BABSON SURVEY FINDS GRADUATES OF GOLDMAN SACHS 10,000 SMALL BUSINESSES GROWING, CREATING JOBS
(Wellesley, MA) February 13, 2014…Babson College today released Stimulating Small Business Growth: Progress Report on Goldman Sachs 10,000 Small Businesses.
Developed by Babson College, the report analyzes small business growth during, and after, their participation in the 10,000 Small Businesses program, with findings showing that over 63% of program participants have increased their revenues and nearly half are adding new jobs. This report is the first detailed look at how and why 10,000 Small Businesses is helping entrepreneurs across the Unites States grow their businesses and create jobs.
“Through participation in Goldman Sachs 10,000 Small Businesses, small business owners across the United States are creating new jobs and increasing their revenues,” said Babson College President Dr. Kerry Murphy Healey. “The growth oriented, practical, peer-to-peer driven classroom experience, together with business support services, are driving participants to change their attitudes and business practices, helping them to achieve significant growth; growth that is critically important to strengthening the U.S. economy.”
“We are pleased by the early results in this report showing that 10,000 Small Businesses graduates are creating jobs and growing their businesses,” said Dina Habib Powell, President of the Goldman Sachs Foundation. “We appreciate the work Babson has put in to this program from the beginning and look forward to seeing small businesses grow as the program continues.”
Among theReport’s key findings:
• Between their start in the program and six months after graduation, the majority of participants (63.7 percent) increased their revenues compared to only 37 percent of U.S. small businesses surveyed by the National Small Businesses Association (NSBA) that reported increasing their revenues (July 2012 – July 2013). In fact, by the time participants are six months out, more than 20 percent report increasing their revenues by more than 50 percent.
• Only six months after graduating from the program, nearly half (44.8 percent) of 10,000 Small Businessesparticipants reported adding new jobs compared to only 18 percent of U.S. small businesses surveyed by the National Small Businesses Association (NSBA) that reported increasing their number of employees during the same period (July 2012 – July 2013).
• The average amount of funding from local area banks received by participants increased by 258 percent, from $287,180 prior to joining the program to $1,028,391 after graduation. In addition to preparing small business owners to access this traditional form of capital, 10,000 Small Businesses has made available nearly $150 million of capital to small business owners across the country through Community Development Financial Institutions and other nonprofit-based lenders. To date, 10,000 Small Businesses capital partners have originated over 317 loans to small businesses in 15 states, totaling over $63 million.
• One unexpected finding of the program relates to gender differences in the relative amounts of those salaries. Consistent with national figures, at the start of their participation in the 10,000 Small Businesses program, female participants, on average, pay themselves 80 percent of the salary of male participants. However, six months after graduating from the program, female gradates’ average salary rises to 92 percent of male graduates’ average salary, reducing the gender gap by 60 percent.
• The program has a graduation rate of 99%, and findings have showed that 80% of the small business owners in the program have done or are doing business with each other.
“Based on these outcomes, it is clear that Goldman Sachs 10,000 Small Businesses is demonstrating the power of investing in small business owners,” commented Patricia G. Greene, Babson College Professor, National Academic Director for Goldman Sachs 10,000 Small Businesses and Lead Author of the Report. “These results clearly indicate that, given the right mix of training and support, America’s small businesses can grow their companies and create jobs in the communities where they live and work.”
According to the U.S. Small Business Administration and the U.S. Bureau of Labor Statistics, over the last two decades small businesses have created two out of every three net new jobs and currently employ about 60 million Americans, half of the private sector workforce.
Goldman Sachs 10,000 Small Businesses is a $500 million, national initiative launched by Goldman Sachs and the Goldman Sachs Foundation in 2009 to unlock the job-creation potential of small businesses across the United States by providing entrepreneurs with an integrated program of practical business and management education, access to capital, and business support services.
Babson College leads on curriculum design and development, faculty and business advisor training, alumni services and program measurement. In turn, Babson works with community colleges and other local higher education intuitions which offer their expertise in teaching adult learners, supporting entrepreneurship programs, and serving the communities targeted by the program. To date, over 2,000 small business owners have participated in the program.
The program is active in urban and rural communities across the United States. Sites include Chicago, Cleveland, Detroit, Houston, Long Beach, Los Angeles, Miami, New Orleans, New York, Philadelphia and Salt Lake City. Access to capital is also available in parts of seven states: Kentucky, Maine, Montana, Oregon, Tennessee, Virginia and Washington. In 2013, the first national program, 10,000 Small Businesses at Babson College, was announced to expand from locally-focused education program sites to small businesses across the country through a blend of online and in-person sessions.
The Report findings are based on information collected through the 10,000 Small Businesses measurement and evaluation system. This system allows the program delivery team to share information on the program participants, their businesses, and some of the changes that occurred over the course of the program, and at six months after graduation. The report includes information on the first approximately 1,300 small business owners who have completed the program.
Goldman Sachs 10,000 Small Businesses is now on Twitter: @GS_10KSmallBiz