Iowa State University

Iowa State University
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News Service

News Service:

Annette Hacker, manager,
(515) 294-3720

Office: (515) 294-4777

1-11-05

Contacts:

Jon Ryan, Iowa Small Business Development Center, (515) 294-2030

Kevin Brown, News Service, (515) 294-8986

Studies show value of Iowa's Small Business Development Centers

AMES, Iowa -- The Iowa Small Business Development Centers (SBDC) have a significant economic impact on Iowa's tax revenues, job creation and retention, capital acquisition and sales growth, according to two recent independent studies.

The Iowa SBDC network is based in Iowa State University's College of Business and has 13 centers covering all 99 Iowa counties.

James Chrisman, professor of management and information systems at Mississippi State University, has studied Iowa's SBDC program for several years and prepared the two studies. Chrisman looked at Iowa entrepreneurs who received between three and five hours of counseling (medium-term clients), or five or more hours of counseling (long-term clients), by the SBDC.

Both studies showed the Iowa SBDC returned, in one year, additional taxes at the state and federal levels greater than the total annual cost of Iowa's SBDC program.

A total of 2,044 jobs were created or retained in the year studied, according to Chrisman, who regularly reviews about one-third of SBDC programs nationally to determine results of counseling.

The studies also showed an increase in sales of $39.4 million for medium-term clients and an increase of $17 million for long-term clients. Long-term clients are typically older, more established businesses. Sales retained (sales that a business kept but might have lost without SBDC counseling) for medium-term and long-term clients totaled $9.7 million and $25.7 million, respectively, for the first full year after counseling, for a total of $35.4 million.

SBDC medium-term clients grew 33 percent faster and long-term clients 25 percent faster than those businesses that had no contact with the SBDC.

In the first full year after counseling, SBDC medium-term clients generated $3.89 in taxes for every programming dollar spent, a return on investment of nearly four to one. Long-term SBDC clients generated $2.06 in taxes per dollar of SBDC programming, a return of more than two to one.

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Quick look

The Iowa Small Business Development Centers (SBDC) have a significant economic impact on Iowa's tax revenues, job creation and retention, capital acquisition and sales growth, according to two recent independent studies. The Iowa SBDC network is based in the College of Business and has 13 centers covering all 99 Iowa counties.