Introduction
The vast majority of the business transactions that take place all over the world are
conducted by and between small business enterprises. If you look at the proportion
of trade contributed by the small business owners it becomes clear that the small
business owner has a big role to play in the overall economy. Many of the small
business that exist around the country are mostly convenience stores, gas stations,
restaurants and things like laundry mats. The administration of small business is
something which governments have sought to improve so that the overall economy
can become more efficient. People who are involved in small business administration
need realise that some of the skill involved in this work are not common sense and
require training.
History
In the United States the federal government has set up an agency which helps and
promotes the interests of small business administration. The agency is known as the
Small Business Administration (SBA) and was founded 1953 under the Eisenhower
presidency. One of the functions of the SBA is to help small business administration
through easy loans. If a small business owner becomes a victim of a natural disaster
the SBA can help out the administration small business by providing emergency loans
to help the administration of the small business to get back on their feet and start
conducting business once again. Interesting the pro-business Republican party has
tried several times to end the SBA through legislation but so far they have failed.
Features
It is important for all people involved in small business administration is that the
SBA does not provide direct loans but works with commercial banks to ensure that
the small business owner gets a loan by providing a guarantee for part of the loan. In
essence the SBA reduces the amount of collateral that the small business owner has to
show to the bank. The only circumstances under which the SBA gives loans directly
to the owners of small business is in the event of disaster. In such circumstances the
SBA is allowed to offer loans to small business administration under its Disaster
Relief Loan programme.
Tips and comments
It important for small business owners to be aware of the different benefits and
protection they can receive from the Small Business Administration agency.
Administration small business needs to remember the reasons why many small
businesses fail. The biggest reason that many small business fail is that there a lack
of experience on the part of the small owner and so after a short period of time the
business closes. Most small businesses in the United States will fail within the first
2 or 3 years. If a small business enterprise is still running after the 3rd year then it
remain successful in the long run. Another very common mistake with small business
owners who are inexperienced in business administration use too much of the
businesses money for personal expenses which can in some cases cause the business
to fail. It is important to remember that the most successful small businesses are those
that good credit arrangements.
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