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Jon Ryan, Iowa Small Business Development Center, (515) 292-6351
Kevin Brown, News Service, (515) 294-8986


AMES, Iowa -- Iowa's Small Business Development Centers (SBDC) have a significant impact on Iowa tax revenues, job creation and retention, capital acquisition, and increased sales, according to an independent study of the impact of SBDCs on state economies across the country.

James Chrisman, a professor of management and information systems in the College of Business and Industry at Mississippi State University, issues state by state reports annually.

The Iowa SBDC centers, based at Iowa State University, have 14 locations at Regents' and private universities, community colleges and chambers of commerce. The SBDC provides no-charge counseling and information to owners and would-be owners of small and mid-size businesses.

The survey analyzes sales, employment changes, and financing obtained by both existing businesses and prospective business owners who actually opened a new venture. These clients received five or more hours of counseling from the Iowa SBDC in 2001, with survey results identified in 2003.

According to the Chrisman study, long-term SBDC clients in Iowa generated more than $28 million in incremental sales and 648 new jobs. Additionally, nearly $63 million in sales and 209 jobs were saved due to SBDC counseling.

Increased sales of established business clients yielded more than $1 million in taxes. Almost $3 million in taxes came from new businesses started with SBDC counseling. Out of nearly $4 million in tax revenues, $2.4 million went to the federal government and nearly $1.5 million to the State of Iowa.

As a result of SBDC counseling, Iowa clients received an estimated $25 million in financing. Thus, for every dollar expended on the Iowa SBDC program, $13.06 in new capital was raised from external sources.

About 70 percent of the clients felt they would have been unable to obtain counseling of similar quality from a private consultant for a price they would be willing to pay.

Overall, the Iowa SBDC-counseled clients generated a return of $2.09 for every dollar spent in just the first year after counseling.

"The study concludes that the Iowa SBDC is both effective and efficient in the discharging of its charter," Chrisman said.


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