While Washington debates how to help the country’s struggling small businesses, states and municipalities have stepped up with an array of initiatives to stanch closings and save jobs.
The local approaches are as varied as subsidizing wages for new hires, running a $100,000 regional business-plan competition and giving out grants to help small manufacturers reposition themselves. Some states and cities are using federal stimulus dollars, and others are mixing federal, state and private dollars.
Here are some examples:
A 100 Percent Hiring Subsidy
San Francisco is using federal stimulus funds to give immediate aid to small-business owners. Its $25 million program reimburses owners for 100 percent of the wages for certain new hires. So far, restaurants, cafes, delivery services and even law firms have hired nearly 1,800 people through the program, called Jobs Now.
Employers do have to pay for Social Security and unemployment insurance, and the program requires those hired to have been unemployed for 30 days or longer. More than 800 businesses have signed up for the program, and the city is pushing to extend it beyond its September expiration.
At first, said Steven B. Falk, chief executive of the San Francisco Chamber of Commerce, “businesses had to warm up to the idea of turning to the government for hiring. Now, small businesses are telling me this is the motivation that pushed them to hire.”
Encouraging Customer Loyalty
A Cleveland-area small-business council is trying to shore up its 17,000 member businesses with a program that encourages consumers to patronize locally owned enterprises instead of big-box chains or Internet sites.
Last year, the Council of Smaller Enterprises began a Web site called “I Buy NEO” — that’s Northeast Ohio — where consumers can search for discounts and bargains at participating local businesses. So far, about 300 businesses as diverse as art galleries and home-improvement stores have signed up to offer rebates or discounts. About 11,000 cards, which cost $10, have been sold. “When a resident buys locally,” said Dan Roman, the council’s director, “independent studies have found 68 cents of each dollar stays in the community.” The current average for the region is 43 cents.
There is no charge for small businesses to join, and about two dozen companies have been signing up each month. Even though the program’s $150,000 budget for marketing, Web development, printing and postage is modest, Mr. Roman says, sales activity tied to the loyalty cards has increased 40 percent over the last six months.
Training for Laid-Off Workers
Last June, the Michigan Small Business and Technology Center began to train laid-off workers to start new ventures.
So far, 527 people have taken the course, which the center offers in partnership with the Ewing Marion Kauffman Foundation. To date, 160 people in the Michigan program have introduced new business ventures, and more than 125 owners of existing businesses have enrolled in separate courses to bolster their chances of surviving. Another 1,000 would-be entrepreneurs are expected to complete the program this year.