Mid-Life, Small Business and How Goldman Sachs will Help

By Sharon • November 18th, 2009

One of the upsides of this recession is that it gave a wake-up call to many people who were keeping their “inner entrepreneur at bay.” Actual layoffs and the uncertainty of long-term employment was a huge incentive for many people to finally start their own small businesses.

Making the mid-life leap to entrepreneurship is is perhaps a little less stressful in some ways. By your late 30’s or 40’s you likely know what it is you’re good at and where your interests lie. Even if you’re not sure, you’re more likely to ask the kind of meaningful questions you might not have asked as a 21 year old.

Do you have enough in your savings account to cover expenses like the mortgage/rent, utilities, children’s expenses, etc. for at least 6 months?

What will leaving your job mean for your retirement savings plan?

What about college expenses for your older children or plans you had to cover costs associated with weddings, showers, trips?

For many people in this group going rogue and leaving the workplace may mean some changes to some pre-conceived notions about their lifestyle.

Some will decide to downsize and choose the simple, frugal approach to living – at least until their business starts generating a profit.

Others will take loans from family/friends, credit cards or even banks. Of course there has been a lot of talk lately about how difficult it is to get small business financing from banks. From my perspective that’s always been the case for most small businesses, although this recession likely hasn’t helped.

But in a previous post I referred to stories of perseverance that paid off for small business owners. That’s an evergreen truth about the journey to entrepreneurship – perseverance is the foundation. But just yesterday there was some very good news regarding small business financing.

Blue chip investment bank, Goldman Sachs earned a whopping $3.2 billion last quarter and decided to do something to help spread the success around. In light of the public’s huge distaste for the bank bailout provided to that sector by the U.S. government, the bank decided to launch a $500 million initiative called “10,000 Small Businesses.”

According to CNN the initiative is “aimed at unlocking the job creation and economic growth potential of America’s small companies.” Included on the project’s advisory council are some of the nation’s most famous business leaders including Warren Buffett, Goldman Sachs’ largest shareholder.

Here are program highlights as taken from the Goldman Sach press release:

Program highlights include:

• Business and Management Education: Small business owners will receive practical business education delivered through partnerships between local community colleges, universities and other institutions. 10,000 Small Businesses will contribute $200 million to these partners to provide scholarships predominantly to underserved small business owners and build educational capacity.

• Mentoring and Networking: Advice, technical assistance, and networking will be offered to participating small business owners through partnerships with national and local business organizations, as well as the people of Goldman Sachs.

• Access to Capital: Goldman Sachs will invest $300 million through a combination of lending and philanthropic support to Community Development Financial Institutions (CDFIs). The investment will increase the amount of growth capital available to small businesses in underserved communities and expand the capacity of the CDFIs to deliver enhanced technical assistance to small businesses. 10,000 Small Businesses will provide technical assistance to graduates of the program to help them access other sources of capital.

• Advisory Council: 10,000 Small Businesses will be guided by an Advisory Council co-chaired by CEO Lloyd C. Blankfein, Warren Buffett, and Dr. Michael Porter of Harvard Business School. The Advisory Council will assist in the development, execution and evaluation of the program.

Note this initiative is primarily focused on businesses that have been in operation for at least two years. For more information you can visit the Goldman Sachs website.

The time is ripe for small business growth and it’s encouraging to see the small business sector getting the recognition and support needed to boost the creativity, energy and efforts needed to drive this economy upwards.

To your success,

Sharon

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