Recession Also Hits Startup Aid For Penna. Businesses
PITTSBURGH (AP) – The recession has prompted a surge in entrepreneurial activity across the country, but the trend is not reflected in Pennsylvania – and small business advocates worry that huge funding cuts in programs that try to nurture such ventures may mean even fewer startups.
Although new business creation last year hit the highest levels in 14 years as some who lost jobs decided to go out on their own, Pennsylvania came in third-tolast in a Kauffman Index entrepreneurial ranking. And funding for the Small Business Development Center was slashed to $3.6 million, down 55 percent from the all-time high of $8 million in 2006.
“That’s the irony we’re facing,’’ said Christian Conroy, the center’s state director. “(It’s been) one of the worst economies in the country, especially in Pennsylvania ... the demand for our services is in more need now than ever before.’’
Conroy said about 25 to 30 percent of positions have been cut at centers across the state, including counselors and office assistants at 18 university branches. He and supporters are lobbying lawmakers to restore funding and also considering seeking up to $7 million in federal funds, but that would require matching grants from the state.
Conroy said Pennsylvania’s relatively low level of entrepreneurs may be due to its industrial past, with workers staying at large corporations for three or four decades, and low immigration could also be a factor.
In 2009, only 200 per 100,000 adults started a business venture in the commonwealth, less than half the level as in Oklahoma and Montana, where 470 per 100,000 start a business. The numbers are up slightly from last year, when Pennsylvania finished last in the national rankings with only 160 per 100,000 starting businesses.
Bucking the trend is former teacher Marc Cipullo, who sought help from the center at the University of Pittsburgh in April after deciding to open an antique shop in Shadyside. Without the help, he said, he would not have even thought of some startup costs he would face such as different kinds of insurance, alarms and fees to join the Chamber of Commerce.
“I could have never come up with a financial plan on my own,’’ Cipullo said. “I can somewhat decipher it at this point. It’s been really helpful to outline what to possibly expect.’’
Also seeking help from the center was Matthew Rod-gers, a Pittsburgh native now living in Seattle, who decided to go into the video game business after working for Nintendo, Real Networks and Microsoft, as game tester, programmer and finally producer.
“I feel like I know how to make money from video games, but I wasn’t sure about the whole business side of things,’’ he said. “I had a 50 percent business plan complete but had no clue what half of the financial terms meant. Throughout the course of the meeting and after, I had a good feeling. I felt good about myself because I was on the right track.’’