January 29, 2009

By Jackie Alexander DiPofi, Ph.D., Director of the Small Business Development Center, Auburn University

And Associate State Director of the Alabama Small Business Development Consortium

Access to capital is the biggest need of small businesses during the best of times. During the worst of times, such as we are experiencing right now, access to capital may determine survival right now. As the dismal results of 2008 are realized in year-end reports, 2009 is looming, promising bleaker days ahead. Hundreds, thousands of Alabama businesses are suffering and many of them will close in the coming days. Therefore, I recommend to President Obama and Congress to establish an Emergency Small Business Bridge Loan, where local area banks participate to stimulate economy on Main Street. Benefits to the small business owner are loans for working capital or refinancing current debt at lower interest rates and extending loan periods to reduce monthly payments and ease cash flow requirements. As a potential control mechanism and a measure of management capabilities, reduced credit standards for companies over 2, 5, 7, 10, etc., years old, based on prior results of the business during better economic times, could be a consideration. This Emergency Small Business Bridge Loan is designed to accommodate survival over the next four years. In the short run, millions of dollars are needed to implement an Emergency Small Business Bridge Loan, but these funds are a long term investment in the people who build this country and make it great, one small business at a time. Even when darkness seeps in, there is a bright future ahead because entrepreneurs do not give up. But, sometimes a helping hand is needed by even the best and brightest. That time is now and the President and Congress should extend that hand with an Emergency Small Business Bridge Loan.

The second biggest need of small businesses right now is Emergency Small Business Survival Training. There are things that small business owners can do to increase their chances of survival. Small business owners should be offered, in the immediate future, an intensely direct, "What you can do right now" training. Sitting around worrying will not fix the problem. But, being proactive, and developing a plan for improving the business during slow times to prepare for better times can ease the pain of a downturn. Business owners should brace themselves, take stock, then focus on things like improving their accounting system, learning how to do marketing on the internet, cross training employees, etc. Keeping busy working on improving the business is key to being prepared for the future. The Alabama Small Business Development Consortium is prepared to immediately implement this recommended Emergency Small Business Survival Training across the state of Alabama, as well as offer it as a model for all Small Business Development Centers in the nation to replicate on Main Streets throughout the country. I recommend that the President and Congress support the immediate implementation of this Emergency Small Business Survival Training by committing twenty-five million dollars to the Alabama Small Business Development Consortium ($25,000,000), a relatively small amount compared to what is at risk.

The third thing that is needed right now is also critical. Often it is during difficult and trying times that true entrepreneurs exude creativity and innovation. The old expression, "necessity is the mother of invention" is never truer than during hard economic times. Entrepreneurs recognize new needs of their friends, neighbors and the world at large at times like these, and they take the risks necessary to pursue developing products and services to fill these needs. Industry is born, transactions take place, profits are made and society benefits. This third point is an important step in the business cycle. Therefore, I recommend that the President and Congress support the immediate implementation of Emergency Small Business Product Development Training to nurture creativity and innovations. The Alabama Small Business Development Consortium is prepared to implement this recommendation across the State of Alabama, as well as offer it as a model for all Small Business Development Centers in the nation to replicate on Main Streets throughout the country. I recommend that the President and Congress support the immediate implementation of this Emergency Small Business Product Development Training by committing twenty-five million dollars to the Alabama Small Business Development Consortium ($25,000,000), again, a relatively small amount compared to what is at risk.

The quick action of President Obama and Congress is needed to put this Emergency Small Business Relief plan on the fast track and provide relief now for small businesses nationwide. I call on all public servants, and the rich and powerful, to rise to the challenge and join forces to promote and preserve America's small businesses.

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The Alabama Small Business Development Consortium is an accredited member of the Association of Small Business Development Centers.

The SBDC is partially funded by the U. S. Small Business Administration. SBA's funding is not an endorsement of any products, opinion, or services. SBA funded programs are extended to the public on nondiscriminatory basis.

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Dr. DiPofi is a business expert with nearly 40 years work experience. She has an established network of relationships from which she pulls resources and support. She is a proven leader and team builder working on the front lines everyday to assist small business owners. She is trusted by small business owners who witness her passion for her work and her sincerity in her advice. She communicates in a tell-it-like-it-is manner, yet offers compassion severely needed in counseling individuals facing crisis. She offers hope and positive reinforcement needed for business turnaround. Dr. DiPofi earned her Bachelors' degree (1979) and her Masters in Business Administration (1988) from The University of Alabama and her Ph.D. in Management (2003) from Auburn University.

Also, Dr. DiPofi serves as President of the Greater Peace Community Development Corporation, a not- for-profit organization providing youth leadership, affordable child care and affordable housing in Lee County, Alabama.

Contact Dr. DiPofi at dipofja@auburn.edu, 334-844-4220, or 108 Lowder Building, College of Business, Auburn University, AL 36849.