Women's business center programs post growth

A new report released Sept. 1 shows women’s business centers across the country are gaining momentum. Businesses counseled by women’s business centers generated an estimated economic impact of $500 million in gross receipts, and $51.4 million in profits, between 2001 and 2003. Over that period, women’s business center clients reported starting 6,660 new firms and creating 12,719 new jobs.

The centers surveyed were those that received funding from the U.S. Small Business Administration. Between 2001 and 2003, the SBA provided $37 million in funding to up to 92 women’s business centers across the country. The analysis of data provided by these centers to the SBA shows that the investment is paying off in increasing numbers of clients counseled, businesses started and new jobs created.

The National Women’s Business Council report, “Analyzing the Impact of the Women’s Business Center Program,” focuses on women’s business center program data from fiscal years 2001, 2002 and 2003. While funding for the program remained essentially flat – $12 million in 2001 and $12.5 million in 2003, the number of client contacts rose 61percent, the number of clients served nearly doubled – a 91percent increase, and the number of new firms created increased by 376 percent.

“This important new analysis clearly shows that the women’s business center program is finding its stride,” said Marilyn Carlson Nelson, chairman and CEO of Carlson Companies and chair of the National Women’s Business Council.

“The growth in the number of clients served, new businesses started and jobs being created is definitely helping to fuel the tremendous growth in women’s entrepreneurship we are seeing across the country. Women-owned businesses are making a vital contribution to this nation’s economy, and women’s business centers are playing an invaluable role in helping these businesses start and grow,” Nelson said.

The Women’s Business Center program got its start in the Women’s Business Ownership Act of 1988, which also established the National Women’s Business Council. The program currently provides support to 88 centers with a budget of $12.5 million in fiscal year 2004.

The program was designed to pay particular attention to the needs of underserved populations – socially and economically disadvantaged women – and the new report shows that the program is reaching that audience. While one in five (20 percent) existing majority-owned, privately held, women-owned firms is owned by a woman or women of color, fully 46 percent of the clients of women’s business centers are women of color.

And, over the 2001-03 period, two-thirds of the women’s business centers reported an increase in the share of minority clients served.

Other results

The analysis also looked at what factors influence the success of particular women’s business centers, to attempt to uncover a model for successful program development. The analysis found that there is no single best model for program success. For example:

• While urban centers counsel and train a greater number of clients, non-urban locations create more jobs.

• Independent centers trained more clients, while centers that are affiliated with other local economic development agencies served an information-sharing role, reporting a greater number of contacts.

The analysis also looked at how much activity a women’s business center must undertake to generate clients, start new businesses and create new jobs.

SBA program in limbo

The SBA’s Women’s Business Center program provides between $111,000 and $150,000 per year to qualified nonprofit organizations seeking to counsel and train nascent and new business owners – most of them women. These organizations must match that federal support with funds from other sources.

Authorization for the program is now bound up in Congressional debate about the reauthorization of the SBA. Some of the agency’s programs – including the WBC program – currently lack statutory authority to carry out their activities.

Especially at risk is funding for 53 women’s business centers that have been in operation for more than five years – the so-called sustainability centers. There has been much discussion about what share of the program budget should be directed to existing centers versus funding new centers. While the program is currently in limbo, the SBA has been able to allocate only $5.1 million of its $12.5 million budget, to 35 centers that are within their first five years of operation. The remaining 53 centers have not yet received word concerning their FY 2004 funding, nor has the SBA announced funding for any new women’s business centers. The next few weeks are critical for the program, as the current federal fiscal year comes to a close on Sept. 30.