funding and Administration

As a small business faces many challenges, the new products and services to meet special small business requirements are developed by OPIC (Overseas Private Investment Corporation). A special fund for supporting such products and, in this way, for small business assistance has been created. $20 million direct loan for capitalizing a new small business fund has been approved. This fund has an intention to invest in approximately 25 subprojects; on this basis, the average fund investment is going to be less than $1 million.

One more important fact is that the American small businesses act as subcontractors from OPIC large infrastructure project support. Those projects give excellent subcontracting opportunities to small businesses for product exporting and expanding. Again, it is a great possibility for small businesses to work more efficiently and cost effectively since the export assistance has been established.

The US Small Business Administration plays a big role in business support. It is the major guarantor of loans, which future entrepreneurs can get from the bank of their choice. When looking for funds to start or expand a new business, you have to visit the business loan officer at the bank, tell about your plan, show your present level of awareness about requirements, and obtain all the necessary documentation for explaining their loan policies. After that, you will be asked to put up 30% of the project cost that you request. It is important to understand that the SBA does not provide loans directly; however, it reviews all applications of entrepreneurs. To succeed in getting the needed SBA-guaranteed loan, you will have to demonstrate your ability to pay back the loan from the cash flow and incomes from your business. Some categories of SBA-guaranteed loans give preference to ownership of veterans, women, or minorities. Moreover, SBA-guaranteed loans are used only for financing businesses, which are likely to be started, or for expansion of a business. These facts are undoubtedly good for our situation.

Competition in the Model Airplane Building Business

When you intend to go into business, you have to consider many factors, especially the competition rate in the specific area. Model aircraft building is not a new phenomenon nowadays. Consequently, a small business, engaging in producing model airplanes, has to take into account large multinational organizations, specialize in the same product.

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In the United States, plastic aircrafts started being produced in the 1950s. The large companies like Hawk, ITC (Ideal Toy Company), Comet, Lindberg and some others were involved in such kind of business. Later, now well known Monogram, Aurora, and Renwal joined them. After years of hard work, the above-mentioned organizations have earned popularity, reputation, clientele, well-organized relations, and confidence on the market. Thus, trying to compete such a “monster” can lead to failure of a small and unknown company. Therefore, the programs of Congress can help small business entrepreneur to make a good start and succeed. On the one hand, this is a great opportunity for the future potential businesspeople. On the other hand, small business development might result in a decrease of a big business demand. Because of a lower price and higher quality, small business production could take over.

For the above-mentioned reasons, small business development programs are likely to harm the work and incomes of large companies. In addition to this, more and more people would want to start their own business, instead of working for the government. This might lead to the emergence of numerous similar businesses, which would not be able to survive the competition and, in the end, would simply go to rack and ruin.

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