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February 10, 2020

Maine small business growth strong, thriving, report shows

Photo / Tim Greenway Mark Delisle, state director of Maine Small Business Development Centers, says the 133 new business starts the centers helped with across the state in 2019 are part of the foundation for job growth.

Maine Small Business Development Centers helped entrepreneurs launch 133 businesses in the state last year, creating more than 400 jobs.

In its annual report, the SBDC, which advises those launching or running small businesses and hooks them up with resources, found that 72% of its clients are still in business after three years. The overall average for the state for businesses that were still open in 2019 after opening in 2016, is 64.3%, and the national average is 61.3%, according to the U.S. Bureau of Labor Statistics

While the centers' clients are only a small part of Maine's 147,270 small businesses, the success of SBDC clients is part of an atmosphere across the state that supports small business, said Mark Delisle, director of the organization. The centers are one cog in the wheel in a state where business resources, both government and nonprofits are active.

"There's certainly a lot of access to resources," Delisle told Mainebiz. "It's a pretty good ecosystem, which is good, because we rely on small businesses in Maine. It's a small business state and small businesses generally do better than they do in other states."

The nonprofit Maine SBDC, which offers many of its services at no charge, is a  program of the U.S. Small Business Administration, the Maine Department of Economic and Community Development and the University of Southern Maine. In 2019, its advisors at 10 centers across Maine helped business owners and startups create 418 jobs, save 182 jobs and generate $26.8 million in capital from investment, lender financing and other sources to start or grow their businesses.

The organization's clients show a $3.18 per dollar return on investment in incremental state and federal tax revenue, according to an annual evaluation by James J. Chrisman at Mississippi State University. 

Measures of success

Delisle said while the SBDC report focuses on business creation and capital access, the number that most clearly measures success is job growth. "The other two feed into it, but that's the true indicator of economic growth," he said.

Business starts, a number that's increased over the past few years in Maine, feed job growth more consistently than expansion does, he said.

The numbers for the centers over the past five years are:

  • 2015: 102 business starts; 611 jobs [388 created, 231 saved]; $37.6 million in capital accessed.
  • 2016: 120 business starts; 1,006 jobs [626 created, 380 saved]; $47.1 million in capital accessed.
  • 2017: 98 business starts; 661 jobs [338 created; 323 saved]; $44 million in capital accessed.
  • 2018: 136 business starts; 810 jobs [461 created; 349 saved]; $39 million in capital accessed.
  • 2019: 133 business starts; 600 jobs [418 created; 182 saved]; $26.8 million in capital accessed

The jobs cited in the report are direct jobs, he said, and the jobs saved, or retained, are at businesses where owners said they would close or have layoffs without help the SBDC could provide.

The reports numbers all come from written client attribution, he said. "We don't do surveys, we don't extrapolate."

Of the SBDC's 1,553 clients in 2019, 64.4% were starting a business and 35.6% were already in business; 48.5% were women, 8.4% were minorities and 7.1% were veterans.

The most popular type of business deal with by the organization was retail, which represented 21.2% of its clients. After that, was home-based businesses, at 14.8%, followed by manufacturing, at 7.7%.

More resources coming

Congress agreed in September to reauthorize the SBDCs, in a bill sponsored by U.S. Rep. Jared Golden, D-Maine 2nd District.

The bill calls for raising available funding for the program nationally from $135 million to $175 million, but Congress still has to appropriate the funding. Delisle said there's a balance to what the organization can do, given the money available.

Its budget last year was $2,052,199, and its expenditures were the same. The largest chunks of its funding came from the SBA and the Maine DECD, which each contributed $727,778, for 36% each of the total. The rest came from the University of Southern Maine, $120,991, and host organizations, a federal Community Development Block Grant, state contracts and program income.

While the highest number of businesses started by SBDC clients — 29, with 108 jobs created or saved — was in Cumberland County, the state's most populous at 292,500, the second highest number was in northern Aroostook County, with 19 business starts and 92 jobs created or saved and a population of 67,600.

As good as its people

Delisle said that areas with high numbers have as much to do with available personnel as they do with geography and the business activity in a region.

The SBDC's advisor in Aroostook County, Josh Nadeau, of Northern Maine Development Commission, has built a strong foundation for area businesses, Delisle said. Nadeau was recognized by Momentum Aroostook this year as an "Aroostook Achiever."

Ann McAlhany, the advisor for Penobscot and Piscataquis counties, was named the national SBDC's "Maine State Star" for 2019. Penobscot County was fourth in the state with businesses started, at 14, and 43 jobs were created or saved.

The organization, based at USM, has four full-time staff, including Delisle, and 16 advisors at its 10 locations across the state. There have been some personnel changes in the past year or two because of retirements and other factors, which may count for a dip in some of the numbers he said. There are new advsiors at four of the 10 centers — in Auburn, with Lori Allen and Raynor Large; Portland, with Susan Desgrosseilliers; Biddeford, with Anne Lancaster; and Bangor, with Alison Lane.

“We are only as good as our people," he said. "These results would not be possible without our incredible team."

Delisle said he's excited about 2020 and what the organization can accomplish, built on the growing success it's had at helping develop new businesses.

"The numbers are really above what's expected for the program, given the state's population," he said. "That's one new business every three days, and that's a lot of job creation."

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