The State of Business Development

TheStateofBDSThe State of Business Development Services
FIELD at the Aspen Institute
Elaine Edgcomb and William Girardo

First published May 2012.

FIELD — the organization that CAMEO has partnered with to conduct the annual Microenterprise Census — released data today from the 2012 Census, including a user-friendly Data Highlights section on their webpage. Some key points to consider:

  • The industry continues to grow. FIELD estimates that it served more than 361,000 people and made more than $175 million loans in 2011.
  • Federal sources are the largest source of funding for program operations (29%). It is important that we continue to make the case for microenterprise as an industry, as federal belts continue to tighten.
  • Program costs are reasonable.  The median cost per individual served was $1,049 and the median cost per clients was $2,725.
  • With an industry loss rate of 7% and a portfolio at risk of 9%, microloan portfolios performed strongly in an economy that was still recovering.

As a companion piece to today’s release, we’re posting this paper from May 2012 looking at the change in Business Development Services provided by our industry from 2008 to 2010. While much of the conversation and advocacy around microenterprise development focuses on microlending, 70% of our members focus exclusively on business development services — of the 160 CAMEO members, only 36 provide microloans. The sort of data collected by the Census is vital to understanding the scope of training programs, and how effectively they enable entrepreneurs to successfully launch and maintain their businesses.

Nationwide, 92% of census respondents provide some form of business development services, and that number is growing. New organizations continue to enter the field, and existing organizations have diversified the training they provide to better meet the needs of their clients, demonstrating, as FIELD says, “the continuing power this strategy holds for institutions concerned with poverty alleviation, job creation and community economic development.”

Much of this growth has been supported by increased federal funding in 2009 and 2010; as private giving declined during the Recession, government funders stepped up to meet the gap. Since 2010, however, federal funding has dwindled as tax revenues remain low and as Washington focuses more on debt reduction than job creation — federal dollars represented 37% of sector funding in 2010, but fell to 29% in 2012.

As austerity arguments rage in Washington, it’s more important than ever that we have an accurate picture of the difference business development services make to the long-term stability and growth of new businesses. If you haven’t completed the Census yet this year, you have until the end of July to submit your data at www.microtracker.org/census.