A voice from the SBA: want to start or expand a business? Here are three methods to do that.(ABM Celebrates Small Business in Al

Recently I was visiting with a friend and his wife. Mark owns a thriving business and Juanita is just getting started. Shortly after dinner came the big question, "What can SBA do for me?". I started by explaining that the Small Business Administration helps small-business owners in three major areas: training and counseling, access to capital and government-contracting assistance.

Starting your own business can seem overwhelming at first, but with some careful planning and good advice the process can be made easier. One thing new entrepreneurs should do is evaluate their own knowledge gaps and fill those in. You may be the best welder in town, but if you don't understand the cash flow of your business, you may soon be the poorest welder in town.

In addition to training and counseling given by the SBA, we have three training partners who can provide you with expert guidance.

TRAINING AND COUNSELING

SCORE, counselors to America's small business, is a national network of volunteer business counselors who can provide startup assistance, and in many cases offer industry-specific advice.

The Women's Business Center program specializes in helping women to start and grow their own businesses. Women's business centers provide assistance and support customized to the way women think, learn and do business, as well as provide opportunities to network with other women business owners.

In Alaska, our largest partner is the Small Business Development Center network. The SBDC provides counseling and training on a wide range of topics, such as starting a small business and business planning, to how to use Quickbooks or how to take your business to the next level. They also offer training online for your convenience. The SBDC's Rural Development program sends a counselor to Bush Alaska regularly to counsel and conduct classes in various business-related topics.

SBA resource partners can take you from contemplating the viability of a business idea through such complex issues as financing, franchising and expansion to developing an exit strategy so you can retire and the business can continue.

What about the money? Whether you need startup funding, additional working capital, or money to buy your own business premises, money always seems to be an issue with small businesses. The SBA is actually a loan guarantor as opposed to a direct lender. Because of this, the first stop, after preparing your business plan and a proposal, is your lender. I always recommend starting where you currently bank; you already have a relationship with them and your lender is one of your businesses strongest allies. SBA loan-guarantees have no minimum amount. Maximum amounts for SBA guarantees vary with programs and the purpose of the loan.

ACCESS TO CAPITAL

The SBA Express and Community Express programs are designed for loans up to $250,000 that are generally straightforward transactions. With expedited processing procedures, a reply from SBA could come in as little as 24 hours. More complex loans may require the use of the 7(a) program; these loans can go up to $2 million in some circumstances and can be used for a variety of purposes, including inventory, equipment purchase or working capital.

If you're looking to build or purchase your own building, the 504 program may be just what you need. The 504 program not only enhances cash flow with extended terms, but could allow for as little as 10 percent down for the borrower. With SBA's loan-guarantee programs, the borrower generally gets more favorable terms, and the bank receives additional security on the amount loaned.

Talk of SBA's training and lending programs piqued Juanita's interest, but Mark wanted to know how SBA could help his firm. For some time, he had been trying to break into government contracting.

GOVERNMENT-CONTRACTING ASSISTANCE

The federal government purchases billions of dollars in goods and services each year that range from paperclips to complex space vehicles. To ensure that small businesses get their fair share, the SBA negotiates annual procurement preference goals with each federal agency and reviews each agency's results. The statutory goals are as follows:

* 23 percent of prime contracts for small businesses;

* 5 percent of prime and subcontracts for small disadvantaged businesses;

* 5 percent of prime and subcontracts for women-owned small businesses;

* 3 percent of prime and subcontracts for Hubzone businesses; and ...

* 3 percent of prime and subcontracts for service-disabled veteran-owned small businesses.

To help reach these goals, the SBA has established three certification programs to assist federal-contracting officers in locating qualified small businesses.

The first and probably most widely known as the section 8(a) program, a business development program designed to assist socially and economically disadvantaged small businesses achieve stability. Through its nine-year tenure in the program, company executives receive training, advice and assistance from SBA. They are also encouraged to form joint ventures with other firms, or to become a protege of a larger more experienced firm.

The Small Disadvantaged Business, or SDB program, differs from the 8(a) program not just in eligibility requirements. There is no term limit in the SDB program as long as the business remains small for its industry.

The HUBZone program is designed to channel federal contracting dollars toward firms in and historically underutilized business zones. HUBZones are areas with high unemployment, or low average income. Not only must the business to be located in a HUBZone, but 35 percent of employees must live in a HUBZone as well. The HUBZone program takes advantage of the multiplier effect as a means to economic development.

None of these programs guarantee one will obtain a contract, but they do have the effect of reducing the eligible competitive pool.

Helping you get your business started, or growing your business, is only part of what SBA does. SBA's advocacy office looks out for the best interests of small business by being an advocate and modeling legislation. Recently passed regulatory fairness regulations in several states, including Alaska, are based on model legislation from the SBA office of advocacy.

What can SBA do for you? SBA is America's small-business resource. If you have any questions in your business life, we can help you find the answers because that's what we do. We help others achieve the American dream, but the real work is up to you.

Sam J. Dickey is the deputy district director, U.S. Small Business Administration Alaska District Office, and is responsible for the delivery of all SBA programs and services.

Dickey has been with the SBA since 1988. He has 24 years experience in the computer industry ranging from mainframe programming to network management to PC assembly and repair.

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