The continuing Pennsylvania budget impasse is not helping small business in Pennsylvania according to Dr. Woodrow Yeaney, director of the Clarion University Small Business Development Center (SBDC). Among the items being held up in the budget battle is funding for SBDCs, a statewide support system for new and existing businesses.
"The Clarion SBDC really helps people with small businesses and in this economic recession the SBDC is a valuable service to move toward recovery," said Yeaney. "In effect, all of the Pennsylvania SBDCs are now operating with a limited commonwealth budget. Depending on what is finally approved there could be a reduction of 40 to 50 percent in Pennsylvania state funding. It does not make sense to neglect something that can help improve our economy."
The SBDC network of 18 Pennsylvania university and college-based centers, hosted at the University of Pennsylvania's Wharton School of Business, annually assists 30,000 entrepreneurs whose companies employ roughly 100,000 Pennsylvanians.
Funding support from the Commonwealth enables the SBDCs to provide one-on-one confidential consulting services at no charge to clients. The network is seeking $8 million from the state for fiscal 2009-10 to sustain its efforts. The state funding is leveraged one-for-one and provides match needed to obtain federal and other financial resources. According to the Pennsylvania SBDC other states comparable to Pennsylvania have significantly invested in economic development and helping the small businesses that create most of all employment and jobs.
At the end of August, the Bureau of Labor Statistics had Pennsylvania ranked 24th of the 50 states with an unemployment rate of 8.6 percent. The average unemployment rate in September for the United States was worse at 9.8 percent. Pennsylvania has 978,831 small businesses, defined as having fewer than 500 employees, representing 98.4 percent of the state's employers and 49.9 percent of its private-sector employment.
"Without this service, my business concept may have failed and I would not have been able to afford to pay private consultants," said Henry Sauers, owner of McKean Tire and Lube in Elk County, one of many small business owners who have received assistance from Clarion University's SBDC. Sauers is among scores of small business owners who voiced their concerns for the future of the SBDC program in letters to Governor Edward G. Rendell and legislative leaders.
During the current recession, demand for SBDC services has increased. Many companies are turning to the SBDC to find capital, including emergency loans. So far this year, SBDCs have helped entrepreneurs raise over $75 million in start-up and expansion capital. Small firms are also seeking SBDC help in identifying new markets, both domestically and abroad, for their products and services. Meanwhile, with limited employment options, increasing numbers of individuals are working with the SBDC to turn their ideas into profitable new businesses.
Historically, the program has been a critical factor in small business success. While statistics show that two thirds of small businesses fail within their first five years, independent analysis confirms that 80 percent of companies started with SBDC assistance remain in business eight years later.
"Any reduction in state funding has a negative impact much greater than just the amount of the decrease," said Yeaney. "Quite simply, less investment from the state will mean a lot less impact. Having fewer business advisors means spending fewer hours providing individualized and targeted services."
During the first nine months of this year, the Clarion University SBDC found financing in the amount of $13,731,543 for 43 small business clients, an average of $319,338 per client. It provided 9,301 hours of consulting to 394 entrepreneurs and conducted 82 training workshops, seminars, and conferences for 1,125 participants.
Clients came from 26 counties in Pennsylvania and five counties in Ohio. "We don't turn anyone away, any business small or large,and the Clarion SBDC has an extensive exposure over a wide area," said Yaney.
The most active counties for Clarion SBDC consultation in Pennsylvania through the end of September are: Jefferson, 65 clients; Clarion, 50; Clearfield, 49; Elk, 43; Venango, 40; McKean, 33; Armstrong, 24; Potter, 18; Butler, 13; and Westmoreland, 10. During that same time frame, Venango County small businesses received $4,193,825 in funding; Clearfield, $3,638,250; Jefferson, $3,225,672; and Clarion, $920,191.
Yeaney explained the reduction in funding will also result in fewer educational programs and increased wait times. "This will significantly hinder our efforts provide training to help small firms survive, grow and create jobs which are essential to the economic recovery," he said. "History has demonstrated time and again that new firms create new jobs and fuel our economy. Policies that support entrepreneurship support recovery. Activities promoting economy recovery create new jobs, new companies, new tax revenues, new products and services."
The Clarion University Small Business Development Center is partially funded under Cooperative Agreement No. 5-603001-20040-25 by the U.S. Small Business Administration. The support given by the U.S. Small Business Administration through such funding does not constitute an express or implied endorsement of any of the co-sponsor(s)' or participants' opinions, findings, conclusion, recommendations, products, or services.
All programs and services are provided on a non-discriminatory basis. Clarion University's SBDC provides free and confidential management assistance and counseling to both start-up and existing businesses. Counseling appointments at several convenient locations in northwestern Pennsylvania may be made by calling (814) 393-2060 or 1-877-292-1843 weekdays from 8:30 a.m.-4:30 p.m.
Clarion University is the high-achieving, nationally recognized, comprehensive university that delivers a personal and challenging academic experience.
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