Who bails out small businesses?
First it was Bear Stearns, then Fannie and Freddie. The government seems to have bailout boogie fever these days, but no one is asking small businesses to dance.
When a small business owner screws up and their business tanks you know who typically bails them out? The small business owner.
Take Maureen Borzacchiello, who owns trade show products company Creative Display Solutions along with her husband Frank.
Borzachiello's brother-in-law died suddenly in the winter of 2005 when he was 47 years old. The shock of the loss had an impact on her entire family and the business ended up at the brink of failure.
"We hit this wall in June of 2006 when we were out of money," Borzachiello recalled. "I said, 'Oh my God. I'm going to close my business.'"
It's not an unusual story. Small businesses have a high failure rate, and when things go bad there are few options open to entrepreneurs, especially in today's tight credit market.
"The government talks out of both sides of its mouth," Borzacchiello said. "Small businesses make up 84 percent of the businesses in this country, but somehow the top tier gets bailed out. Small businesses can't even get a small business loan there's so much red tape.”
Is the little guy, and gal, getting the shaft?
I recently wrote about how it took the federal government nearly seven years to submit a proposed rule that would help women-owned small businesses get a level playing field when it comes to the federal contracting procurement process. And even after the rule was drafted many small business advocates said it didn't go far enough to help women out.
The government has never reached its goal of giving women business owners at least 5 percent of U.S. procurement dollars. That goal was set by Congress in 1994.
And the Bush administration recently cut funding for the Small Business Administration, the U.S. government agency that provides support to small businesses, by 15 percent for 2009.
So what are small businesses to do? Pull themselves up from their own bootstraps.
And that's just what Borzacchiello did.
She approached her staff of seven at the time and told them about the precarious future they faced. She told them there were mistakes made and there was a cash crunch, and all the workers agreed to scale back their hours until the company was back in the black. She and her husband did not take a salary and the focus was now on building new business, which was lacking in the months following the death of Frank's brother.
"If I was going down, I was going down with a fight," she said. "I basically mapped out a plan of what we needed to do, and Frank and I hit the phones."
She also got business coaching help through American Express OPEN's Make Mine a Million $ Business Program -- it helps bolster women-owned businesses.
"That was pivotal during all this chaos, she explained. "I learned how to sit back and dedicate time for strategy of the business."
As a result, Creative Display Solutions was able to rebound within three months, breaking $1 million in sales for 2006.
When Borzacchiello heard about the bailout of mortgage giants Fannie Mae and Freddie Mac, she was furious. She asks simply: "Where's the accountability?"
At least small business owners seem to know where it is.
