Small Business Commission
July 25, 2000, Richmond
The Small Business Commission convened its first meeting of the 2000 interim on July 25. The commission's primary functions are (i) to evaluate the impact of existing statutes and proposed legislation on small businesses, (ii) to assess the Commonwealth's small-business assistance programs and examine ways to enhance their effectiveness, and (iii) to provide small-business owners and advocates with a forum to address their concerns.
The commission received overviews from the Department of Business Assistance, Virginia Commonwealth University and the Commonwealth Competition Council regarding the current needs of small businesses in the Commonwealth and the resources available to assist them.
The commission did not meet in 1999 but did study a number of issues in previous years. Staff briefed the commission on some of the programs examined in past years:
Department of Business Assistance
The Department of Business Assistance (DBA) operates on three principles: to strengthen the economy, to be a principal point of contact for small business, and to provide small businesses with access to resources that can assist them. The DBA oversees the Small Business Development Center (SBDC) program as well as the Virginia Business Incubator Program. The incubator program, founded in 1998, provides government support of 29 new programs encouraging small business development. These urban- and rural-based programs include redevelopment of the City of Franklin and the former military bases at Vint Hill Farms and Fort Pickett.
The director of the Small Business Development Center Program informed the commission about the technical assistance and training provided by the centers. The SBDC program is funded by the U.S. Small Business Administration (SBA), the Virginia DBA, and local sponsors. In calendar year 1999, the program counseled more than 4,090 business clients, just over half of which are existing businesses. The most popular areas of counseling include business planning, sources of capital, marketing and sales, and financial analysis. The program conducted more than 580 training events around the Commonwealth.
The SBDC program was fully certified by the SBA in October 1999, and a representative from Virginia's program was selected to be on the national certification team due to Virginia's strong positive performance. The program has plans to open new centers in Danville and Allegheny Highlands, as well as fund the SBA's One-Stop-Capital-Shop. The SBDC continues to support the City of Franklin and has hired a part-time worker to process loan packages in Southwest Virginia.
Study of Small Business Needs
A Virginia Commonwealth University survey of small-business needs was circulated among more than 3,000 businesses in the Commonwealth, all with fewer than 100 employees. The majority of respondents represented consumer services, retailing, manufacturing or business services. Approximately 86 percent had not received counseling from the SBDC program. Respondents ranked personnel and marketing/sales equally as the most important issue to their business, well above the third most important, financing. More than 60 percent use the Internet at least once a week. In the areas of personnel, equipment, unit sales, dollar sales and market share, just under half of the businesses expect to expand up to 25 percent during the next 12 months. The survey also examined businesses' preferred methods of receiving information about assistance programs; most preferred to receive that information by mail.
Commonwealth Competition Council
The Commonwealth Competition Council's mission is to help government work more efficiently to help business. The council has a website that receives approximately 7,700 hits per month, more than 3,500 of which are from businesses. In 1997, the General Assembly added a requirement that the council report annually to the Small Business Commission. Two members were added as joint members of both the Small Business Commission and the council, and the mission was changed to include monitoring the practices of government and nonprofit organizations to preserve private enterprise.
Section 9-340 of the Code of Virginia defines "commercial activity" as "performing services or providing goods which can normally be obtained from private enterprise." In 1998, Virginia was the first state to publish a list of more than 218 commercial activities performed by state government. The report was not widely circulated among small businesses but has been updated and will be on the council's website by the end of the month.
Senate Joint Resolution 219 (2000) asked the council to study the ongoing or permanent commercial activities of not-for-profit organizations and the effects of such activities on business and state revenues. As a part of its examination of these issues, the council will receive comments from non-council members during a series of public hearings. The council also has a discussion forum on its website for public use.
The commission discussed the development of a work plan for the year. Members expressed concerns about a number of issues, as well as a desire for more information. Major issues include: the role of the federal Small Business Administration in helping small businesses; lack of awareness among small-business owners about resources that are available; the difficulties faced by small businesses in attracting, training and retaining employees; and ways to simplify the process for small-business owners to get the assistance they need. Staff will prepare a work plan for this year and circulate it among members for comment prior to the next meeting.