LEAF is proud to offer individualized counseling services to small businesses in the Boston area, free of charge. The L-TAP is funded by an agreement with the US Small Business Administration (SBA), an award from Wells Fargo’s Diverse Community Capital Program, and various smaller partnerships.
Why is it worthwhile to provide technical assistance to small businesses?
First, small businesses reduce income inequality. Large firms contribute to inequality as the increase in profit margins offered by economies of scale mainly goes to the executives. Small businesses, especially ones with a cooperative business model, help lift up residents of underdeveloped areas and tend to stay local.
Second, they are endangered. 2008 marked the first time business closings outnumbered startups since records began. They need all the help they can get.
Third, technical assistance is useful to small businesses. Proving this seemingly self-evident statement is harder than it seems, and recent progress in entrepreneurship research is lacking. One study found that easily quantifiable effects of technical assistance like increases in profit margins, number of employees, and market share, are proportional to firm size (Figure 1). This would suggest TA is worthwhile only for large firms. Yet a 3-year study
by the SBA, based largely on surveys, found that nascent small businesses were most likely to rate TA useful (Figure 5.5 reproduced here). A safe conclusion is that TA provides more intangible benefits to microentrepreneurs, like increasing their longevity or allowing them to design a business plan before they ever start making sales.
So, if you’re a current or prospective small business owner near Boston, please fill out our sign-up form!
Read more about Boston microentrepreneurs here.