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Small Business Fuels the Economy

Written by: David Banfield

Article Overview: On a global basis the news continues to be gloom and doom on the economic front. Major corporations around the world continue to downsize or right-size as they attempt to move towards profitability. Jobs are disappearing at an alarming rate. Along with the jobs go the economic benefits of full employment. There is, however, a brighter side to this economic picture. This can be found in the area of small business.

Small Business Fuels the Economy

On a global basis the news continues to be of personnel cuts, staff reductions, lay-offs and so on. This news comes from major corporations around the world as they seek to downsize or right-size in a move towards profitability. Jobs are disappearing at an alarming rate. Along with the jobs go the economic benefits of full employment.

There is, however, a brighter side to this economic picture. This can be found in the area of small business. As the major corporations of the world continue their downward spiral there is a corresponding upward spiral of new business enterprises. Small business is the most overlooked and under-assisted area of many national economies.

In all well developed countries government, at many levels, has established well-funded programmes to assist with business growth and job creation. Invariably, however, these programmes are all geared toward major corporations already employing thousands of people. In many instances these are corporations that least need any form of government assistance to ensure their continued growth.

At the other end of the scale we find thousands of small businesses that are growing at a substantial pace with virtually little or no outside assistance. These are the companies that are creating the jobs albeit one at a time. We never read about small business and their hiring achievements simply because it isn’t news on a company by company basis. However, once we look at the combined mass of small business we find that collectively they are an integral and essential part of any national economy. They collectively create more jobs than all of the major corporations around the world combined.

The banking world generally shuns small business enterprises as being under capitalized and generally speaking ‘too small’ or ‘too new’ to command a place in their financing programme. Therefore, small businesses have to exist on their own resources. This often means that the next growth plateau is just out of reach for the majority of them, and they become the victims of their own success. The lack of short-term working capital continually hampers their growth opportunities.

Finding a funding source to work with small business is indeed a substantial project. In the North American marketplace the above scenario is very common with banks, factors and invoice discounters all gravitating towards the larger up-scale transactions. The same of course is true in the European marketplace. The difference might be that there is a network of invoice discounters in the United States and Canada that especially look for small business transactions.

This group has been servicing the North American marketplace for years and has been responsible for the growth of hundreds of businesses that would probably not be in business today without the services of invoice discounters, who offer a cost-effective way of providing short-term working capital that can stimulate the growth opportunities of even very early stage growth companies.

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Article Tags: alarming rate, brighter side, business growth, company basis, downward spiral, economic benefits, form of government, full employment, global basis, government assistance, job creation, national economies, national economy, new business enterprises, own resources, personnel cuts, small business enterprises, staff reductions, t news, upward spiral



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