Highlights from the University of Vermont, Center for Rural Studies, 2008 Statewide Outcomes Study.

The Center for Rural Studies (CRS) at the University of Vermont conducted a statewide survey of Vermont Micro Business Development Program (MBDP) participants. The survey was conducted in October and November 2009 with MBDP clients served during the past two years beginning in October 2006. Survey results represent the MBDP client population at a confidence level of 95%, +/- 5.5% margin of error (N=252). The data highlighted in this report demonstrates that MBDP services have resulted in Vermont micro business start-up and retention, income generation, decreased reliance on public assistance, job creation and local economic development. 

Business Stage of Clients Served

69% of clients surveyed were in a pre-business stage at their intake to the program. At the time of the survey, 47% were in business and 36% reported being self-employed for more than one year.

Start-up and Survival Rate:

MBDP shows an average business start-up rate of 41% of clients starting a business after having worked with the program (data is based on this and other statewide data collected in a previous year). Further, 91% of these start-ups remained in business after an average of 3.5 years in business; this survival rate is higher than the SBA’s national average survival rate of 66% after 2 years and 44% after 4 years. It is also slightly higher than national microenterprise survival rates of79% to 90% after almost three years (Association for Enterprise Opportunity (AEO) and Aspen Institute).

Retention Rate: 

MBDP has an average business retention rate of 94%; these clients started the program with an established business and remained in business at the time of the survey.

Job Creation Statistics:

26% of business owners hired part and full time employees to work for them. A total of 33.25 full-time equivalent (FTE) jobs held by part time employees (ave hourly rate of $15) and 9 full-time jobs (ave hourly rate of $18) were created by MBDP. An additional 4.75 FTE part-time positions and 10 full-time jobs were retained by MBDP.

MBDP has helped to create and support 81.3 self-employed full-time equivalent (FTE) jobs for 124 clients.

Including all owners’ jobs (81.3 FTE), MBDP has helped to create and support a total of 138.2 FTE jobs. The average number of jobs created by clients with an established business is .92 FTEs or almost one additional job created per business owner. (AEO reports 1.69 average jobs created per micro business in Vermont).

Job Creation Estimates - A total of 1,214 clients were served by MBDP during the two year study time frame; based on the sampling method employed and the point estimate obtained through this survey of 47% surveyed being in business, approximately 570 MBDP clients (+/- ) are self-employed. These self-employed persons have potentially hired 524 FTE employees (+/-). Potentially, MBDP has created and supported 1,094 jobs (966-1294) in the past two years. 

Self-reported monthly business revenues (gross) ranged from $0 to $75,000 with a monthly average of $4,000 ($1,000 median).  

48% of clients said their business revenue has increased since working with MBDP.  In addition, 52% indicated that their cash flow availability to manage their business had improved. Anecdotally, 81% of business owners reported a positive net worth for their business. 

Personal and Household Income and Public Assistance Receipt:

Almost three quarters (73%) of respondents said that self-employment provides income to their household. Average monthly owner’s draw was $1,035 ($850 median) and ranged from $40 to $4,000.

Clients earn an average of 34% of their current income (20% median) from self-employment, while 32% receive the majority of their income from self-employment. 40% of clients described change in their average monthly household income as having increased since they started their business.

Other sources of income for self-employed clients include:

• 31% - another paid or wage earning position
• 21% - disability income from SSDI or SSI
• 1 receives income from federal welfare dollars or Temporary Assistance for Needy Families.

64% of all clients indicated that at one time they have relied on some form of public assistance. Self-employed clients are significantly more likely to have decreased their reliance to little or no assistance (52%) compared to clients who did not start a business (30%) (p=.02).                          

81% of clients have access to medical and health benefits; all but one client receive this insurance from their spouse’s employment and/or state health insurance while one person receives these benefits from their business at a cost of $330 per month.

Satisfaction with MBDP Services:

• 82% of clients said they are better off today because of having worked with MBDP. 
• Clients expressed high satisfaction with services and individual work with business counselors. 
• The majority also agreed or strongly agreed that working with business counselors aided in (72%) and provided the necessary on-going support (62%) for their business development.

Respondent Demographics:

• 40% were at or below 100% of the federal poverty level at intake
• 57% are women
• Average age is 46, range of 18-81 years
• 1 to 7 household members, average of 2
• 40% have 1 to 5 children (average 1.8) under 18 years of age living at home
• 21% have a high school education or less; 27% have completed some college education
• 35% received food stamps and 7% received TANF at intake

Prepared by Michele Cranwell Schmidt, Evaluation Coordinator and Research Specialist
Center for Rural Studies ∙ 207 Morrill Hall, University of Vermont ∙ Burlington, VT  05405
Ph 802.656.3021 ∙ http://crs.uvm.edu/evaluation

For the further evaluation reports visit the Center for Rural Studies (http://crs.uvm.edu/evaluation).