Small businesses around the country are doing better now than ever before, and the new century promises to bring about greater success, according to one official.
“I’m seeing this as one of the best times,” said Fred P. Hochberg, deputy administrator for the U.S. Small Business Administration.
Hochberg was in San Diego last week to speak at the National Association of Governmental Guaranteed Lenders, Inc., and spoke with the San Diego Business Journal about what his opinions on the status of American small business.
“The economy has made this a very robust time, and we’re finding that more and more people are starting their own businesses and bankruptcies are plunging,” he said.
“E-commerce is proving to be a great equalizer. For many businesses, it can be a way of opening markets in ways that are unforeseen.”
But he warned that business cannot take off without first addressing the needs of the general population who want to share in that success.
When asked about the biggest challenges the SBA faces as it heads into the new millennium, Hochberg said it’s ensuring that minorities have equal chances to start their own businesses.
“By the year 2050, there will be no single majority in this country, and by 2003, Hispanics will make up the largest group , and that’s not in the Southwest, it’s in Atlanta.
“That presents a tremendous challenge to our country. If our diversity isn’t matched by economic success in all areas of this society, then we are not going to succeed as a country.”
In fiscal 1999, almost 28 percent of all SBA loans dollars went to minority borrowers , more than has even been awarded in the group’s 46-year history.
“The other challenge is that people don’t know what we (the SBA) do. Today, 75 percent of all loans done through the SBA are done by the private sector. The only way some people know who we are is when they sign the final paperwork,” he said.
“That transparency is good because it shows us the ease of operations, but it’s bad because people don’t know the SBA can help them.”
The SBA has helped a number of people this year in San Diego and around the country.
According to Hochberg, more than $12 billion in loans were approved during fiscal year 1999 (October 1998-September 1999), with more than $250 million of that for San Diego businesses.
In the past six years, the SBA has backed more than $71 billion in loans to small businesses, more than the previous 25 years combined.
Small Business Development Centers have provided counseling and training to more than 600,000 entrepreneurs in the past year, and when that figure is combined with the counseling provided by the Service Corps of Retired Executives, the number tops one million.
The SBA has opened 25 new women’s business centers across the country, as well as 30 Business Information Centers.
Their Web site (www.sba.gov) is available in English, Spanish and Russian and gets more than seven million hits a week.
“This has really been a record year for the SBA,” Hochberg said.
“We’re reaching out to communities that haven’t participated in this economic boom, and we’re bringing in people and organizations that might not be aware of what we offer.”
One of the most striking things Hochberg has noticed as he travels around the country is a shift in attitude from what will be tomorrow’s business owners.
“We’re finding that about 70 percent of high school students would rather start their own business than inherit money,” he said. “This is a remarkable change in attitude, an absolutely remarkable change.”
Hochberg is the former president and CEO of Lillian Vernon Corp. and the founder of an investment firm in New York City. He has a bachelor’s degree from New York University and an MBA from Columbia University.