Small business is often referred to as the backbone of the Sacramento economy, but that spine is often in need of support.
Nationwide, only half of all new business startups make it to the five-year finish line, according to the U.S. Small Business Administration. And that track record was even worse during the recession.
For Sacramento’s small businesses, more help is arriving. In the last year, a spate of new small-business programs have sprung up or been expanded, from loan centers to technology company financing to one-on-one counseling.
Business owners like Mark Frederick, president and CEO of CitiGreen Solar in Auburn, know firsthand the advantages of getting help. In two semesters this year, a team of CSUS business students developed a marketing plan for Frederick’s four-year-old company, which designs, finances and constructs solar systems for commercial customers.
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“It’s a good program. The students have really dug in and helped,” Frederick said.
The 64-year-old business owner, who has been involved in multiple energy-related firms over the years, said startup entrepreneurs “can’t be experts in everything,” and should take advantage of local resources. “The head of any small business in the Sacramento area would be a fool not to take advantage of these services,” he said.
There are nearly 114,000 small businesses in Sacramento County alone, according to the U.S. Census Bureau. Statewide, California has 3.4 million small businesses, which account for 99 percent of the state’s employers and employ 52 percent of the workforce, according to the Governor’s Office of Business and Economic Development. Generally, a small business is defined as one with fewer than 500 employees.
In the Sacramento region, the most recent development came in late September, when the federal SBA announced that the Sacramento Metro Chamber, in partnership with the College of Business Administration at California State University, Sacramento, had been awarded a contract to manage a newly formed Capital Region Small Business Development Center. The center will coordinate services to assist small businesses in eight Northern California counties – Sacramento, Yolo, Yuba, Sutter, Lake, Colusa and portions of Placer and El Dorado.
David Butler, interim executive director of the new SBDC, said he envisions “partnerships with other chambers and organizations with what we call hubs throughout the eight-county service area.”
The assistance will include help with business loans, startup advice and one-on-one counseling. Butler, for example, wants more small businesses to take advantage of available funding sources, including the SBA, banks, credit unions and micro-lenders. Likewise, he wants to tap local business expertise that’s already in place.
“Once we’re up and running, we have a whole set of resources for people to take advantage of.… We’re really fortunate to be working with the CSUS folks.”
Separately, Sacramento State’s business school has run its own Center for Small Business, or CSB, for more than four decades. Every quarter, it pairs up to 100 small-business owners with a team of business students who, under faculty supervision, help with business plans, marketing, human resources and other business needs. Since 1969, the center says it has assisted nearly 3,000 small firms in the Sacramento region.
In addition to CitiGreen Solar, Sac State students this year helped Lifetime Solutions, a Sacramento company that helps place seniors in independent care and assisted-living facilities. Students helped the company formulate a five-year business plan and a marketing plan.
Dan Bartlett, chief financial officer of Lifetime Solutions, said it was not lost on him that college students were helping a business tailored to seniors: “Working with the younger generation has worked out well. It’s always good to get a different set of eyes on a business.”
Bartlett, 60, said “it’s been an interesting shift” for him, learning to become more adept at online solutions and take advantage of social media.
Sac State’s new SBDC contract will further increase the college’s existing outreach to small businesses, said Sanjay Varshney, former dean of the CSUS College of Business Administration and director of the college’s small business center.
“We are very energized,” he said. “From staffing to funding, it’s a very exciting time. We can do a lot more with the Metro Chamber, a lot more consulting.”
Andrey Mikhailitchenko, a CSUS assistant professor, has been a business faculty adviser to numerous student teams working with local businesses. He said “the challenge is to help businesses evolve in an environment that is changing all the time.… A lot of (entrepreneurs) have optimism, but it is much more involved than that. Too many businesses fail in their first months of existence because (the operators) did not fully realize what they were getting into.… That is just one area where we can help them.”
The CSB assists companies with 20 or fewer employees. The free advice does not include legal, tax or loan issues. More information is at www.cba.csus.edu/csb or by calling (916) 278-7278.
Here are additional sources of assistance for Sacramento-area small businesses:
▪ The U.S. SBA offers numerous services, including its traditional small-business loans and the Historically Underutilized Business Zones program, which helps small businesses gain preferential access to federal procurement opportunities. The main SBA website is www.sba.gov. SBA’s Sacramento district office is at 6501 Sylvan Road, Suite 100, in Citrus Heights. More info: call (916) 735-1700.
▪ MBA students at Drexel University Sacramento offer free consulting services to local businesses, including advice on branding, business plans, management, marketing and budgeting. Drexel is at 1 Capitol Mall, Suite 260, in Sacramento. More info: (916) 325-4600 or www.sacramento.drexel.edu.
▪ The Governor’s Office of Business and Economic Development, or GO-Biz for short, helps in-state businesses and those that want to move into California. Currently, GO-Biz is offering $151 million in tax credits to companies, including $37 million in available incentives for small businesses. More info: www.business.ca.gov or call (877) 345-4633.
▪ The Sacramento-based California Capital Financial Development Corp., at 2000 O St., Suite 250, provides loans, classes and mentoring to small-business owners throughout Northern California. Its SBA Women’s Business Center hosts educational workshops, provides one-on-one assistance, promotes online learning and connects businesses with local resources. The center’s service area includes Sacramento, Yolo, Placer, El Dorado, Yuba, Sutter and San Joaquin counties. More info: www.cacapital.org or call (916) 442-1729.
▪ Davis Roots is a nonprofit “business accelerator” focused on helping startup firms in Davis with funding, low-cost work space and expertise. Advisers include startup experts and UC Davis educators. Businesses selected for the program get access to office space and to a nine-month business-launch strategy. Davis Roots takes a small equity investment in each venture. The program operates at 604 Second St. in Davis. More info: www.davisroots.org.
▪ Folsom-based Velocity Venture Capital offers its annual Entrepreneurs Showcase, where Sacramento-region startups compete to win scholarships to VVC’s Accelerator Program. The program is an eight-week “boot camp” to help entrepreneurs develop their startup firms, including the opportunity to make business pitches to potential investors. More info: www.velocityvc.com or call (888) 292-4748.
Call The Bee’s Mark Glover, (916) 321-1184.