The Arkansas Small Business and Technology Development Center’s assistance helped businesses add millions of dollars in sales revenues and capital investment, according to a new study of the program’s economic impact.
Sales growth was 67.1% higher for client businesses compared to the average business in the state, the study found.
Clients with established businesses had total sales of $374.9 million and an average increase of almost $1.2 million for the year, while clients who started businesses recorded total sales of $22 million and average sales of $68,495.
Client businesses also secured $183 million in loans and other capital financing with the center’s help last year.
The study by Dr. James J. Chrisman calculated changes in client businesses’ sales and employment data from the year they received assistance to the following year, then compared the results with the average changes for all Arkansas businesses during the same time period.
Clients who received five or more hours of consulting in 2018 were asked about sales and employment changes in 2019, financing obtained and their opinion of ASBTDC services.
According to Chrisman’s analysis, the businesses produced $80.66 in new capital for every dollar expended on the ASBTDC. Clients generated a return on investment of $12.82 for every dollar invested in the ASBTDC program, the study concluded.
Prospective and current business owners receive consulting and access to a range of resources at no cost through the center’s statewide network of offices. The University of Arkansas at Little Rock and six other state universities fund the program, in partnership with the U.S. Small Business Administration.
“Thanks to our team of professionals across the state, we are able to ensure that the investment provided by our funding partners continues to generate strong economic impact for the state of Arkansas,” said Laura Fine, state director.
Client businesses also excelled in another important economic measure: jobs.
Employment growth among ASBTDC clients was 39%, compared to 0.8% for the average Arkansas business last year. Businesses said they added 3,147 jobs and retained another 3,588 existing jobs, thanks to the center’s assistance.
The study also found that the center helped businesses generate $19.3 million in state tax revenues and $5.4 million in federal tax revenues in 2019.
While the study period was pre-pandemic, Fine says the results are relevant because they demonstrate the value of the center’s in-depth consulting services to individual businesses as well as to local communities and all of Arkansas.
The center has consulted with more than 2,800 prospective and current business owners in 2020.
“This year marks ASBTDC’s 40th year of service to Arkansas entrepreneurs and small businesses. As we celebrate this milestone, I am proud of our past accomplishments and our work this year helping small businesses through the pandemic,” she said.
“Our sights are set on helping the next generation of entrepreneurs and small businesses achieve their dreams, which will in turn strengthen and grow our local and state economies.”
Unique among the state’s economic development organizations, ASBTDC services are available to businesses from any county in Arkansas, in any industry sector, at any stage of development. Due to the pandemic, service delivery is fully virtual.
Chrisman, the study’s author, is an independent consultant based in Starkville, Miss.