The Impact of Sbdc Consulting Activities

Posted: 17 Nov 2009

See all articles by James J. Chrisman

James J. Chrisman

Mississippi State University - College of Business

R. Ryan Nelson

affiliation not provided to SSRN

Date Written: 1985

Abstract

The Small Business Development Center (SBDC) program was begun in 1977 by the U.S. Small Business Administration. The SBDC was initiated to fill an unmet need for consulting for small businesses. The results of two empirical studies designed to test the effectiveness of the SBCD programs in Georgia and South Carolina are reported herein.. The studies measured the contribution to tax revenues in these two states that resulted from the improvements in the performance of small businesses served by the SBDCs. Studies conducted in 1982 were based on 84 Georgia and 19 South Carolina businesses that had used the counseling services between October 1980 and Juy 1981, allowing comparison of performance before and after counseling. Data on gross sales, number of employees, and net income were gathered. Data were analyzed to calculated the average and incremental value added to Georgia and South Carolina state tax revenues (personal state income tax, taxable business income, and business income tax), as well as federal tax revenue. For Georgia, the tax-generating value of the assistance to the sample firms was $1.2 million, an excess over the $1 million dollar cost to run the program. For South Carolina, the tax revenues for the sample firms represent almost 70 percent of the cost of the program. Results offer evidence that the SBDC public sector program has been administered in a cost-effective manner in excess of the operating costs for the program; in addition, many small businesses experienced improved economic performance. (TNM)

Keywords: Economic impact, Business assistance programs, Business counseling, Tax revenues, U.S. Small Business Administration (SBA), Small Business Development Centers (SBDCs)

Suggested Citation

Chrisman, James J. and Nelson, R. Ryan, The Impact of Sbdc Consulting Activities (1985). Journal of Small Business Management, Vol. 23, Issue 3, p. 1-11 1985. Available at SSRN: https://ssrn.com/abstract=1506345

James J. Chrisman (Contact Author)

Mississippi State University - College of Business ( email )

Mississippi State, MS 39762-0964
United States

R. Ryan Nelson

affiliation not provided to SSRN

No Address Available

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