The Financial Crisis and Small Business in the Classroom – Part 1
Everyone is talking about the financial crisis. But what is the impact on and by small business? This is the first of a 4-part series on this topic. The major teaching points and exercises in this series are based on an interview with the Acting Director of the Small Business Administration, Sandy K. Baruah (see this video) for interview. Below is a summary, with each of the upcoming posts delving into more depth:
What small business owners can do to help themselves in this crisis:
– Affirm or build relationship with financial institution.
– Prepare for the long haul.
What the government is doing:
– SBA guarantees/backs 85% of the loan to financial institutions providing SBA loans to small businesses.
Baruah interview takeaways:
1. Small business and entrepreneurs are important – Baruah describes entrepreneurs and small business as the ‘engine of our economy’ providing two-thirds of all jobs in the U.S. However, 70% of small businesses report having problems obtaining credit.
2. Business plan – In discussing how to address the challenge of obtaining credit, Baruah suggests the number one thing a business owner should do is provide a solid business plan. Show sound thinking behind your business and the approach to your market.
3. Current financial situation – The next key item Baruah mentions as important to banks is your business’s current financial situation. The bottom line here is: Will you be able to pay back your loan?
In preparation for the suggested exercises offered over the next 3 posts, check out the following links. You might consider assigning some of these readings to students.
Financial literacy is hot (see bottom of earlier post)
SBA press release on the role of small business in the US economy
Entrepreneur in the Classroom Curriculum Sections (EITC free curriculum):
– Role of Small Business in the Economy: Module 1, Slides 21 to 29.
– Debt, Equity, and Financial Statements: Module 3, Slides 23 to 30 (Option: Exercise 3-4 PDF, Part 2) & Slides 44 to 52
– Business planning: Module 3, Slides 4 to 43
Stay tuned for upcoming posts with information and exercises on:
– The Role of Small Business in the US Economy
– Financial Statements 101 & an Introduction to Debt and Equity
– Business Planning
Want to learn more about entrepreneurship for young people. See the free EITC curriculum.
Entry filed under: Business exercises, Curriculum, Entrepreneur, Teaching tools, Uncategorized, Young Entrepreneur, Young Entrepreneur Foundation. Tags: Acting Administrator, Classroom, Exercises, Financial Crisis, Learning, Sandy K Baruah, SBA, Small Business, Small Business Administration, Teaching.