by Bradley Parsons
Staff Writer
Encouraging small business in Jacksonville is a high-percentage game for the City.
More than 95 percent of hiring businesses in Duval County are small businesses. The City calls the businesses with less than 100 employees “our community’s major employer.” Their owners do most of the hiring in the City, particularly in poor areas.
A less encouraging statistic for the Jacksonville Economic Development Commission: about 50 percent of small businesses fail within four years. A lack of money and management savvy are the most commonly cited reasons.
The JEDC’s Small Business Advisory Committee carefully considered those statistics as it began Tuesday its review of the commission’s handling of small businesses. Executive Director Kirk Wendland said the JEDC needed to figure out how to get more money and more knowledge to viable entrepreneurs in Jacksonville.
“If you look at the overall economy, and who’s bringing jobs and wages, a lot of them are small enterprises,” said Wendland. “We have to find a way to support them.”
Wendland said the JEDC should bolster its partnerships with local small business centers at the University of North Florida and the Chamber of Commerce. They should be an entrepreneur’s first stop, said Wendland.
Ideally, Wendland said the City wouldn’t enter the process until a business plan had been developed and critiqued. He said the JEDC would likely require small businesses to seek private financing before asking for City incentives.
“There’s no point in the City issuing loans if a bank could do it instead,” said Wendland.
He acknowledged that start-up businesses often have a hard time finding bank financing.
Banks are reluctant to loan relatively small amounts of money to ventures with a 50/50 chance of surviving more than a couple years, said Ralph Ross, the deputy district director of the U.S. Small Business Administration.
Since his arrival earlier this year in Jacksonville, Ross said he’d noticed a dearth of private funding for start-ups.
“No well-funded deal is going unfunded in this town, I assure you,” Ross told the committee. “It’s the smaller projects where you need help. That’s why the government gets involved in small business lending. Small businesses are not a good risk for banks.”
Wendland said public financing should “fill in the gaps,” left by a lack of private capital. By funneling start-ups through the small business centers, he said the JEDC could make better-informed decisions about which projects to back.
“If it’s a viable project with a well-thought-through business plan that just couldn’t find bank financing because they don’t want to loan in low amounts, that’s an area where I think we could help,” said Wendland. “If a project has been rejected by several banks because it’s not a good deal, I don’t know if that’s a gap we want to fill.”