Encouraging Small Scale Business

free essayThe state is often under strain when it comes to joblessness. Whenever there is an opportunity that can offer solution to the case of unemployment, the government is advised to boost such initiatives, because it helps in unifying the community, since it empowers the society in the financial terms. Over the years, it has been the case that large businesses have been dominating the financial competitive arenas against the small businesses.

Socio-Economic Consideration of the Government Procurement Procedures

For smooth operations of the government, it (government) must acquire goods and services from the public, private sectors, and business enterprises. In so doing, the government uses tendering policy. The main purpose for this is to provide a fair framework, through which citizens can be equally empowered to take part in the government stakes. The government prefer the tendering policy, because through it, it can get goods and services at better price, good value of items, and items, whose values are valid (Grey, 2002). The federal government has opted to promote the small-scale businesses, since statistics vividly shows that small and middle businesses are the ones that drive the economy, contrary to the popular opinion that mega-businesses are the ones that drive the economy. With this knowledge, it has been established that small businesses create more employment than any other mechanism in the country. These businesses pay taxes; thus, heavily contributing to the local economy. These businesses create employment to the extent that today in America, out of every three jobs, two are created by the small-scale businesses.

It is worth noting that these small businesses have far much reaching effect to the communities, where they are established. Therefore, awarding these businesses contracts can affect the businesses negatively or positively. In this consideration, the government is vigilant and open to ensure that communities are empowered. Strengthening the economic capacities of these organizations ensures their expansion; hence, further creation of the jobs in the country. It, therefore, follows that awarding or loss of contracts affects the establishment of communities. The economic empowerment of the small-scale businesses has a direct impact on the community; hence, social empowerment. However, these businesses are seasonal and they have the greatest number of lay-offs. This elimination of jobs that they create in a given period of the year is due to their incapability to expand, as well as due to the lack of expertise and knowledge by the managers of these businesses to flex with the seasons of the year. There is a need for these businesses to be boosted in order to allow them to operate all year round.

According the Census Bureau, in 2005, for instance, 99% of 2.5 million of the new jobs came from the small-scale businesses. However, this is from the new businesses, it is apparent that small businesses that have been in the market for 5 years have instead cut off the employment by 0.5%, but they have never recovered them. This is in contrast to the big companies that employ people on the rare occasions, but maintain them for a long time.

When it comes to procurements, small businesses are often disadvantaged, as they cannot compete favorably with large businesses, which have the credit and capacity to compete. To help these small businesses to secure tenders, the federal government has opted to develop the strategies that would ensure that they secure fair procurement spending in the same proportion to the large businesses. This is done purposely with the intension of the government to empower these businesses; thus, empowering its citizens economically as well.

Distinguish between contracts financing via loan guarantee vs. Private Financing

Contract Financing by Loan Guarantee

In this case, the borrower/contractor seeks to secure a guaranteed loan, which is a revolving credit fund or other financial arrangements made in pursuit of a tender, on which the guaranteeing agency is obliged to purchase a given percentage of the loan to take equal responsibility in case of losses in the percentage of the guaranteed amount (Stainback, 2000). To authenticate this, the Congress has authorized Reserve Bank to act on behalf of the guaranteeing agencies.

The guaranteed loans are in most cases similar by certain characteristics to the private financing. They just differ in the small aspect, as in the case, where the guaranteeing agency is forced, on the lenders’ demand, to buy a fraction of the loan, so as to bear any impact on the losses that may be incurred.

Private Financing

Private financing comes as a solution to the tedious procedural method of getting finance from the bank. In the economy of today, there are people and/or groups of individuals, who have tangible equity in their assets and they can opt to offer private financing. Private financing is often faster, and the interest rates are flexible and easily negotiable, because they do not have turgid policies governing them. In the private financing, a seller is often guaranteed of faster and efficient selling of his/her property with high return value.

Businesses have dare needs to boost their operations to increase their sales, as they attract customers. For the small-scale businesses, private equity financing would be most appropriate, since it does not go to the finer details of the business, but rather it analyses the growth potential of the business and of the management team. The bank would take the business captive by framing the hard assets of the business as collateral, while private financing would only take into consideration the interest potency of the business. Other significant differences of private financing and loan guarantees is that there are no administration fees deducted, as compared to the bank financing, which does not only deduct some fee, but also takes significantly longer time to process the loan. However, in the guarantee loaning, there is a share of losses, unlike in the private loaning, where the business suffers solely the consequences of losses.

Protection Available for Contractors for their Intellectual Property

For the work a contractor is hired to do, they often retain the right to that work. One may be hired to do such work as designing a logo, writing an article, creating graphics, or developing architectural designs (Andersen, 2006). The business that has hired one to do such work has no right to own the end product in as much as they paid for the work. According to the Copyright Rules, one would be protected and the company that paid for the work only uses the design or the intellectual property, as is prescribed in the contract, and no further use is allowed. The owner, or the designer, often owns all the right in regards to the end product, and he/she can use it elsewhere to advance his/her career.

The company that paid for the design may want to use the design for some time or even change the ownership of the Copyright. They cannot just do this, unless there is a special agreement with the original owner. Such agreement is referred to as “work for hire”’. The company that paid for the design in this respect owns the right over the design for as long as the written agreement between the two parties states. To further avoid manipulation and staling of one’s intellectual property, one could register his/her intellectual property. This is to ascertain that one’s idea is patented. One can also register his/her trademarks and service marks in order to avoid duplicity of use with other people. There is also copyright registration and domain name registration. Such legal registrations protect one against fraudsters, who may steal one’s idea. There is also protection of Commercial Intellectual Property, where one protects goods and services that are currently sold and also those, that are yet to be developed but are due to be sold at a specific month. Legal protection of such commercial items ensures that one remains ahead in the market. There is also operation property, which protects the technology platforms, web sites, data base, publications, software, and business processes. Such essential technological discoveries or inventions are worth protecting as is provided by the law to elude any possible intellectual theft. Immunity is also available for the Conceptual Intellectual property. This means that:

  1. All inventions, in spite of their initial status, that is, whether they can be patented or otherwise, whether they have been or yet to be registered;
  2.  Ideas and thoughts that one holds about a particular subject matter, whether they have been developed or are yet to be developed. Whether they still exist in their abstract form or not, whether they are still deemed as subject of pending patenting;
  3. Trade approaches and secrets, be it a business information or a technical know how, whether they have been reduced to practice or not;
  4. Technology, including the technical application of knowledge, it can be in the manufacturing or new method of customer approach, it could be on pricing and information on costs.

Collectively, declaring these and following legal framework to protect the ‘Intellectual Property’ means that the Intellectual Property is owned and that anybody, who uses it against the owner’s knowledge, bridges the law.

Analyze title Policy vs. License Policy

Title Policy is a significant component of business transactions, especially of those that are involved in buying and selling the real estate. This policy is important for those, who buy commercial property; since it substantially protect them from any misfortune that may befall them in terms of the challenge that one could pose on the property or part of the property (Hazari, 1967). It is also vital, since it could act as a shield against the fraudsters, who could come up with fake documents to claim ownership of the property.

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Licensing Policy is also an important aspect of business in today’s endeavors. This is the document that outlines the acceptance of a particular authority to have permitted one to operate using its property or its policies (Gosdin, American Bar Association, 2007). For example, the City Council is the authority, which gives permission (the licensing authority) to people, or businesses to use property within the city. The licensing policy outlines the authority that one has over the property that he/she is using. Should anyone claim the legality or present a case on the claim of the usage of the property, one is safe to present the license, which presents the defined function of the policy, as stated by the authority. License also offers guidelines and rules that the licensee has to abide by in the course of using the property that he/she has been permitted to use. The licensing policy defines the period, in which one is to use the designated property.

Title policy is used on the property that belongs to somebody. It signifies complete transfer of ownership of property from one party to another or one person to another. Title policy further offer financial protection against title difficulty that is not easily distinguishable. Unlike the title policy, license policy does not provide permanent ownership of property. It merely represents temporary usage of a facility or a property. Licensing policy does not offer full rights, since the property that is licensed is still guided by the regulations of the licensing authority.


This initiative by the government, if well adopted, has the potency of promoting the small-scale businesses to expansion. Through such expansion, jobs are guaranteed, and they shall be sustainable. Knowledge of the various aspects of businesses as the best mode of financing businesses would rather help stabilizing them. It is also appropriate to empower people on their rights, especially the intellectual property right, as such knowledge would further empower contractors financially. Financial empowerment is what drives a nation and stabilizes the economy. The government has, therefore, provided a good framework to protect such intellectual rights. Out of ignorance, folks have lost property for lack of the proper documents. It is important for people to know proper documentations, such as titles and licensing policies, and the ways they can protect their properties.

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