Pennsylvania's best hope for restoring lost jobs lies in improving the performance of small companies, historically shown to contribute to economic recovery and employment growth. This is the belief of Pennsylvania's Small Business Development Centers (SBDC), including the Clarion University SBDC.
Help for small firms and prospective business owners has become ever more critical as another 8,100 jobs disappeared last month, raising the state's unemployment rate to 8.9 percent, according to the December, 2009 record of the Pennsylvania Department of Labor and Industry report. This is where the SBDC can play a key role.
Thousands of small businesses and entrepreneurs rely on the statewide network of 18 Small Business Development Centers for help in starting businesses, reducing costs and pursuing new markets - all of which leads to job retention and growth.
"Our ability to respond, as we have done very successfully in the past, has been significantly reduced because of the state funding cut," Dr. Woodrow Yeaney, director of the Clarion SBDC reported. "Longer wait times for fewer clients who receive less of our time results in fewer jobs saved and fewer new employment opportunities."
Dennis Smith of Jefferson County exemplifies the types of entrepreneurially-minded individuals who are looking for new business opportunities. Smith, experienced in farming and service, saw a chance to become a supplier of corn for ethanol but needed to upgrade his farm operation with state-of-the-art equipment and machinery, as well as a new silo system and grain-drying system. The new equipment is totally energy efficient and can potentially process 400,000 bushels of corn in 2010. The operation also will help other local farmers who need to find grain - drying and storage facilities to sell to ethanol processors.
A consultant at the Clarion University Small Business Development Center provided guidance for the business plan, noting Smith would need sufficient working capital to start out. Typical of the program's comprehensive start-up services, Smith received assistance in preparing a three year projected income statement, balance sheet, statement of cash flow and drafting a detailed narrative explaining how he arrived at the projected figures.
In the fall of 2009, Smith's loan request was approved through the efforts of the Clarion University SBDC and the Jefferson County Department of Development. Together these two agencies secured funding for the project through Elderton State Bank, the US Department of Agriculture, the Farmers Service Agency, the Jefferson County Soil and Conservation District. "The SBDC made this intimidating process seem simple," Smith remarked. Three fulltime employees at eh Clarion SBDC office where Smith was served have been eliminated as a result of the funding cut.
"Thanks to the SBDC's help, Smith Farms was able to secure much needed state of the art equipment which will allow them to grow now and in the future," said Yeaney. "This type of growth in our current economy is exactly what our region needs in order to increase employment opportunities. If policymakers care about jobs - and we know they do - they need to invest in activities that save and produce them, like starting new businesses and helping small firms win new sales."
Over the past year, clients of the SBDC reported they saved 3,431 jobs and created 1,561 more as a result of SBDC assistance.
The SBDC employs a three-pronged approach to stem job losses and create new employment opportunities:
- Prospective entrepreneurs, including the unemployed, are helped through the process of starting or purchasing a new business.
- Existing business owners receive counsel on improving efficiencies and implementing measures to prevent job loss.
- The SBDCs also help businesses strategically consider new markets to boost sales that lead to new hires.
"There has never been a time when SBDC services were more relevant to the economic health of the Commonwealth," Christian Conroy, State Director of the Pennsylvania SBDC, said. "More small businesses are struggling to make it. More unemployed individuals are coming in to explore the possibility of business ownership. There just aren't a lot of other options right now."
Efforts to reverse the growing unemployment trend have been greatly hampered by a 41 percent cut in state funding for the SBDC program. Consulting staff, training workshops, research services and outreach offices have been slashed.
For more information on the Clarion University SBDC, visit www.Clarion.edu/SBDC.
The Pennsylvania Small Business Development Centers is a partnership funded, in part, by the Commonwealth of Pennsylvania, the PA Department of Community and Economic Development, the U.S. Small Business Administration, and the participating colleges and universities. All programs and services are provided on a non-discriminatory basis. SBA cannot endorse any products, opinions, or services of any external parties or activities.