Equity Financing Alternatives for Small Business: A Review of Best Practices in the United States

10. Flow Support Systems in the US

Flow support systems are initiatives or programs that allow entrepreneurs to access and develop generic flow incentives in order to improve their chances of receiving equity financing. These support mechanisms provide much needed training in the area of business planning, financing consultation and other key management areas.

10.1 Government Initiatives

10.1.1 Small Business Development Centers (SBDCs)

SBDCs are a result of the cooperative efforts of the SBA, the academic community, the private sector, and state and local governments. SBDCs are funded and administered by the SBA. They provide management and technical assistance to small businesses and entrepreneurs. There are also other variations of SBDCs including Women's Business Centres (WBCs) and Tribal Business Information Centres (TBICs).

Additional Information: http://www.sba.gov/SBDC/index.html

10.1.2 Business Information Centers (BICs)

BICs are supported by local SBA offices and provide one-stop consultation services and access to computers and software. Most have small business reference libraries to assist entrepreneurs in a number of areas, which include creating business plans, developing marketing strategies, investigating export opportunities, etc.^{Footnote 17} BIC's that are located in economically underprivileged regions are called One Stop Capital Shops (OSCSs) and are partnerships between SBA and a local communities.

Additional Information: http://www.sba.gov/index.html

10.1.3 Service Corps of Retired Executives (SCORE)

Created in 1964, SCORE is a nonprofit association comprised of over 12,000 volunteer business counselors. In 1998 there were 389 SCORE chapters throughout the U.S. SCORE members offer free counseling services to entrepreneurs. To date approximately 4 million entrepreneurs have consulted SCORE members.

Additional Information: http://www.score.org/

10.1.4 State and Local Business Development Centres

In addition to SBDC's administered by SBA, there are a number of BDC's that are initiatives of state and municipal governments. The primary function of these centres is to provide business planning and other consultation services to small business owners. Although there are some excellent resources for entrepreneurs at the state and municipal level, most of these programs are complimentary to those of the SBA. As a result an in depth review of these programs would not add significantly the information being allocated in this review.

10.1.5 Technology Commercialization Centres (TCC's)

SMEs can utilize numerous technology commercialization centres across the United States to improve their technologies. By developing prototypes in conjunction with reputable technology incubators, entrepreneurs will be able to attract equity investments more easily. In addition to the numerous university TCC's, good examples can also be found at the Austin Technology Incubator located at the IC2 Institute and NASA-sponsored Regional Technology Transfer Centers. These organizations attempt to expedite the transfer and commercialization of technology in order to facilitate economic development through the growth of SMEs.

10.1.6 Online Government Resources

There are a number of government agencies that have detailed information regarding the start-up and effective management of a small business. Although there are some excellent state web sites, the most comprehensive resource for small business owners is the US Small Business Administration web site. There are numerous documents and online tutorials regarding key management issues faced by entrepreneurs. An entire section is devoted to financing issues.

10.2 Private Initiatives

Private initiatives include the services of management consultants, legal professionals and accountants. Although most provide assistance on a fee-for-service basis, many free resources can be found at municipal libraries and on the Internet. Online examples include http://www.quicken.com/small_business, http://smallbusiness.yahoo.com, http://edwardlowe.org/indexa.htm. Although these private initiatives provide some excellent resources for entrepreneurs, it should be noted that there importance is secondary to that of sources such as the SBA web site. In most cases, SBA materials have simply been summarized or directly hyper-linked to.