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efforts must set businesses up for success, not overburden
and stress them. As has already been stated, the
focus of the City and local support organizations must be
to attract unique and diverse small businesses to Main
Street and the downtown area.
Entrepreneurs face a daunting task when opening a new
venture and the City must be sensitive to their needs.
According to the Small Business Administration, 50% of
all small businesses fail within the first five years. The
City must strive to improve these odds by enacting
Table 2-3: Top Eight Reasons for Small
Business Failure
1. Lack of experience
2. Insufficient capital
3. Poor location
4. Poor inventory management
5. Over-investment in fixed assets
6. Poor credit arrangements
7. Personal use of business funds
8. Unexpected growth
legislation and providing information that can help businesses avoid common mistakes. The top
eight reasons for small business failure, as described by Michael Ames in his book Small
Business Management, are listed in Table 2–3. Obviously the majority of these issues are under
the complete control of the individual small business owner. However, the City and local support
organizations can take steps to help small business owners overcome these obstacles.
LOCAL SUPPORT
As can be seen in Table 2–3, insufficient capital and poor credit arrangements are often the cause
of small business failure. Waltham possesses a savings and loan institution named Bay Colony
Development Corporation. Bay Colony specializes in Small Business Association 504 loans,
which are only issued to small businesses with yearly net profits of less than $5,000,000. The
504 loan is a long-term, fixed rate financing tool designed to encourage economic development
through the acquisition of major fixed assets for expansion or modernization. These loan funds
may be used for such projects as purchasing or renovating land or existing buildings, purchasing
improvements such as street lighting, utilities, parking lots, and landscaping, and purchasing
long-term machinery and equipment. Because the average for-profit business in the downtown
area does not have tangible net worth in excess of $7.5 million and does not have an average net
income in excess of $2.5 million, the majority of businesses would qualify. Directing local
business owners to this useful service may help them attain capital, especially in the current
economic climate. Disseminating information on 504 loans, like that featured in Table 2–4, will
encourage business to use this valuable local resource.
The Small Business Association of New England (SBANE) is a non-profit organization designed
to ―provide a legislative voice for small business at the state and federal levels and to make
practical information available to help business owners grow their companies‖ 6 . Using this
support, Main Street business owners could modify legislation, creating laws that encourage
growth. SBANE also has monthly meetings that are held in Waltham, making it very convenient
for local business owners to attend.
6 From: www.sbane.org
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