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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Agency puts money back in economy

Bert Caldwell The Spokesman-Review

Jim Chrisman can probably tell you more about the value of the nation’s Small Business Development Centers than anyone else in the United States.

Since 1982, the consultant and professor at Mississippi State University has surveyed program clients nationally and at the state level to measure SBDC performance. His first study, Chrisman says, helped assure SBDC survival beyond the five-year sunset period set by the legislation that established the program in 1977. Not many states had an SBDC program back then. All do now, as do Puerto Rico, Guam, American Samoa and the Virgin Islands.

When a program returns an average $2.50 for every taxpayer dollar invested, government and business leaders pay attention.

The more than 1,000 SBDC offices provide management and technical information, counseling and training, as well as help finding financing.

“It’s been a highly positive program,” says Chrisman, who says high client satisfaction also helps sell the program to budget-conscious lawmakers. So conscious, in fact, federal funding in fiscal year 2005 will remain at $89 million, a sum state, local or private sources are required to match.

Chrisman says the Idaho and Washington SBDC efforts have been among the most effective.

According to his most recent surveys, Washington received $2.89 back for every dollar of state and federal support. The payback in Idaho was $4.63.

“That’s a conservative number,” says Jim Hogge, director of the Idaho program for 12 years.

The six regional offices, including one at North Idaho College, also helped create or preserve more than 2,500 jobs in 2003. Since the mid-1990s, clients have added jobs at four times the rate of non-clients, and kicked back an additional $2 million annually to the federal and state governments in tax revenue.

The 2004 budget is $1.32 million.

Hogge says the agency has stretched those dollars by turning to the Internet to get potential clients further along the learning curve before they need face-to-face counseling. He’s also imposed internal controls to measure performance.

“We’ve worked real hard to get the most out of our resources,” he says.

Brett Rogers, assistant director of Washington’s program, says a rebounding economy brought 3,774 clients into the 20 state SBDC offices by Oct. 30, more than the 3,142 seen in all of 2003. Of those, 1,159 were counseled in Eastern Washington. Clients have already added or retained 1,720 jobs compared with 1,360 in 2003, and sales have increased by $65 million, or seven percent.

The Washington SBDC 2004 budget is $3.2 million which, given the demand, is starting to pinch.

“We didn’t add any new counselors,” Rogers says. “We’re going to get pretty saturated here.”

The Spokane SBDC office at the Spokane Intercollegiate Research and Technology Institute employs two counselors. Spokane officials want to bring one into the Spokane Business Development Center — SBDC moves to SBDC, how confusing is that? — at least part-time to improve access for business owners also working with AHANA or SCORE counselors in the Business Information Center. The president of the Association of Small Business Development Centers says the Idaho and Washington programs perform better than those in most other states because of the continuity of leadership provided by Hogge and his Washington counterpart, retiring Director Carolyn Clark, who has been on the job for five years.

Don Wilson also says programs in other states have suffered from cuts in state support since 2001. Although funding is improving, some states may never get back to peaks reached before the Sept. 11, 2001 terrorist attacks.

He says the Chrisman studies and positive comments from SBDC clients to lawmakers have kept federal support for its operations steady while other small business programs like the 7(a) loan program have been cut.

“It very clearly shows we promote economic growth,” Wilson says, adding that states that have reduced their SBDC budgets are slowing the economic recovery that will help them fill in budget gaps.

Chrisman says SBDC is both efficient, and well-appreciated by clients, who give the program a satisfaction rating of more than 90 percent.

“That suggests it provides good value,” he says. “I think it’s something the public should know about.”

And now you do.