SBA unveils computer help site Year 2000 problem imperils up to 330,000 small businesses

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November 20, 1998|By Shanon D. Murray | Shanon D. Murray,SUN STAFF

WASHINGTON -- The U.S. Small Business Administration continued its full-court press yesterday of alerting small businesses to the dangers of the year 2000 computer problem and offering help to fix it.

Small-business experts estimate that of 23 million small businesses, as many as 330,000 risk closing until the problem is corrected and an additional 370,000 could be crippled.

According to a recent Gallup poll, 82 percent of businesses with revenue under $50 million are at risk for Y2K-related computer problems, and 25 percent of them hadn't taken any action.

Yesterday, the SBA and Dell Computer Corp., one of the leading computer suppliers to the small-business market, unveiled an Internet "reference center" that will help small businesses conduct a free risk assessment.

The Web site includes training materials that offer steps a small business can take to check compliance.

"We're not suggesting a panic, but we ask that small businesses have a contingency plan to deal with any disturbances. The risks are real and action must be taken," said Andy Greenawalt, chief information officer for Dell, in an interactive news conference broadcast from San Francisco to Washington over the Internet.

The discussion and alliance with Dell is part of the SBA's Y2K awareness campaign that started in June.

The year 2000 problem is the result of much of the world's computer software, and even some hardware, being designed so that years are recorded by their final two digits, or "fields."

When the clock strikes 12: 01 a.m. on Jan. 1, 2000, those fields will read "00" and be interpreted as 1900 instead of 2000, imperiling recordkeeping and automatic operations.

Beyond that, the Y2K problem could affect everything with digital chips, such as cash registers, automated teller machines and elevators, said Andy Greenawalt, a chief information officer for Dell, based in Round Rock, Texas.

Could cost $600 billion

Some experts estimate it could take about $600 billion to eradicate the Y2K problem, which has spawned a multibillion-dollar consulting industry. Yet, on average, many small businesses may be able to fix the problem for less than $5,000, experts said yesterday.

For example, risks usually can be mitigated by free downloads and software, Greenawalt said.

"We want small businesses to make intelligent choices so they won't have to spend money unnecessarily," said Jon-Christopher Bua, the SBA's director of communications in Washington.

"The perception that Y2K compliance is going to be expensive makes many small-business owners shrug their shoulders," said Jim Weidman, spokesman for the National Federation of Independent Businesses in Washington.

"In some cases the problem can be fixed for a few thousand dollars. That shouldn't inhibit action," Weidman said.

Kreative Plastics, a custom decorating company in Frostburg, could be among the exceptions.

John Korpela, founder of the 65-worker company, said it has spent hundreds of dollars assessing Y2K's impact on the business.

The Internet has helped. The company found a procedure to test computers for compliance. Of eight PCs, only one is compliant, he said. If his manufacturing machines are found to be noncompliant, it could cost $50,000 to replace each, he said.

"It's going to take a lot of time and money, and that's always expensive for a small company," Korpela said.

Loans available

For small businesses that might have to spend money fixing their Y2K problem, SBA loan guarantees are available, said Fred Hochberg, SBA deputy administrator who participated in the news conference from San Francisco.

"The lack of capital is not an excuse," he said.

The World Wide Web address for the reference center is The SBA's Web address, which offers general information, is

Pub Date: 11/20/98

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