The “America’s Voice on Small Business” Study, jointly published by America’s SBDC and The Center for Generational Kinetics, based its findings on survey responses from a cross-section of American adults.
If the same study was conducted exclusively for South Carolina, would the findings be similar? We’ve asked South Carolina Small Business Development Centers (SC SBDC) State Director Michele Abraham to share her impressions on the state’s business-friendly climate and how South Carolina compares to the rest of the nation. She also provides recommendations for avoiding the demoralizing roadblocks (raising capital, finding assistance, accessing tools and resources) frequently mentioned in the study. What follows is a transcript of her keen insights.
South Carolina: A Hub for New Ventures
As the America’s SBDC study affirms, small businesses have the power to transform America—and South Carolina. We may be a small state, but South Carolina has all the components necessary to outpace the nation’s economic performance. The diversity of South Carolina’s economic offerings insulates our business community from the market swings that negatively affect other states whose stability hinges on a dominate sector.
Small businesses are vital to South Carolina’s economy for two essential reasons. On a micro level they can provide sustainable revenue streams, strengthen the fabric of our communities and improve the general welfare, prosperity and quality of life for all South Carolinians. Small businesses also provide vital products and services needed to serve local communities when large companies establish a presence in South Carolina.
On a macro level, South Carolina’s vibrant entrepreneurial ecosystem has established the state as a national trendsetter for workforce development, innovation and progress. As a hub for new business ventures, the Palmetto State creates jobs, boosts tax revenue and is evolving as a serious contender in the global economy.
Small Businesses Make a Big Impact
As with the nationwide study, South Carolina’s economic health is tied directly to the wellbeing of its small businesses. In fact, there are nearly 400,000 small businesses currently operating in South Carolina employing more than 740,000 of the state’s residents**. Millennials (born 1977 – 1995) comprise 27 percent of the state’s workforce, outnumbering Baby Boomers (born 1946 – 1964) by a very narrow 2.5 percent margin and Generation Xers (born 1965-1976) by a margin of five percent.
It is unanimous: the toughest barrier hindering small business starts is accessing money. Most companies in their infancy are unable to draw ample funding from banks or other financial institutions. In order to fill this gap, venture capital is sought through angel investors and other forms of direct investment. Over the past five years, South Carolina has seen some growth in the venture capital flowing into the state. This momentum in capital indicates that entrepreneurialism in South Carolina is increasing. Nonetheless, small businesses need a long-term and ongoing source of capital to fund their enterprises. When going it alone, aspiring owners are four times more likely to rely solely on banks for this cash infusion than any other source. Unfortunately, their loan requests are often denied or marginalized, resulting in a funding shortfall that can be fatal to emerging businesses. To reduce the friction encountered by companies in search of funds, I encourage South Carolina residents to visit their local SBDC before applying for a conventional loan. With centers located in all 46 counties, the SC SBDC provides convenient, no-cost guidance to clients endeavoring to raise capital. Our experienced consultants can introduce you to financing options you otherwise wouldn’t know existed, help you prepare a compelling application, determine if you qualify for any special purpose loans and intercede on your behalf to help you secure a greater portion of your requested loan amount.
Teamwork divides the task and multiplies success. For this reason, the SC SBDC operates as a cohesive network providing clients confidential access to the combined wisdom of nearly 50 professionals located in 21 centers across the state. Consultants assist both existing and startup companies by providing an expansive range of services including developing business plans, evaluating financing options, preparing loan applications, managing operations, determining marketing strategies, directing human resources and much more. Underpinning these core competencies, the SC SBDC conducts affordable workshops and champions specialty programs that foster exporting, technology development, government contracting and manufacturing.
Accessing Tools and Resources
The SC SBDC’s approach to economic development begins with a deep and abiding respect for entrepreneurs. We believe small business owners should have access to the resources and expertise that larger enterprises take for granted. To level the playing field and enable entrepreneurs to gain a foothold in the marketplace, the SC SBDC partners with a robust community of esteemed advisors, host universities and industry-affiliated organizations to provide clients a gateway to valuable resources. The SC SBDC is honored to be recognized by the Office of the Governor as a key partner in the state’s small business development initiatives. We also are privileged to be part of Team South Carolina. We do not take these distinctions for granted. On the contrary, we have worked diligently to earn and uphold our reputation as a leading small business resource serving the entire state.
In 2016 the SC SBDC helped 5,228 clients:
- Create/Retain 1,364 jobs
- Win $4.5 Billion in government contracts
- Generate $51.8 million in capital formation
- Start 157 new businesses
- Increase sales by $61 million
Looking Toward the Future
The SC SBDC is a visionary organization with its eyes trained on the future. This enables us to provide proactive insight that nurtures the growth of our clients, mitigates risks that can undermine their progress and prepares them for the journey that lies ahead. As a proponent of small businesses, we do everything within our power to place their aspirations within reach. We believe in our clients and their ability to achieve whatever they can imagine.
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**Data is based on The Small Business Profile produced by the US Small Business Administration’s Office of Advocacy. Small businesses are defined as independently owned and operated companies with fewer than 500 employees