New Jersey Small Business Development Centers Network Opens Small Business Week by Calling on State Lawmakers to Make Small Business Assistance a Top Priority
National Survey Finds New Jersey’s Investment in its State SBDC Network is Among the Lowest in the Country
June 17, 2013 (Newark, N.J.) – As National Small Business Week opens, the New Jersey Small Business Development Centers (NJSBDC) Network, a key resource for small businesses in New Jersey, is noted for delivering a high return on government investments in small business growth in the Garden State, even though the NJSBDC’s funding investment from the state of New Jersey is much lower than the average funding level allocated to SBDCs across the country.
A national survey of state SBDC networks across the nation finds that while the average state funding investment in SBDC networks throughout the country is $1.1 million, New Jersey’s investment ranks much lower, at $250,000. Yet, the leverage for the NJSBDC’s program investment is high when it comes to economic impact, business starts, jobs created and saved and the natural boost to the state economy.
The New Jersey Legislature had increased funding from $500,000 to $1 million several years ago and during deficit ridden times during the Corzine Administration; the program’s funding level had been targeted for elimination. The Legislature, however, restored it to half a million. Shortly, thereafter, it was frozen at $250,000 and has remained at that level for several budget cycles, including this year’s proposed budget by Governor Chris Christie.
“Our network has the support of the Legislature and Administration,” said Brenda Hopper, NJSBDC Chief Executive Officer and State Director. “But, we should strive to increase support especially when small businesses are traditionally the energy behind an economic recovery.”
Governor Chris Christie’s proposed budget for fiscal 2013-2014 calls for an allocation of $250,000 for the NJSBDC network, which operates centers at 12 locations
throughout New Jersey. The Governor’s budget puts an emphasis on business growth and private sector job creation. By increasing resources for small business, New Jersey will close the gap between competing states like Georgia which allocates $3 million to its state SBDC network.
“As many of our state legislative leaders from both parties say over and over again, small businesses need more assistance now than ever,” added Deborah Smarth, NJSBDC Chief Operating Officer and Associate State Director. “This is even more important during the Sandy recovery and rebuilding. The greater the level of investment and leveraged funding for small business assistance, the higher the rate of return is to the state.”
“We have real client success stories,” Smarth continued. “With this year’s automatic congressional sequestration cut to the national program, the reduced resources level from the SBA core grant –which is matched with state funding and other sources – constrains activities to help small business owners.”
“In addition to our core mission services, NJSBDC’s offices statewide are also serving as a pivotal resource for many small businesses hit hard by Super Storm Sandy,” Hopper said. “Moving New Jersey’s economy forward requires solid commitment in the long-term.”
The national Small Business Development Centers program was cited for model best practices including impact metrics, accreditation standards, and a high rate of return on investment, by a 2012 U.S. Government Accountability Office (GAO) study of 52 economic development and entrepreneurial programs.
For every dollar the federal government invests in the national program, two dollars are returned.
According to a recent May newspaper account, the state has spent several billions of dollars on business incentive grants through the Business Employment Incentive Program since the program’s inception, which amounts to about $22,044 per job. That program primarily provides grants to mid-size and larger companies for job generation. This year’s appropriation in the proposed state budget for the grant program is $175 million.
“Surely, the Legislature and Executive branch can invest more in small businesses and entrepreneurs,” said Smarth. “According to a recent independent study on SBDC’s five plus hour counseled clients, NJSBDC’s cost per created job and saved job is considerably lower.”
The study indicated that through the NJSBDC Network, the cost per created job stood at $1,476 while the cost per saved job was $2,296.
“I would say that this is a good rate of return on the investment in small business assistance, creating sustainable and long-term job generation,” added Hopper.
The core grant matched with state dollars and other private/public sponsorships empowers the NJSBDC Network to deliver comprehensive assistance year after year through its more than three decades of operation in delivering small business assistance services.
“Proper investments in comprehensive assistance to small business owners through the NJSBDC Network helps New Jersey’s economy prosper even in these most challenging times,” said Hopper.
This non-profit network is a federal-state-educational partnership. Its expert staff and business practitioners help small business owners and entrepreneurs with every stage of business development and growth. Small businesses are served at its 12 locations throughout the state serving businesses in all 21 counties. The network headquarters is located at the Rutgers Business School in Newark NJ. As part of a national network of SBDCs, more than 1,000 centers and satellite offices throughout the country serve and assist small businesses, saving and creating jobs across the nation. For more information, visit www.njsbdc.com.