What it means
Running a small business means covering many skills at once, from bookkeeping and tax to hiring and sales. An SBDC provides one-to-one advice from trained consultants who help owners with those tasks.
The advice is usually confidential and often free, while training workshops may carry a small fee. The network is partly funded by the US Small Business Administration, together with state and local partners and the host organisations.
Because each local centre is hosted differently, the services and specialities vary from place to place. Some focus on exporting or technology, while others help with government contracting or business recovery after a disaster.
Typical help includes writing a business plan, building a financial forecast, preparing a loan application and understanding cash flow. Advisers can also help owners compare funding options and prepare for meetings with lenders.
They do not lend money themselves, but they can make a borrower much better prepared. For finance professionals, an SBDC is a useful referral when a small client needs guidance beyond your remit.
Lenders and accountants often send clients to the local centre so that plans and projections reach a good standard before submission, which saves everyone time. The centres can also provide market data and training to owners at low cost.
The service is advisory and the owner remains responsible for the decisions. Advice is only as good as the information supplied, so owners should bring accurate financial records and be ready to have their assumptions challenged.
It is also sensible to check the adviser's experience in your sector. Similar bodies exist in other countries under different names, such as enterprise agencies and business support hubs.
The details of eligibility and funding change over time and by location. A quick search for the nearest centre or a call to the local university is the best way to find out what is available.
In practice
Real-world examples.
Example
A woman wants to open a small bakery but has never written a business plan. She books free sessions with an SBDC adviser who helps her build a monthly cash flow forecast. She takes the finished plan to a local lender. The adviser also rehearses likely questions with her before the meeting.
Example
A landscaping firm owner is struggling with late-paying customers. An SBDC consultant reviews his invoices and suggests clearer payment terms and a deposit policy. His collection time improves within a few months, which eases the strain on his bank balance. He then returns for a session on pricing.
Example
A founder of a small manufacturer wants to start exporting. Her local centre introduces her to export training and helps her understand the paperwork. She wins her first overseas order within the year. The adviser had warned her about currency risk, so she quoted in dollars from the start.
Case study
Seen in the real world.
Pinecrest Pottery is an illustrative, fictional studio whose owner wanted a $60,000 loan to buy a larger kiln. The first lender turned her down because her projections did not show how the loan would be repaid.
She visited a local SBDC, where an adviser helped her build a three-year forecast and a break-even analysis. The adviser also pointed out that she had left out the cost of extra electricity and a part-time assistant.
With a more realistic plan, she was approved by a second lender at a fair rate. The illustrative lesson is that professional help with the numbers can change the answer from no to yes, and it costs very little. She later returned for help with hiring and pricing, and now recommends the service to other makers.
Watch out
Common mistakes.
- Expecting an SBDC to give grants or loans, when it offers advice and training rather than funding, and lenders make their own decisions.
- Arriving without financial records such as recent statements, sales figures and a list of debts, which limits how much the adviser can help.
- Treating the advice as a guarantee of lender approval, when the lender still makes its own decision.
Questions
People also ask.
Is an SBDC free?
Most one-to-one advising is free, although some workshops and specialist services may carry a fee, so it pays to ask when you book.
Who can use an SBDC?
Current and aspiring small business owners can usually use the service, and each centre sets out its own eligibility.
How is an SBDC different from an accountant?
An SBDC adviser helps with planning, strategy and funding, while an accountant handles bookkeeping, tax returns and statutory accounts. Many owners use both, and the adviser may suggest when it is time to hire an accountant.
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