When Goldman Sachs launched the 10,000 Small Businesses (10KSB) initiative in 2009, the investment banking leader was betting on the strength and vitality of American entrepreneurship in a time of relative economic weakness.
At that time the U.S. economy was only just stepping up to meet the difficult challenge of bouncing back from a historic financial crisis and deep recession. Was the time right for a program focused on providing education, access to capital and business support services to small entrepreneurs?
Since then, the results of 10KSB make it clear the answer was “yes.” A new progress report by Babson College on the program proves that point with hard data.
The 2018 report, “Stimulating Small Business Growth: Progress Report on Goldman Sachs’ 10,000 Small Businesses,” examines the program’s impact on more than 6,000 small business owners in the United States who have participated. To date, the program has reached more than 7,300 small business owners nationwide.
Why focus on nurturing small business? Because smaller enterprises are a principal engine of growth and productivity in the U.S. economy. The U.S. Small Business Administration estimates that the 29.6 million small businesses in America (here defined as companies with 500 employees or fewer) give jobs to 58 million workers and account for over 61% of net new employment. Goldman Sachs saw boosting this critical sector as a vital step in fueling the nation’s economic recovery.
Nearly a decade later, 10,000 Small Businesses is still going strong, and the numbers in the 2018 progress report tell the tale. Among the various metrics featured in the report, revenue growth and job creation are perhaps the most critical—and both suggest that 10,000 Small Businesses alumni benefit significantly from the program. Here’s what they found:
Revenue growth: “Within six months, over two-thirds (67.2%) of program alumni reported revenue growth. Longer term results reinforce widespread revenue growth, by 30 months almost four out of five (77.8%) alumni increased revenues.”
Job creation: “Job creation by 10,000 Small Businesses alumni is consistently strong, with 47.1% of business owners reporting job growth within six months. At 30 months after program completion, 56.5% of program alumni reported adding new jobs.”
Those numbers are significantly better than the results reported by comparable small business owners who did not participate in the program.
10,000 Small Businesses is not for the faint of heart—it demands a substantial commitment from the entrepreneur. At no financial cost to them, participants commit to more than 100 hours of classroom time, typically at a local community college.
That’s where they learn to think about their business challenges in broader terms, focusing on practical skills like accounting, negotiating, marketing and managing employees, while completing additional outside assignments and crafting a comprehensive growth plan for their company. (The curriculum was developed in an academic partnership with Babson College, which runs a highly-rated entrepreneurship training [program/course of study]).
Many entrepreneurs find that time is their most precious resource, and this course requires a sacrifice. Stepping away from the hands-on day-to-day management of a fledgling business, even for a short time, can be fretful for many owners, to say the least. Yet even with the demanding nature of the coursework commitment, 98.5% of participants complete the course, and the vast majority praise the program highly in a series of surveys completed at intervals following completion.
Along with the course curriculum focusing on core business principles, 10,000 Small Businesses also assists participants with getting access to capital, helping them to identify funding sources and to hone their pitches to potential investors and creditors.
Going beyond the classroom, the program promotes a strong focus on building the skills that keep a business moving forward, like networking with peers and embracing an ethic of active management to keep the business moving forward.
For more valuable feedback as to the program’s successes, consider the views of 10KSB alumni, who praise the curriculum for its strong focus on business fundamentals. One participant, Jess McClary of McClary Bros. Detroit, describes it as “a mini-MBA course” that pushed her to look at her craft vinegar business from “a larger perspective” and nurtured a greater sense of accountability about her company’s direction.
“As a CEO, you have to be strategic and plan,” she told Project Invested in 2016. “So now there are things that I’m looking at months or a year or two or several years in advance – you have to know where you’re going, otherwise you’ll make a lot of missteps along the way that will be very costly. It really taught me that it’s not just something that happens – you have to make it happen.”
Jill Bommarito, owner of Ethel’s Edibles in St. Claire Shores, Mich., offered a similar perspective on her completion of the Goldman small business program, noting that she developed skills in business management that allowed her to gain a deeper understanding into her company’s progress.
“The very biggest thing for me was being able to get out of the business and work on it,” she said. “Knowing the numbers, human capital, understanding how to decrease turnover, understanding how to get people to want to work with your company, what makes your company valuable, how to communicate your vision, your mission. I never thought about those things before.”
The program focuses on companies that meet a basic set of criteria. Qualified applicants should:
- Be the owner or co-owner of the business;
- Have at least four employees;
- Have been in operation at least two years; and
- Have annual revenues of more than $150,000 for the most recent fiscal year.
The program has served businesses generating total revenues of more than $9 billion and employing more than 130,000 workers. And it now reaches coast to coast: 10KSB has expanded to education sites in 14 U.S. metro areas, including Baltimore, Chicago, Cleveland, Dallas-Fort Worth, Detroit, Houston, Long Beach, Los Angeles, Miami, New Orleans, Philadelphia, New York, Salt Lake City and the state of Rhode Island. Additional capital partnerships have been forged in other cities and states to help coordinate small business investing.
Launching and running a small business is a tough challenge, but the reality is that entrepreneurship is the backbone of the U.S. economy, driving growth, innovation and job creation. Initiatives like 10,000 Small Businesses are critically important to unlocking entrepreneurial potential in communities across the nation.
Also on Project Invested: