ST. GEORGE — Despite COVID-19 hampering robust business development, there are federal, state and local advocates that are hell-bent on holding off the stagnation of new business growth predicted by some economists.
For more than two decades, the Southern Utah office of America’s Small Business Development Center – part of the United States Small Business Administration (SBA) – has shepherded entrepreneurs through regulatory hurdles and the logistical morass of starting a business.
There are more than 1,000 SBDC chapters throughout the U.S., with 14 in Utah.
In 1979, $2.4 million in federal funding was provided to 16 Small Business Development Centers that included Utah, Arkansas, the District of Columbia, Minnesota, Pennsylvania, South Carolina and Washington.
According to internal documentation, the Utah SBDC budget has grown to $2.8 million and continues to provide a “significant” return on investment for business development throughout the state.
Services include assisting the development of a sustainable business plan focused on the critical needs of proper accounting.
The center also factors in cash flow management practices of a startup, how to overcome a wafer-thin capital budget, tax planning, marketing, international trade, embracing an e-commerce approach to sales and other services.
The SBDC is a one-stop-shop that provides “time-proven techniques” designed to give first-time business owners, as well as someone established in their industry, a leg up on achieving long term success.
According to the latest data, the St. George SBDC has helped to create more than 350 businesses since 2013 by leveraging more than $120 million in capital development bank loans, creating more than 1,700 jobs.
“Through our funding from the SBA and our local host, Dixie Technical College, we take anyone who walks through the door looking for business services,” said Jeff Mather, SBDC regional director.
Services are provided free of charge and are confidential.
“Our customers range from someone with $1,000 coming in to a company with a multi-million dollar business development investment,” Mather said. “It’s a matter and scale and what someone’s needs are.”
Lennart Erickson, St. George SBDC associate regional director, said the key to success is a well-throughout business plan.
“You have to be able to lay out sales expectation and cost of sales to investors or to the banks,” Erickson said. “We can’t’ do everything for them. They may have a lot of gaps which we can help fill but the banks want assurances that people know what they are doing and why they are making a good investment.”
Possessing a sound mind for business is not the only hurdle facing entrepreneurs.
Both Erickson and Mather say the biggest game-changer is the lingering COVID-19 pandemic.
Across the country, more small businesses are reporting reopening and are cautiously optimistic about the future despite concerns about the fall resurgence of the coronavirus, according to the latest MetLife & U.S. Chamber of Commerce Small Business coronavirus impact survey conducted in July.
According to the report, more small businesses that temporarily closed at some point since the pandemic began to reopen in July (69%) than in late May (43%).
Of that number, 86% of small businesses surveyed reported they were either fully (52%) or partially (34%) open. This was up seven points from 79% in May.
Although optimistic about the future, business owners are also concerned about the permanent losses among their ranks.
According to many surveys, small businesses are at great risk as a result of the pandemic.
According to Yelp Inc., more than 80,000 businesses nationwide permanently shuttered their doors between March 1 and July 25.
Businesses with fewer than 500 employees account for approximately 44% of U.S. economic activity, according to the Small Business Administration.
About 800 small businesses filed for Chapter 11 bankruptcy from mid-February to July 31, 2020, according to the American Bankruptcy Institute, and the trade group expects by the end of the year the number of bankruptcy total could rise 36% from 2019.
Locally, through the SBDC and SBA, more than $8 million in COVID stimulus funding was allocated to support businesses from closing or filing for bankruptcy.
“To be able to turn that kind of funding around in 30 days and keep employees working is a big thing,” Mather said. “The federal assistance probably helped a lot of our businesses keep the lights on.”
Still, there has been pain experienced in Southern Utah – especially throughout tourism-dependent industries, Mather added.
“We had one client who had $300,000 worth of business booked in March and three weeks later they had zero,” he said. “We’re still dealing with those types of challenges … and some of our businesses that closed are gone forever, but there is a future after COVID.”
“The future down here is very bright,” Erickson said. “In Southern Utah, we kind of know who is going to shut down and who’s not going to shut down. The businesses that didn’t stand a chance of surviving are pretty much already gone … but it’s not doom and gloom. We are resourceful and businesses have learned to pivot. St. George remains a very positive place for growth.”
On the flip side, Mather added, where one business failure created a vacuum it also created an opportunity for another business to fill the need that opened up.
“Don’t bet against America,” Mather said. “We get things figured out.”
Businesses are flocking to Southern Utah, he added, because of its proximity of sales opportunities in the large metropolitan areas of the Wasatch Front, California, Arizona and Nevada. The region’s temperate climate and outdoor lifestyle, and the state’s favorable tax attitudes toward businesses are also factors in the area’s growth, Mather said.
“If people can move here, they will come,” Mather added. “Utah is one of two states in the country that are extremely business-friendly. You approach the city council. They want to help you get your business license, they want to help you build your building, they don’t want to push you down like so many other Western states want to do. Living in Southern Utah really sells itself.”
Since its inception the St. George SBDC has served more than 2,700 clients with an average of six new clients per month; however, that figure has spiked to 25 new clients in recent months because of various reasons, Mather said.
To meet the demand, whether the company is large or small, Mather added, is the ability of the SBDC to draw upon the resources and best practices of other centers across the country.
“We offer a custom fit program,” Mather said. “We have a lot of resources that we can bring to bear. We are positive about the future and the doors are still open here to help businesses.”
For more information on the St. George SBDC click here.
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