Hoping to better understand the issues plaguing small business owners, Leonard Tannenbaum, CEO of Fifth Street Finance Corp., recently held a series of events around the state, where he said business owners raised issues ranging from market uncertainty to the cost of relocating.
In conversations with the Business Journal, Tannenbaum said the keys to helping businesses grow are, among other things, eliminating government red tape and increasing awareness of business development programs.
Earlier this year Tannenbaum formed his own political action committee, Keeping America Competitive, to further promote his overall goal of growing small- and middle-market businesses.
The following are excerpts from a conversation with Tannenbaum:
FCBJ: What are the key factors business owners say are preventing business growth?
Tannenbaum: “Based on conversations with Connecticut”™s small business owners, the top three issues that concern them and potentially can slow growth are uncertainty in the economy, government regulation and red tape, and a lack of skilled employees to drive their business forward. Not far behind, taxes and health care costs are also a concern as costs continue to rise across the board to run a successful business.”
What are businesses”™ biggest concerns when it comes to securing capital?
“The biggest concerns business owners face when securing capital are high interest rates and government red tape. Small business owners often need to secure capital quickly for the everyday needs of their business. However, government red tape can slow the process. A delay in the financing process can make a huge difference to a small business owner who needs capital now.”
For businesses that do successfully secure capital, what qualities separate them from the rest?
“Businesses with the ability to repay their loans, deploy their own personal equity to invest in their business and those that have a proven track record in operating a business will be able to secure financing. Those qualities will also help them to succeed as a business in the future and continue to secure financing as they grow.”
You”™ve mentioned the issue of government red tape. How can businesses work through it?
“The state of Connecticut currently has a program in place allowing business owners to receive a tax credit for hiring individuals in certain designated groups who have been unemployed for a certain period of time. However, given that it takes multiple government employees to process a claim, which can take time, the question begs, is it really worth it? In addition, once hired, a claim can”™t be submitted retroactively making this process very inefficient for business owners. While the idea is good, really a cost benefit analysis should be completed to find better way to run programs of this nature.
Ultimately, small business owners in Connecticut today are in need of guidance and advice on best practices for their companies. There are, in fact, many more resources available to them than they realize, such as the Connecticut Business & Industry Association, the Stamford Innovation Center, the Business Council of Fairfield County and the Department of Economic and Community Development. There needs to be a better awareness program for these resources so that small businesses can better utilize them.”
What can government officials do to help businesses?
“It”™s not that officials are not well intentioned and trying to hinder small businesses, but many government officials do not have, and should have, a background in business to better understand what business owners need to succeed. While some officials may be against it, those without a strong understanding should work in partnership with business leaders that can execute and provide owners with guidance and advice based on experience and facts.”
Fifth Street Finance Corp. is a specialty financial company that lends to and invests in small and mid-size companies. The firm is headquartered in White Plains, N.Y., and has an office in Greenwich.Â
