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Press Release – January 26, 2010Quick Links
Employment Growth Dependent upon Small Business SuccessALTOONA, PA—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. 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 latest Pennsylvania Department of Labor and Industry report. This is where the Small Business Development Centers (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. 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:
“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. “Our ability to respond, as we have done very successfully in the past, has been significantly reduced because of the state funding cut,” Conroy reported. “Longer wait times for fewer clients who receive less of our time results in fewer jobs saved and fewer new employment opportunities.” Dennis “Dutch” Wagner of Blair County exemplifies the types of entrepreneurially-minded individuals who choose business ownership over unemployment compensation. Wagner, experienced in truck repair and service, saw the writing on the wall when his employer sold the Altoona-based business to an out-of-state company. Knowing it was only a matter of time before the company closed down operations, he pursued buying the company. A consultant at the Saint Francis University Small Business Development Center’s Blair County Outreach Office provided guidance for the business plan, noting Wagner would need sufficient working capital to start out. Typical of the program’s comprehensive start-up services, Wagner 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. He was also advised on filing for a fictitious name, applying for a sales tax license and obtaining local permits. In the fall of 2009, Wagner’s loan request was approved through Altoona First Savings Bank, and he became official owner of the company, renamed Dutch’s Heavy Duty Truck Service. “The SBDC made an intimidating process seem simple,” Wagner remarked. Hours at the outreach office where Wagner was served have since been halved as a result of the funding cut. “Thanks to the SBDC’s help, a business was saved that may later hire down the road.” Conroy explained. “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.” ### PHOTOS AVAILABLE |
