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Contract procurement deals could help small businesses

Small businesses in Mississippi that have taken a hit from the declining economy would be well served by taking a proactive approach and making sure they are taking advantage of potential government contract procurements programs. Government purchases are expected to increase dramatically in the wake of the war in Afghanistan.

“When the government gets in a situation it is in now, it starts spending millions of dollars on things produced here in Mississippi,” said Robert A. Taylor, director of the Small Business Development Center (SBDC) at Delta State University in Cleveland. “Contract procurement is very crucial for businesses to be involved in. If we get into a full-blown war, the government will be buying a lot from companies in the state.”

There are contact procurement centers throughout the state that provide information to state businesses about contract opportunities. One of the services of the SBDC is to get businesses linked up so that they are on the list to be notified about contracting opportunities with federal, state and local governments.

Another service is getting businesses designated as disadvantaged businesses, which provides more opportunities. A lot of businesses, particularly in the Delta, quality as disadvantaged businesses because of adverse economic conditions in the area. If a business qualifies for the Hubzone program, it gets precedence on set aside contracts. Bids from a business in the Hubzone program can be 10% higher, and still be awarded the contract.

“It is a goldmine for all of our businesses,” Taylor said. “We want to make sure everyone is set up for those programs so we are taking a more proactive approach to business development and not having to be reactive. Especially with the recessionary times and with the economy backing up a little bit, and then the war, what we need to do is take a proactive approach.”

Taylor said their office is seeing higher numbers of clients indicating the economy is placing stress on area businesses. In response his office has sent out cards to small businesses offering crisis assistance for businesses with management or money problems.

In addition to taking full advantage of government contracts, Taylor said it is more important than ever for state businesses to put a priority on doing business with other businesses in their area and the state.

“Communication and cooperation are more important than ever to maximize our opportunities because first and foremost we need to be doing busines with each other in the state,” Taylor said. “That is probably the most important thing for economic development right now. We need to create a lot of partnerships, and build on existing partnerships to procure more business.”

Doug Gurley, director of the Small Business Development Centers for Mississippi, said he thinks that Mississippi’s small businesses have been impacted much more by the downturn in the economy than directly by the terrorist attack.

“Businesses have to constantly respond to changing markets, the economy, and other factors,” Gurley said. “They have to make projections and decisions based on the information available. The SBDCs can help them update and maintain business plans, analyze cash flow, etc., which we have always done. This situation will result in some businesses going out of business but many opportunities will be created for other businesses.”

Other services Mississippi SBDCs can provide to businesses that may be in difficulty due to the economy or as a result of the Sept. 11 terrorist attacks and the current anthrax attacks are:

• Help impacted businesses identify non-traditional and alternate markets for their product/service. For example, a shoeshine stand in an airport could start a service picking up and shining shoes overnight at hotels. The service could be provided at hotels, convention centers and office buildings instead of airports.

• Help impacted business improve methods of delivery to cut costs.

• Help impacted business with entrenchment strategies including employee outplacement, cutting frills, inventory reduction, reducing overhead, cost saving measures and loan determination/qualification/assistance for a short term loan to get them past the business slowdown.

• As a last resort, help the impacted business determine the best liquidation strategy.

• If SBA makes disaster type loans available to impacted businesses in the MSBDC service area, SBDCs will help the impacted businesses with the loan application qualification process.

• Help the businesses determine how to effectively use temporary military employees and overtime to fill in for activated employees and how to determine what is the best method.

Gurley said it is hard to predict the future of Mississippi’s economy, and when a turnaround might occur.

“The times are too turbulent to be making long term predictions,” Gurley said. “I think people, including businesses, should exert reasonable caution, be aware of what is going on around them and in the economy and continue with life and business.”

Lucy Betcher, director of the Small Business Development Center at USM-Gulf Coast, said SBDC counselors can help businesses go through a business survival checklist that examines cash flow control, marketing and other vital functions that could mean the difference between success and failure in these turbulent times.

Betcher also reported a significant increase in the number of phone calls from SBDC clients. She said even just a week or two of low or no sales can be really tough on a small company operating on a narrow margin of profit. For more information on the location of the SBDC nearest to you, see the Web site http://www.olemiss.edu/depts/mssbdc.

Contact MBJ staff writer Becky Gillette at mullein@datasync.com or (228) 872-3457.


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