URI Economic Impact Report - Autumn 2020

URI ECONOMIC DEVELOPMENT

HELPING RHODE ISLAND BUSINESSES SUCCEED

ENTREPRENEURSHIP & INNOVATION Two programs funded by federal grants that support Rhode Island businesses fall under the purview of the Division of Research and Economic Development: The Rhode Island Small Business Development Center and the Polaris Manufacturing Extension Partnership. THE RHODE ISLAND SMALL BUSINESS DEVELOPMENT CENTER, supported by the federal Small Business Administration, helps aspiring entrepreneurs to start new businesses and existing businesses to thrive. Over 40 percent of RISBDC clients were not yet in business when they contacted the center. Its business counselors provide advice on topics such as business planning, accounting, taxes, licensing and marketing. Clients have ranged from an acupuncturist to a microbrewery, a mushroom farm to an auto repair shop, and from a biohazard cleanup service to a holistic healing center.

Expenditures on vendors subject to a multiplier effect are $21.6 million. Studies show that 90 percent of all service and manufacturing businesses with more than $700,000 in gross sales operate at margins of less than 10 percent, while 15 percent to 20 percent is likely ideal. Choosing a conservative multiplier of 15 percent because the majority of the center’s clients are service businesses, the total expenditures are estimated at $18,360,000. By applying an industry-standard multiplier of 1.9 to this amount (Kantor & Whalley, 2014), the Rhode Island Small Business Development Center can report an annual total economic impact of $34,884,000.

Its accomplishments for FY19 include: 541 Clients (475 percent growth since 2014). Aspiring entrepreneurs and existing small business owners sought out the center in record numbers. A total of 541 unique clients, of whom 189 (35 percent) identified as minorities and 243 (45 percent) identified as female, were supported by over 3,100 contact hours. 38 New Startups were launched by clients this past year alone. These newly minted business owners join an active network of 76 total local startups that have remained in business since 2014. 179 New Jobs which represents a 52 percent increase since 2014. To date, the center’s network of new startups and existing small business clients account for 2,352 jobs (1,779 full-time jobs and 573 part-time jobs) in Rhode Island.

$15.6 Million Investment Capital and $6.2 Million Annual Sales Growth (200 percent growth since 2014) and $10 million in profit for start-ups and existing small businesses in the state of Rhode Island. $350,000 of State Investment to support its operations in FY19. For every dollar of state appropriation, the center is returning $61.71 in new and small business capital. $1.08 Million in Total Expenditures to run its operations in FY19. For every dollar of organizational expenditure, it returns $20 in new and small business capital.

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22 The University of Rhode Island