|
Firms tackle labor shortage
|
 |
March 22, 2000: 9:29 a.m. ET
Women-owned companies face obstacles in the tight labor market
By The Applegate Group
|
NEW YORK (CNNfn) - There was good news and not-so-good news for small-business owners released in the past two weeks. The good news is that loans to women business owners backed by the U.S. Small Business Administration have almost tripled since 1992. The bad news is that another survey revealed a looming labor shortage for small companies.
"Women play a huge economic, cultural and social role in every part of American life," said SBA Administrator Aida Alvarez during a telephone press conference last week. "Through financial, technical and management assistance, the SBA is doing more than ever to help level the playing field for women entrepreneurs who still face obstacles."
Alvarez, noting that March is National Women's History month, said the SBA has backed more than 69,440 loans since 1992, providing guarantees worth $10.7 billion. (The SBA does not lend money directly to business owners. It provides loan guarantees for loans written by other lending institutions).
To help women just starting a business, the SBA offers a loan pre-qualification program that helps women through the application process.
Alvarez said she is encouraging more venture capital funds to invest in women-owned firms. In fiscal year 1999, the SBA's Small Business Investment Company Program invested $4.2 billion dollars in small firms; however, only about 1 percent, or $55 million, went to women-owned companies.
Today, nearly 40 percent of all businesses, about 9.1 million, are owned by women. Their companies employ 27.5 million workers, and post more than $3.6 trillion dollars in annual sales, according to Alvarez.
Alvarez noted the SBA also is working to increase federal contracting opportunities for women entrepreneurs. In fiscal year 1998, women-owned companies won $4 billion worth of federal contracts. The agency has signed agreements with 10 federal agencies and 15 business and professional women's organizations, to help promote SBA programs.
A major study about the future of small business in America was also released last week. The prognosis is good, although there will be fewer start-ups in the next five years, and a smaller work force, according to the report, which was sponsored by American Express, IBM, National Small Business United and the Research Institute for Small and Emerging Business (RISE).
"We are on the verge of a small-business renaissance period fueled by technological empowerment," said Dr. Richard W. Oliver, an author and management professor at Vanderbilt University's Owen Graduate School of Management. "All three factors are in place now -- technology, capital and people --so we now have a vibrant small-business sector that's forcing the economy to be innovative."
According to the study, between 1996 and 2006, the number of young workers (ages 25 to 44) in the labor force will shrink by nearly 2 million workers. Because this particular age bracket is the principal source of labor for new entrepreneurial companies, Oliver predicts there will be fewer start-up companies. Small-business owners also will be pushed to hire more women and minorities, and keep older employees on the job longer.
"Small businesses are going to need a new type of employee for a new type of business," said Mark Schultz, research manager at Washington, D.C.-based RISEbusiness Inc. "Our study shows chronic labor shortages, particularly in the high-technology labor market."
The report predicts a 10 percent business start-up rate, and a 9 percent business closure in a typical year. On the bright side, the study predicts small businesses will have access to more credit and capital in the next 15 years.
"We are going to see a shift in how businesses are formed based on two forces; first, non-traditional lenders will finance more small businesses, and second, we will see an increase in financing options," said Richard Tambor, vice president of Small Business Services at American Express.
The study also predicts dot.com companies will continue to attract money from venture-capital funds, and small businesses will gravitate toward online banking.
Amex also recently released results from its "Voice from Main Street" poll of 1,100 small-business owners. The polls ranked improving schools and training for young people, and affordable health care for employees and business owners at the top of the list. Tax cuts and tax reform ranked fourth, and reducing government regulations and paperwork ranked fifth.
More than half of the business owners polled said they feel local politicians listen more to their concerns, and 60 percent said congressional candidates don't pay enough attention to small-business issues.
Briefly ... Nina McLemore, president of Regent Capital in New York City, is the new chair of the National Foundation for Women Business Owners. Myra Hart, a professor at Harvard Business School in Boston, is vice chairwoman of NFWBO, the research arm of the National Association of Women Business Owners.
"Internet Investing 2000" is set for April 10-12, 2000, at the Tribeca Rooftop in New York City. The conference, sponsored by International Business Forum, is designed for venture capitalists and angel investors interested in investing in Internet businesses. For details, visit: www.ibforum.com, or call 1-516-594-3000.
The 2000 National Minority Supplier Development Council Conference and Business Opportunity Fair is scheduled for Oct. 29-Nov. 1 at the Ernest N. Morial Convention Center in New Orleans. This year's theme is Business Diversity: The New Frontier in the 21st Century. More than 5,000 corporate executives, government officials and minority business owners are expected to attend.
There are an estimated 3.2 million minority-owned businesses in the United States, employing about 4 million workers, and generating more than $500 million in annual revenues. For detailed information, write to NMSDC, 1040 Avenue of the Americas, 2nd Floor, New York, N.Y. 10018, or call: 1-212-944-2430.
- reporting by Julie Neal.
|
|
|
|
|
|
ApplegateWay
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
