America’s Small Business Development Center Network The U.S. Small Business Administration’s Largest Resource Partner SBDC Briefing for the Office of Management and Budget October 30, 2006 Association of SBDCs Mark Petrilli, Illinois, Board Chair Jody Keenan, Virginia, Board Vice Chair John Massaua, Maine, Past Board Chair Clinton Tymes, Delaware, Past Board Chair Don Wilson, ASBDC, President and CEO SBA – Entrepreneurial Development Cheryl Mills, ADA OED Mark Quinn, Deputy ADA OED Antonio Doss, AA OSBDC Jean Smith, Deputy AA OSBDC

America’s Small Business Development Center Network The U.S. Small Business Administration’s Largest Resource Partner 2 AGENDA Service-Focus and Scale of SBDC Program SBDCs Support of the PMA Reaching Diverse Markets Managing for Performance Focusing on Outcomes Leveraging Partnerships ROI Evaluating Impact Discussion

America’s Small Business Development Center Network The U.S. Small Business Administration’s Largest Resource Partner 3 MISSION : Created in 1980 as a unique cooperative partnership through which federal, state and local government, the higher educational community, and the private sector could most effectively meet the business, education and management and technical assistance needs of current and prospective small business owners. PURPOSE : The nation’s leading practical education resource for in-depth business counseling, high quality management education, quick access to information and broad-based technical assistance. Educational services and business counseling are expected to improve business survivability and provide cost-effective support for new job creation.

America’s Small Business Development Center Network The U.S. Small Business Administration’s Largest Resource Partner 4 Small Business is HUGE Percentage of US Firms by Employment Size Small Businesses: ▪ Represent 99% of all firms ▪ Employ 50% of all private sector employees ▪ Pay 45% of the total U.S. private payrolls 89% of all businesses have fewer than 20 workers

America’s Small Business Development Center Network The U.S. Small Business Administration’s Largest Resource Partner 5 Small Business is HUGE: A Dynamic and Growing Market Self- employed and firms employing 0-5 employees 16 million businesses (US Census) Growing Businesses employing 5-99 employees 2.5 million businesses (US Census) Mature Businesses employing employees 483,000 businesses (US Census) Large Businesses Employing more than 500 employees 17,000 businesses (US Census) New Business Entries 4 million annually (NFIB) 18 Million NascentEntrepreneurs Kauffman Foundation Study 2003 Pre-venture

America’s Small Business Development Center Network The U.S. Small Business Administration’s Largest Resource Partner 6 ED Resource Client Revenue and Firm Sizes Vary

America’s Small Business Development Center Network The U.S. Small Business Administration’s Largest Resource Partner 7 SBDCs: Creating an Environment Where Businesses Can Flourish SBDC Program aligned with President’s Small Business Agenda Providing small businesses with information, education and business management assistance they need to succeed SBDC uniquely positioned to meet needs at the state and local levels Extensive and stable geographic reach and infrastructure

America’s Small Business Development Center Network The U.S. Small Business Administration’s Largest Resource Partner 8 Focus of the SBDC Program Meeting America’s Small Business Needs from Pre-venture to Mature Companies Annual Needs Assessments Focus on effective outreach, in-depth relationships and high-quality education, information and counseling

America’s Small Business Development Center Network The U.S. Small Business Administration’s Largest Resource Partner 9 Meeting and Growing Underserved and Diverse Markets Meeting and Growing Underserved and Diverse Markets

America’s Small Business Development Center Network The U.S. Small Business Administration’s Largest Resource Partner 10 SBDC Client Characteristics Counseling Clients Training Attendees Business Ownership SBDCs also serve America’s veterans Veterans constitute: 10% of counseling clients & 6% training clients

America’s Small Business Development Center Network The U.S. Small Business Administration’s Largest Resource Partner 11 Unique Counseling Clients & Hours, * * Projected total for 2006 based on data through the first three quarters.

America’s Small Business Development Center Network The U.S. Small Business Administration’s Largest Resource Partner 12 Training Attendees, * * Projected total for 2006 based on data through the first three quarters.

America’s Small Business Development Center Network The U.S. Small Business Administration’s Largest Resource Partner 13 Overall Counseling and Training for SBDC Program * Percent Change Relative to Baseline Year 2001 * Projected total for 2006 based on data through the first three quarters.

America’s Small Business Development Center Network The U.S. Small Business Administration’s Largest Resource Partner 14 Improved Outcome Focus Less Focus on Outputs Effective October 1, 2006 new goaling and performance measurements have been put in place which deal less with outputs and more with outcomes New leading indicators have been put in place which are deemed to be drivers of the program’s impact New Goaling Methodology Switch from a top-down to a market-based methodology Cooperative relationship between local SBA district offices and SBDC network

America’s Small Business Development Center Network The U.S. Small Business Administration’s Largest Resource Partner 15 New Performance Measurements Number of Long-term Counseling Clients (5 hours or more) Number of New Business Starts Dollar Amount of Capital Infusion SBA loans Non-SBA loans Equity Investment

America’s Small Business Development Center Network The U.S. Small Business Administration’s Largest Resource Partner 16 Commitment to Quality and Continuous Improvement Accreditation Reviews (4 yrs) SBA Program Reviews (2 yrs) SBA Financial Reviews (2 yrs) SBA Project Officer Reviews (qtr, annual) State/Other Host Partner Review(annual)

America’s Small Business Development Center Network The U.S. Small Business Administration’s Largest Resource Partner 17 Partnership and Leverage of Federal Resources 250,000 counseled, 480,000 trained Thousands of Affiliated Partners and Service Providers Over 4,000 Field Staff Over 950 Service Locations 63 SBDCs $88m SBA/ >$88m Hosts

America’s Small Business Development Center Network The U.S. Small Business Administration’s Largest Resource Partner 18 Job Creation and Return on Investment Cost per job created - $1, Cost per job created/retained - $ **Chrisman *SBA Data

America’s Small Business Development Center Network The U.S. Small Business Administration’s Largest Resource Partner 19 Comparison of Cost per Job Created/Retained

America’s Small Business Development Center Network The U.S. Small Business Administration’s Largest Resource Partner 20 SBDCs Create Businesses, Jobs and Sales – 24/7 A new business is opened by an SBDC in-depth client every minutes A new job is created in the U.S. by an SBDC in-depth client every minutes $100,000 in new sales are generated by SBDC in-depth clients every minutes $100,000 in financing is obtained by SBDC in-depth clients every minutes SBDCs Create Businesses, Jobs and Sales – 24/7* * Chrisman

America’s Small Business Development Center Network The U.S. Small Business Administration’s Largest Resource Partner 21 Other Key Impacts Over 56% of SBDC In-depth, pre-venture clients start new businesses [ Source: Chrisman] 80% of businesses started with SBDC assistance are still in business 6 years later - 35% higher survival rate than businesses in general [Source: Chrisman, PA] SBDC In-Depth clients [Source: Chrisman] Generated $9.3 billion in new sales Experienced 24.8% sales growth compared to 6.3% for businesses in general (Use two graphs from ASBDC) Experienced 9 times more job growth than businesses in general Jobs Created/Retained Obtained $3.6 billion in financing ROI

America’s Small Business Development Center Network The U.S. Small Business Administration’s Largest Resource Partner 22 Evaluating Impact: Various Methodologies ED Impact Study  Random sampling of all ED program counseled clients  Three-year longitudinal study  Sampling taken in 4 th Qtr of fiscal year Chrisman Study Measures used are widely recognized and accepted in economic development community Surveys ALL long-term counseling clients (5 hours or more) Tests for response bias Conservative model for estimating impact Consistently assessed for 14 years – provides historical view

America’s Small Business Development Center Network The U.S. Small Business Administration’s Largest Resource Partner 23 Evaluating Impact: Various Methodologies Other Economic Development Modeling Tools IMPLAN REMI State Funding Requirements Texas Comptroller requirement

America’s Small Business Development Center Network The U.S. Small Business Administration’s Largest Resource Partner 24 Discussion and Questions