Smithfield, explains apple picking
to a group of children.
While small businesses benefited in the area from the economic expansion, an air of uncertainty lingered over the rising cost of health care and health care insurance.
As the economy slows, health care concerns will certainly become an even bigger concern for the area’s — and the nation’s — small businesses.
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According to Don Saracen, regional representative of the Smaller Business Association
of New England, which has about 1,500 member businesses in New England, the cost
of health care has been a top priority for many of the area’s businesses in 2000
— it’s a trend he expects to continue.
“It’s a very large problem nationally, and I think there is a keen interest by everyone involved locally including the state (Rhode Island),” Saracen said. “There is still more that is unknown, than is known when it comes to health care. There is definitely a message that people are interested in seeing this coming to a conclusion, but how it’s going to work out is still not flushed out.”
An economic boom has also left many of the state’s small businesses looking for a qualified workforce all year. With the state’s unemployment rate hovering under four percent all year long, the search for qualified workers has been difficult. It has forced many of the state’s small business owners to offer training classes, on-site seminars, and flextime for employees to take classes.
For example, when Henry R. Kates, president and chief executive officer at Hunting
Custom Packaging took over the company last year, 90 percent of its staff spoke
only Spanish. Unlike other companies that offer English as a Second Language classes,
Kates decided to train company supervisors in Spanish — a decision he thought
was best for the company as a whole.
“In low tech manufacturing like this, the workforce is very transient,” he said in a previous interview with the Providence Business News. “From a pragmatic standpoint we decided to make an investment in those employees that we knew would stay.”
But the challenge of finding new workers isn’t deterring the state’s small businesses from expanding or new businesses from opening. In 2000, the Rhode Island District Office of the Small Business Administration increased its loan volume to state businesses by 17 percent, guaranteeing more than 751 loans, which resulted in more than $96 million being pumped into the state’s economy. The state office set records in the number of “New Market” loans by increasing 12 percent in loans to minority business owners, 19 percent in loans to veterans, and 18 percent in loans to women business owners.
“The Rhode Island office continues to be the leader in proving access to capital for small business,” said Mark Hayward S. Hayward, director of SBA Rhode Island office in a previous interview. “Nearly 44 percent of the SBA loans guaranteed in Rhode Island are to the markets that need it most and this is particularly satisfying.”
With the number of small businesses in the state growing, so too is the number of organizations that aid these businesses. In the last year a new Hispanic Chamber of Commerce was formed, a new Women’s Center for Enterprise opened in Providence, and BusinessFirst, a new service offering companies prompt, accurate, free or low-cost business information opened its phone lines.
And though technology has made an impact on many businesses, a study released earlier this year by the National Association of Independent Businesses said only one in six small business had a “formal presence” on the Internet.
Still, the “Second Annual Small Business Internet Survey” found the number of small businesses that established a Web site to advertise or promote their business has increased 123 percent in 2000. Conversely, the study found the number of small businesses establishing a Web site primarily to sell products decreased 48 percent during the same period.
But it’s still unclear what the next year will bring for small business owners — and according to Saracen, the first few months set the pace.
“There are so many factors right now affecting what could happen — the month-long debate over a president, the fluctuating stock market,” he said. “Who knows what the future will bring, but we are all still very positive.”
