NJBIA At Issue

Sustainable Growth Where It’s Needed Most

At Issue

Andrew Musick, Vice President, Taxation & Economic Development

Ronald Reagan famously said the best possible social program is a job. The same idea applies to communities: The best economic development programs are private-sector businesses that are growing and thriving. The Small Business Administration decided to put this idea to work with the Emerging Leaders Initiative, which NJBIA has supported for the past several years. 

The official description says the program provides training for executives in businesses poised for growth in historically challenged communities. In layman’s terms, SBA is helping business leaders who are succeeding in areas where the economy is not doing well. The idea is to give these businesses a hand, and in return, they will deliver sustainable economic development in urban communities that are struggling.

The Emerging Leaders Initiative looks for C-suite-level executives with at least three years in business and annual revenues of at least $400,000. The seven-month course provides participants with experienced mentors and specialized workshops, and gives them opportunities to develop connections with their peers, city leaders, and the financial community. The program includes 100 hours of professional specialized training and peer-to-peer counseling in growth strategy plans, financing and access to capital, and government contracting.

In 2015, the SBA did a thorough assessment of the program, and found, on average, that participating businesses increased revenues by 39 percent ($362,000) and, in total, created more than 400 new jobs after only one year.

Previous participants continued to increase revenue in their second and third years as well as increase employment. Those who have been out of the program increased revenue by 14 percent after the second year and 11 percent after the third year.

The same results were seen with job creation: Second year graduates grew employment at 14 percent and third year at 8 percent. The Emerging Leaders Program received a 96 percent satisfaction rating, and graduates indicated a desire to continue with mentorships and advisory groups to maintain peer-to-peer learning.

While this is great for the businesses that are selected, it’s an even bigger boon to the communities in which they operate. In some areas that have experienced chronic economic challenges, the presence of growing and thriving businesses can be immeasurable. An area once thought lost can become viable, thanks to the businesses that are already there, and do so naturally, without expensive government-subsidized gentrification programs.

These accomplishments are also sustainable. Participants bring their own existing talents to the table, but then learn good business practices that can help them for years after they graduate – things like regularly using financial data and analysis to tell them what’s going on in the market, and sticking to a business growth plan to make sure they stay on the right track.

The Emerging Leaders Program is never going to replace the kinds of public-private partnerships that we’ve seen rebuild hard-hit, economically depressed areas before. But no matter how much public funding is put into job training and infrastructure programs, successful economic development will always need private-sector businesses to maintain growth.

Since the program was launched in 2008, more than 3,300 business owners have participated in the training. That’s potentially 3,300 private-sector businesses growing and thriving in communities where such success is hard to come by.

To read more articles, visit: www.njbmagazine.com

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