Press Release – April 15, 2009

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Megan Schmidgal
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The commonwealth will reap new revenues from Micron, an Emporium-based manufacturer that posted an additional $1.2 million in sales last year.

Helping Small Businesses Proves Profitable for State

Independent Research Shows Tax Revenues Returned Far Exceed Cost of Pennsylvania Small Business Development Centers Program

PHILADELPHIA—As state lawmakers search for ways to revive Pennsylvania’s battered economy, new independent analysis finds that funding a key economic development program returns money to the state treasury.

Research confirms that the Pennsylvania Small Business Development Centers (SBDC) return an average of $6.91 for every dollar invested in the program. The explanation is simple: As businesses start, grow and expand payrolls, they contribute to state sales and income taxes. The more businesses are profitable, the more money they produce for the state.

The SBDC provides no-cost, confidential consulting and low-cost training to small businesses through 18 university- and college-based centers located throughout Pennsylvania. According to 2006-2007 analysis conducted by Dr. James Chrisman of Mississippi State University, assisted businesses returned nearly $50 million in state taxes.

Micron Research Corporation, a manufacturer of fine grain graphite in rural Cameron County, offers one example of how dynamic small firms are refilling state coffers with help from the SBDC.

A local bank referred Micron President David Trinkley to the Clarion University SBDC for help with a $2.5 million dollar expansion project in 2006. SBDC consultants helped Trinkley develop supporting financial projections, including a spreadsheet he could use to manage other aspects of the business, and assisted Micron with identifying potential new distributors and direct customers for graphite materials.

“Marketing lists created by the SBDC have led to increased sales of $200,000 so far, with expectations of more business in the future,” Trinkley confirmed.

Micron’s expansion was completed last April, adding three new full-time material operators to support growing operations. The company currently has a total of 17 employees; 16 full-time and one part-time. By year-end, Micron reported sales increased by $1.2 million.

“Even though we’re in the midst of a lengthy recession, we fully expect these revenue-positive benefits to continue accruing to the state,” noted Christian Conroy, state director of the Pennsylvania SBDC network. “Every day, the expert staff at the SBDCs are helping companies weather this downturn and retain their sales and employees. We’re also working with dislocated workers to launch new firms that will provide yet more employment and tax revenues.”

In addition to increased tax revenues, the study showed the SBDC program added nearly 2,000 businesses and 7,817 jobs to the economy. Notably, the report did not consider the continuing tax revenues generated by long-term clients after the year of analysis, nor other tax revenue sources such as corporate taxes, property taxes, unemployment taxes and social security payments.

“From a public policy standpoint, the implication of this research is that the SBDC makes a contribution to the economies of Pennsylvania and U.S.,” the report concluded.

To review the full text of the study, visit http://www.pasbdc.org/impact.

About the Pennsylvania SBDC
Since its inception in 1980, the Pennsylvania Small Business Development Centers (SBDC) has evolved into a network of 18 university-based centers and more than 100 outreach locations, operating under the guidance of the State Director located at the University of Pennsylvania. Funding support from the Commonwealth of Pennsylvania, the U.S. Small Business Administration and the SBDC host institutions enables consulting services to be provided at no charge to the client. For more information on the Pennsylvania Small Business Development Centers’ services and impact, visit www.pasbdc.org.