Anyone who has ever owned, been employed by or been closely associated with a small business understands the difficulties in starting and maintaining such a venture.
Can it turn a profit? How can it expand if all the money it earns must be used to keep it afloat? How can it keep employees if it can't pay them more? How long will its owners have to give up their time off to make sure it's running well? How does it get the word out if there is no budget for advertising? Can it get a loan to expand?
Chattanooga Mayor Andy Berke has an answer for that last question and probably could link up said entrepreneurs with folks who could help with answers to the other queries.
He unveiled the new Neighborhood Reinvestment Fund Monday, saying existing small businesses would be eligible for loans of up to $25,000 for the likes of facility renovations, equipment and inventory acquisition, and website development and marketing.
Small business loans at banks, depending on the circumstances, can be hard to come by. But the new program not only offers a loan, but it does two things we especially like. It requires the business owner to match a portion of the loan amount, and it directs the owner to work with small business coaches like those at SCORE, the Company Lab and the Tennessee Small Business Development Center.
"Local businesses need some skin in the game," Berke said.
Without it, businesses might be more apt to fold their tent if times got tough.
And the coaches might have a few ideas to keep the times from getting tough.
For example, Patricia Wente, chapter chairwoman of SCORE (Service Corps of Retired Executives), said its coaches would go through the company's business plan, signing off on it to give it the organization's imprimatur.
However, Berke said, the new fund is not for foundering companies looking to be propped up.
It "isn't a life saver," he said. "This is about investing in a proven business that has a business plan."
If the City Council approves the Neighborhood Reinvestment Fund, the mayor said he expects 10 to 12 businesses to take advantage of it in its first year.
Berke said Monday when he first took office in 2013 that small business owners believed any local assistance from the city only went to large corporations or industries.
However, Times Free Press archives show the mayor and the Chattanooga City Council have tried to be proactive with a number of grant programs to assist such businesses.
Perhaps the most widely used one is the Small Business Incentive Grant Program, which as of last August had awarded 24 businesses an average of $2,400 since it began in 2015.
That program awarded businesses with 100 or fewer employees $500 per hired employee if it added five or more full-time employees over a 12-month period. In its first fiscal year, it awarded seven companies $37,579 for creating 76 jobs.
One of those businesses was Bellhops, a technology-enabled moving company then less than four years old, which, according to its website, now is approaching its 200,000th move.
To spur additional growth, the city council doubled the program's per-new employee grant to $1,000 last August.
At the same time it did that, it also broadened the parameters for Berke's Innovation District Jobs Grant program, which hadn't been as successful. Launched in February 2016, it would award companies within the 140-acre downtown Innovation District $250 per new employee if it hired 25 or more full-time employees.
Since few business had applied for that program, the council reduced the employees who needed to be hired to 10, raised the incentive from $250 to $1,000 per job, and made the grant available across the city instead of just in the Innovation District.
Over the years since Berke has been in office, the city has been ranked high and not so high in various categories relating to small business success. While the finance website SmartAsset ranked it the cheapest city in which to start a small business in 2018 and finance website WalletHub said only Nashville ranked ahead of Chattanooga in cities in the country for women-owned businesses, WalletHub ranked the city 92nd out of the top 150 best places to start a business in 2017.
Starting and maintaining a small business is no picnic in any economy. It's a risk with the potential for many rewards, but it's not for the faint-hearted.
Warren E. Logan Jr, president and CEO of the local Urban League, put it this way at the 2016 Entrepreneur Power Luncheon: "Anybody who is successful running a small business deserves our congratulations. We talk about it being sexy, but nobody talks about no annual leave, no sick leave. Nobody talks about working 12 hours a day, and that oftentimes, everybody gets paid but the owner."
The Neighborhood Reinvestment Fund may not be able to alleviate all of those challenges, but it could give worthy and invested small businesses a boost. We hope the city council will give it serious consideration.