Academic journal article Journal of Business and Entrepreneurship

Clients' Perceptions of the Effectiveness of Small Business Development Centers

Academic journal article Journal of Business and Entrepreneurship

Clients' Perceptions of the Effectiveness of Small Business Development Centers

Article excerpt

ABSTRACT

Small Business Development Centers (SBDCs) are the premier service providers to small businesses nationwide. Despite the importance of their mission to the economy and job creation, little work has been done to objectively analyze their effectiveness. Prior research of this type has been prepared almost exclusively by SBDC consultants or SBDC personnel. Our research seeks to evaluate the performance of two SBDCs as indicated by their clients' perceptions of their effectiveness. We find that client satisfaction is somewhat lower than prior research suggests. We also find that female clients, less educated clients, and very successful clients rated SBDC services significantly lower.

INTRODUCTION

Small businesses continue to drive the U.S. economy. Small businesses contribute greatly to the economy and society as a whole through job creation, innovation, and increased competition. Recent research indicates a direct, positive correlation between entrepreneurial activity and growth in GDP (Dickerson & Romney, 1999).

Providing assistance and training to small firms and pre-venture entrepreneurs are significant activities for continued economic growth and societal gains. The premier provider of such services is the nationwide network of Small Business Development Centers (SBDCs). Significant funding has been used to support SBDCs and they are relied upon by small business owners as well as nascent entrepreneurs seeking advice on business feasibility, financing, and planning (Allerton, 1996). Evidence suggests that small businesses rely on the services of the SBDC more than those of any other service provider (Kuratko, Hornsby, & Naffzinger, 1999).

Despite the apparent importance of SBDCs in encouraging entrepreneurial activity and economic growth, little objective research has been published in academic journals concerning clients' perceptions of their effectiveness in accomplishing their mission. The few studies that do address this important issue were for the most part either prepared and written by consultants to the SBDC (Chrisman, Hoy, & Robinson, 1987; Chrisman & Katrishen, 1994,1995) or prepared internally in specific SBDCs (e.g., Client Satisfaction Survey, Virginia Small Business Development Center Network, 1997). The authors believe there is a genuine need for an external, objective appraisal of SBDC clients' evaluation of the effectiveness of SBDCs.

The research mentioned above restricted the reporting of client satisfaction to overall ratings with no analysis of differences in perceptions among categories of clients. There are ample reasons, however, why such analyses could potentially provide useful information to the SBDCs, and would be instrumental in organizing and presenting their services depending on their target audience. It is quite possible, for example, that minorities and women perceive the SBDC differently than the general population of clients. The purpose of the research reported herein is to provide an objective analysis of SBDC effectiveness, as indicated by the perceptions of their clients, as well as explore differences in these perceptions based on client characteristics.

BACKGROUND: SBDC ROLES AND GOALS

Since 1977 significant funding has been channeled to Small Business Development Centers (SBDCs) to provide advice and guidance for small businesses (MacDonald & Cook, 1997). SBDCs are non-profit organizations that partner with government, education, and business organizations to assist existing small businesses as well as individuals who are considering starting a business. In many states the SBDC is supported by a land grant college or community college in partnership with local economic development entities (Wilton, 1997). In addition, significant government funds, both federal and state, are directed towards these centers. SBDCs claim to have contributed both at a national and regional level to economic growth, job creation, and the overall satisfaction level of small business owners (Association of Small Business Development Centers, 2001). …

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