As the economy continues to remain in neutral gear with millions of people still unemployed, companies unwilling to speed up hiring, and small businesses still unable to get the assistance they need in order to expand and hire more employers, it’s no wonder people are fed up and feel like they’ve run out of options.
For many small business owners, there is a need and want to continue growing their company even further than they can take it on their own and with the lack of support, it can be frustrating on how it’s possible to meet their consumers demand.
But something positive has just turned the corner for small businesses, especially in Los Angeles where everything that relates to jobs seems to move as slow as the 405 Freeway in rush hour traffic, that will help make that economy drive a little faster.
UBS, Switzerland’s biggest bank, has created a program for established small businesses owners to be paired up with financial advisors and business experts for the opportunity to receive help in order to grow their business.
The program has come at the right time for Alicia Estrada, a fashion designer, who has been running her own clothing line Stop Staring for 14 years, but has been unable to expand the business until she became a part of the UBS program.
“I didn’t really know a lot about UBS before this, who they were, what they did and what they were about, but I feel like the program is a really good idea,” said Estrada.
“It’s teaching business owners how to fish, instead of just giving them a fish.”
Estrada is just one of 10 Los Angeles entrepreneurs participating in the program by connecting with mentors and helping to finance expanding their business.
Business owners need all the help they can get to expand in order to fuel the growth the economy and the program has come at just the right time.
There are similar programs already in place for L.A. business owners run by financial groups such as Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co., Bank of America Corp., and Wells Fargo & Co.
For instance, Citigroup has worked on a program to train local minority–owned real estate entrepreneurs with the city of L.A. and the Los Angeles Housing Department for 25 housing contracts, but in Chase’s Mission Small Business program, entrepreneurs use social media to compete for 12 $250,000 grants.
Goldman Sachs is looking for businesses with a three–year track record and at least $2 million in revenue to participate in a five–year commitment for a training program partnered with Los Angeles Mayor Antonio Villaraigosa’s office.
“These programs are helpful, but they’re really a drop in the bucket overall in terms of what these small businesses need,” said John Paglia, a finance professor at Pepperdine University.
One of the biggest hurdles for small businesses when it comes to growing their company to the next level and beyond is lack of financial literacy – meaning there’s not enough information or understanding on what steps a small business should take to reach the next phase.
According to a report published by the National Federation of Independent Business, a nonprofit lobbying group, many small businesses feel negative towards the economic outlook and only 7% of those entrepreneurs feel like it’s a good idea to expand.
But a BoA survey learned only 29% of small businesses plan to hire more workers within in the next 12 months and only 1 in 4 Los Angeles small business felt the economy would improve in the next year.
Basically, confidence in the growth of the economy for small businesses is divided.
While many small businesses will want to participate in the program, it’s mainly geared towards already–established businesses – not start–ups.
It’s hard for small businesses to get access to financing because many don’t have enough revenue to expand making it very difficult for the company even to continue maintaining it in their present circumstances.
But some experts caution the programs’ overall effectiveness especially since the Occupy Wall Street protests basically accused banks of forgetting about the middle class and poor, but continue to cater to the nations top 1% of earners.
Whatever the case may be for small businesses, it’s encouraging for a minimal percentage to even get the help they need for expansion.
Some help is better than none in order to move mountains, baby steps need to be taken and that’s just what is being done for some Los Angeles entrepreneurs.