Survey: Fed small-business programs not reaching targets

2/6/2006

The poll, conducted by American Management Services and Suffolk University , found that 93 percent of small business respondents said they have not worked with any federal agencies to receive assistance. Only seven percent said they had.

“This poll tells us that most small business owners are in the dark when it comes to knowing which agencies can help their business and what they can offer,” said George Cloutier, Founder, Chairman and Chief Executive Officer of American Management Services, a company offering implementation-based, profit-maximization and turnaround services to privately held, small and mid-sized business owners. “The irony is that the owners who had received federal assistance were quite pleased with the results.”

“Small businesses that were devastated by recent hurricanes and did not receive immediate help may have been back in action much sooner if they had understood the process,” continued Cloutier. “Part of the problem is a general lack of knowledge.”

Cloutier said the poll of 438 small businesses in 18 states indicates that the federal government is ineffectual in its ability to build awareness about its small-business assistance programs.

“The poll shows that the federal government has programs that can help small businesses, but the government has been woefully inadequate in making small business owners knowledgeable about these programs,” he said.

Exacerbating the problem are recent reports that federal projects intended to assist small businesses have instead benefited large corporations, including two national firms that received federal contracts in the wake of Hurricane Katrina (Washington Post, October 20, 2005).

The disconnect with federal agencies was contrasted by a strong connection to local government. When asked, which of the following elected officials/branches do you think is the most creative and innovative in helping small businesses, 29% said mayors/local officials, followed by state legislatures (20%), president/executive branch (13%), governors (10%), and Congress (4%).

“Small business owners see mayors and other local officials as their biggest ally. Because of this, they are the key link to helping small businesses reach their true potential,” said Cloutier.

The American Management Services/Suffolk University poll also showed that labor issues are a source of great concern for small business owners. When asked, what is the most significant challenge to your businesses' profitability, 28% said health care costs/employee benefits, 24% indicated finding and retaining qualified employees, and 6% said high employee wages. This combined 58% easily outdistanced low sales volume (11%), taxes (10%), and high raw material costs (9%).

“Overall, this initial poll conducted by American Management Services and Suffolk University revealed data that is vital for the future success of small business owners,” said David Paleologos, Director of the Suffolk University Political Research Center. “We look forward to continuing our polling partnership by conducting a series of these surveys focused on small businesses throughout the year.”

With oil reaching nearly $70 a barrel, the recent energy crisis has had a negative impact on small business owners throughout much of the country. When asked, how the recent energy crisis has affected your business, 76% of small business owners said it had a major or minor negative impact, while 11% indicated that it has a major or minor positive impact. An additional 11% said it had no impact at all, and 2% were undecided.

Interest rates had a much smaller impact on small business owners than energy. When asked, how the increases in interest rates have affected your business, 36% of small business owners said it had a major or minor impact, 4% indicated major or minor positive impact and 55% said that it didn't impact them at all.

“The message is clear about the impact of energy,” said Cloutier. “If by some chance the cost of oil were to reach $100 per barrel, the future for many small businesses would be uncertain.”

When it comes to political parties, Republicans were the choice of small businesses. When asked, which of the two major political parties are more sympathetic to the needs of small business, 41% said “Republican,” 22% “Democrat,” while 27 % indicated “neither.” Yet, when asked, do you feel your business is/was better off economically under the current Bush or Clinton administration, 38% said “Bush,” 36% indicated “Clinton,” and 26% weren't sure.

The Suffolk University poll was conducted from January 9 to January 19, 2006 . The margin of error is +/- 4.53% at a 95% level of confidence. The 468 small business owners were drawn from a Dun & Bradstreet sample of small business owners from 38 states, including the northeast, Midwest and south regions, per Department of Commerce/Census Regional and Gender Quotas.

Suffolk University has posted marginals, charts and 116 pages of cross-tabulation data on its website (www.suffolk.edu). For more information, please contact Suffolk adjunct professor David Paleologos at 781.290.9310.

About American Management Services, Inc.

American Management Services is the leading provider of complete turnaround services to small and mid-sized businesses. Founded in 1986 by George Cloutier, a graduate of Harvard College and Harvard Business School , American Management has worked directly with more than 6,000 business owners across 400 industries to implement the changes necessary to achieve profitability.  In the last twelve months, American Management Services completed 54 successful small business turnarounds and over the past five years, has completed more than 250 successful turnarounds.  American Management Services is a founding and active member of Partner America™, a unique public/private partnership created with the US Conference of Mayors. American Management Services has offices in Orlando and Palm Beach, FL; Waltham, MA; Rochester, NY; and Washington D.C.   For more information, please visit www.amserv.com.

About Suffolk University

Suffolk University , located on Boston 's historic Beacon Hill , with campuses in Madrid, Spain and Dakar, Senegal (Africa), is a comprehensive global institution distinguished by its teaching and the intellectual contributions of its faculty. Suffolk offers a wide range of undergraduate and graduate programs in more than 70 areas of study. Its mission is to provide quality education at a reasonable cost for students of all ages and backgrounds, with strong emphasis on diversity. Suffolk has a combined enrollment of more than 8,300 full-time and part-time students at its Law School, College of Arts and Sciences and Sawyer Business School.

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