This is the second column in a series by SBA Administrator Karen Mills for On Small Business. Check back to the site each Monday for the latest entry.
One of the central questions confronting policymakers today is: How do we accelerate the pace of job creation?
While start-ups receive a great deal of attention, there is another segment of businesses that can fuel economic growth—existing establishments.
At the U.S. Small Business Administration (SBA), we recently crunched the numbers on existing establishments and found that those that are growing created 8.7 million private sector jobs between March 2011 and March 2012, which is the most recent data available.
And when you look at the landscape, you see that there are millions of companies like these across the country that are ready to scale their operations, plug into supply chains, export overseas and add to their workforce. All they need are the right tools, the right opportunities and the right resources to make it happen.
These include manufacturing businesses like West Tennessee Ornamental Door Company, whose owner purchased the business in 2001. He secured SBA loans to expand the facility and add workers. Then, to take his business to the next level, he recently enrolled in SBA’s intensive entrepreneurship education program. This program allowed him to refine his business plan and to work with experienced mentors and counselors who understand the needs of his business.
Today, West Tennessee Ornamental Door Company is growing and has plans to further increase operations and add workers.
There are enormous opportunities for these types of businesses to sell more of their products and services to large corporations. As was highlighted in the first blog in this series, suppliers have reported revenue growth of more than 250 percent just a few years after selling their first products to a large corporation, while employment typically increased by more than 150 percent. These firms also can rapidly increase their operations by targeting lucrative export markets around the globe.
One of the best ways to help entrepreneurs scale their businesses and target new market opportunities is through increased entrepreneurial education. Just as we need an emphasis on science, technology, engineering and mathematics, there are specific skills needed to be a successful entrepreneur.
To make this happen, the President’s FY 2014 budget invests $40 million in entrepreneurial education, including an intensive small business leadership program, which will be modeled as a public private partnership and tailored specifically for the needs of these established businesses.
The program will include immersion in core business concepts such as accounting and finance tutorials, opportunities for peer review of business plans, introductions to capital access and new revenue opportunities, mentorship and the development of targeted growth plans for business owners. It builds on proven SBA programs and draws on best practices from leading private sector and non-profit entrepreneurial development programs.
Entrepreneurial education ensures that businesses have a platform for long-term success. And the return on investment will be jobs, innovative products and an economy firing on all cylinders.
Part 1 of this series: America’s four most critical small business sectors
Karen G. Mills is the Administrator of the U.S. Small Business Administration. Mills was appointed by President Obama in 2009 and has served on his cabinet since 2012.