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SME'S - is government spending good for them
| Guest post by: Dr. Rob Smorfitt |
Article Overview: A look at the use of government spending to create SME'S
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Free Download - SMEs – SMEs struggling in South Africa. Why? By Dr. Rob Smorfitt |
SME'S - is government spending good for them
I see it happening all the time. Governments issue edicts, laws and regulations, attempting to force their internal purchasing departments to support SMME's.
One of two things occurs. Firstly they attempt to set a financial limit, without any thought in to how the amount is derived. Secondly they take the tried and trusted, gardening, security and cleaning services and give these out. None of these are likely to make a meaningful contribution to GDP growth, albeit a great starting point. The problem is that it is seldom taken beyond this point.
A thorough analysis is required of what is purchased. The value is initially irrelevant. What is more important is whether the SME's have the necessary skills. Too often they do not have the skills, and this leads to delivery failure and the enhancement of the "SME's are bad suppliers" theory.
Careful analysis of the governments purchasing needs to be made and then suitable SME's sought to provide these goods and services. Thereafter, it is necessary to match this skills base to large private enterprise purchasers as well, and to expand the market for the SME's beyond just government. These SME's need to create sound sustainable businesses, and this requires ongoing business from multiple sources.
Government need to understand this and look at this task which is currently treated in a poor manner, in a more serious manner.
Rob Smorfitt
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Article Tags: entrepreneur, entrepreneurship, government intervention, government spending, SME, SMME, Smorfitt
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About the Author: Dr. Rob Smorfitt RSS for Dr. Rob's articles - Visit Dr. Rob's website Have an MBA and a PhD in entrepreneurship. Three key areas of ongoing research are entrepreneurship and innovation in large business strategy, the impact of legislation on SME development and SME finance. Run my own SME blog at http://sme-smb-smme.blogspot.com as well as an entrepreneurship and innovation for large businesses blog at http://innoveur.blogspot.com I have been self-employed since 1982. I have started or purchased in excess of 50 businesses since then. Most were sold again and a few were shut down because of a lack of profitability. Many were run by staff or family while I worked full time in my bigger businesses. Author of 6 books. Written articles for various magazines, newspapers and websites. Experienced in research within developing countries.
Click here to visit Dr. Rob's website  
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Re: Are You Complying with the FTC?
- Hi Jeff,
Here's the problem. It goes beyond "regulation." They're flat-out telling us what we can and can't do with OUR businesses. This is no different than the U.S. government telling banks and private financial institutions that they HAVE to lend money to people that the government knows full well they will never be able to pay that money back. And, they did this because they felt that the banks were discriminating against these people. Are you kidding me??
That's why we're in the mess we're in. You can thank our wonderful government. So, now we have them telling us how to run our online businesses. It's not a big issue, and it's not a huge deal to me. But, once they get a foot in the door, they'll eventually get both feet in. Before you know it they'll have full control over e-commerce and OUR businesses. Don't think it can't happen.
Government already runs the banks and automotive industry. They'll eventually be running the internet.
The government needs to stay out of business and let free enterprise reign. Whatever happens, happens. But, there's no reason for the government to step in and take over when it's not their place to do so, all because they hate to see big companies go under. Hey, it's the companies fault, so why do we need to bail them out of their mess? Oh... because the government caused the mess in the first place and now they need to "fix" it.
Okay, my rant is over. I hope you see now what kind of affect this can lead to in the future. This is just one small stepping stone into a bigger plot.
I also know that the FTC isn't actually tied in to the government, per se, but don't think that doesn't matter.
re: restaurant start-up
- I'm not sure about government grants for restaurants, but my recommendation would be to approach a lender that offers loans under the Canadian Small Business Financing Loan program where the government will guarantee 85% of the loan. You can borrow up to $250,000 to finance equipment and renovations under this program. Restaurants are very risky business, however some of the Chartered Banks will look at restaurants if there is enough of an initial equity investment and you have a solid business plan (experienced management team, good concept and strategic location).
Women Owned Businesses
- It would be good if the government did more things to help businesses owned by women. But, being in the construction industry I have met many people who put the majority portion of their business in their wife's name in order to qualify for government contracts. However, that can be a problem when the relationship falls apart and the wife actually wants to be compensated for being the "owner".
I do have to disagree with the comment in the blog that all furniture is manufactured oversees. There are a number of furniture companies right here in Virginia and the largest furniture show in the world is held in North Carolina.
Chris
Government funding
- Thanks for the link - it's always good to get some government funding!
grants for restaurants
- Well friend
I don’t have any idea about government grants for restaurants, but I will recommend that you may try on some banks who offer loans for small business where the government will have some guarantee.
Beside that Restaurants business is very risky so some of banks who gave some Financing Loans they will look at on it if there is enough solid business plans.
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