Do you know what the definition of a small business is? By our federal government standards, a small
business is an enterprise with 500 or fewer employees. Honestly?BSBIR
I would love PCDworks to take advantage of some of the new lending and grant programs in the stimulus package but there is not a level playing field in this regard. It is logical that an enterprise of 499 employees would have a disproportionate advantage over a business of 14 employees when competing for the same dollars.
A commitment of a minimum of 100 person-hours is what it takes to write a credible proposal for an SBIR (Small Business Innovation Research) grant. This is a huge percentage (astronomical, actually) of our “billable” talent dedicated to a proposition that has approximately a 10% chance or less of winning an award. Some of the larger “small” businesses have a dedicated person or even whole departments that churn out these SBIR proposals.
Larger “small” business also has the advantage of political connections and clout. They have the extra cash to contribute to political candidates and again, have the cash to dedicate staff just to making and maintaining political connections. They are more visible in every way. These companies are considered large employers in some congressional districts – especially those districts that include rural areas and lower population density.
Navigating the path to understanding the federal programs and the application process is also a huge and time-consuming task. That’s why there are so many consulting groups out there marketing to small business, their knowledge of the federal bureaucracy and how to gain access to small business programs. Again, it takes money to work with a consultant and no guarantees on the return, just a heightened probability of return on investment.
Europe has a much saner small business standard: 50 employees or less. It is past time to re-define small business in the US. I have a feeling that large “small” businesses have a vested interest in keeping their small business status. Again, because of their resources, they have the political clout to make sure the present system works for them.
The most logical answer would be to create subcategories of small business- may be a category called” micro-businesses” with programs dedicated to that subcategory. I am all for fair competition but the “Davids” of the small business world should never have to compete with a Goliath for a share of federal and state program awards.BSBIR