The Best Advice May Still Be Free

Small Business Development Centers' free advice proves helpful to clients.

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Recent studies show that clients of the small-business-development centers' counseling services show significant revenue and job growth after just one year of help. The counseling program was established in 1977 to help small businesses by leveraging federal resources with those of the state, academic community, and private sector. Each SBDC is a partnership between higher education, state government, the Small Business Administration, and the private sector.

SBDCs provide a variety of services for growing companies, ranging from counseling, training, and research help for start-ups to export and expansion assistance or technology transfer for mature enterprises. Counseling is by far the most requested form of assistance (on general business planning, technical matters, and financial affairs, in descending order of popularity), followed by training.

Federal funding for SBDCs has risen annually, from $360,000 for 9 centers in fiscal year 197778 to $67 million for 56 centers (and about 700 subcenters) in fiscal year 199293.

Elizabeth Gatewood, director of the University of Houston's SBDC, conducts an annual nationwide "Impact Study" on SBDC clients, comparing their one-year growth before and after they've received SBDC counseling. Some findings from her 1991 study:

Percentage Increase in Rate of Growth After a Year of SBDC Counseling

"The impact is even more impressive when compared with the cost of counseling these clients," says Gatewood, who projects long-term clients have generated federal and state revenues over 18 times greater than the cost of their counseling.

-- Alessandra Bianchi

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