How Small Business Owners Fix the Economy

TOM HUDSON: Now from those big ideas to small business. Small companies are the engine of U.S. economic growth, responsible for as much as 75 percent of all new jobs. As we look at ways to fix the U.S. economy, we found one small business owner who has overcome challenges while benefiting from good timing.

KRISTIN WEISSMAN, OWNER, STUDIO K: My dream has always been to own a dance studio. I decided to open this studio and do something that`s been the first of its kind in the country, to combine three different divisions in the entertainment industry — dance, photography and a PR agency all in one.

HUDSON: Kristin Weissman`s Studio K offers a variety of dance classes to adults. These days, classes are packed. Membership has grown from 20 people to more than one thousand in less than a year. That growth has sparked hiring. The studio started with a staff of 13. It now employs 32 people. But opening the studio was not an overnight success.

WEISSMAN: It was really hard to get a bank to believe in my vision and in what I wanted to do, especially because it was a first of its kind concept. It took two solid years of consistent effort until I finally had a bank believe in my dream.

HUDSON: These days, it`s even more difficult for small businesses to get approved for a loan. According to regulators including the Federal Reserve, lending fell by about 9 percent in 2010 to just over four million loans totaling nearly $180 billion. The National Entrepreneur Center in Orlando, Florida has helped facilitate more than $125 million in loans since 2003. Executive Director Jerry Ross echoes a sentiment heard across the nation: one of the biggest challenges facing small firms is access to capital.

JERRY ROSS, EXEC. DIR, NAT`L ENTREPRENEUR CENTER: Whether that`s working capital to keep the business going or capital for expanding the business. What we`ve been able to do here at the entrepreneur center is to help people get ready to go before the banker.

HUDSON: The other big challenge is uncertainty.

ROSS: When businesses don`t know what to expect, they don`t do anything. So they may be looking to hire, but they`re not sure what their costs might be if they hire someone. So I think if they have some confidence in what tomorrow may look like or what tomorrow may bring, that businesses will really start to bet again on the future.

HUDSON: Getting small businesses to grow is crucial for the U.S. economy, because small business makes up 99.7 percent of all U.S. employers. Since on their own, most small firms can`t do much to increase confidence in the economy, Ross says for now, they should focus on business basics.

ROSS: Find out what you do the best. Some people compete on price, some people compete on service, some people compete with a superior product. Number two is to get help from everyone and anyone who can provide help. Number three, don`t be afraid to fail because you don`t have all the information all the time. And so the image of the small business owner sitting behind their desk knowing it all is not true.

HUDSON: Kristin Weissman of Studio K says the key to her success has been staying persistent.

WEISSMAN: Never give up the dream. I know everyone says that, but it`s so true. You will hear a million no`s as they always say in anything you do until you get that one yes and don`t get discouraged.

HUDSON: All week long we have been reporting ideas on “How To Fix the Economy” and we want to hear your ideas as well. You can contact us online, the website at NBR on You can also send us your ideas for fixing the economy on twitter @biz report. If tweeting isn`t your thing, if you`re on Facebook, bizrpt. We`ve gotten a lot of great response, Susie and we`ll continue to see that online hopefully, as well.

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