SMALL BUSINESS AND ITS
IMPACT ON GEORGIA
2024
TABLE OF CONTENTS
FIGURES
Why Small is Great . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1. Georgia's Rankings . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Why Georgia is Great . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2. Georgia Small Business Statistics . . . . . . . . . . . . . . . . . 9
Georgia Small Business Statistics . . . . . . . . . . . . . . . . . 8
3. Small Firm Employment By Industry . . . . . . . . . . . . 11
Employment Profile of Georgia . . . . . . . . . . . . . . . . . . 10
4. Georgia Business vs. U.S. Business . . . . . . . . . . . . . . 13
Demographic Profile of Georgia . . . . . . . . . . . . . . . . . . 12
5. Small Business Financing . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Georgia's Changing Demographics . . . . . . . . . . . . . . . 14
6. AI In Small Business . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Ask the Expert:
7. Human Resources in Small Business . . . . . . . . . . . . 29
Obtaining Capital For Your Small Business . . . . . . 18 AI and Small Business . . . . . . . . . . . . . . . . . . . . . . . 22 Top HR Issues In Small Business. . . . . . . . . . . . . . . 26 About the UGA SBDC . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 UGA SBDC Locations . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
UNIVERSITY OF GEORGIA | 3
WHY SMALL BUSINESS IS GREAT Small businesses are vital to the economy. Here in Georgia, they provide hundreds of thousands of jobs, serving not only as principal incomes for families, but also meeting unique needs for part-time, temporary and supplementary employment or even a first job opportunity. The innovation and creativity that entrepreneurs deliver to the marketplace appears in all types of businesses. Whether high tech or personal services, these engines of economic growth are found in every big city and small town throughout Georgia.
4 | SMALL BUSINESS AND ITS IMPACT ON GEORGIA
"SMALL BUSINESSES CREATE THE COMMUNITY CHARACTER AND LOCAL CHARM THAT DEFINES OUR HOMETOWNS." Over the past five years, individuals who have sought assistance from the University of Georgia Small Business Development Center (UGA SBDC) have created more than 2,100 NEW BUSINESSES, added more than 14,000 JOBS, raised more than $1.11 BILLION IN LOAN AND EQUITY FINANCING and generated over $9.5 BILLION IN SALES. According to the latest impact study, firms that have sought UGA SBDC assistance experienced JOB GROWTH OF 21.1% versus the 4.4% growth of a typical Georgia firm. At the UGA SBDC, we believe small is great and have produced this report to cover some of the impacts small businesses have in Georgia. This publication provides an overall look at Georgia’s small business environment and shines the spotlight on several noteworthy trends. Most importantly, this publication helps illuminate the contributions made by Georgia’s entrepreneurs on the economic well-being of all Georgia citizens.
UGA SBDC Impact Over the Past 5 years:
2,178
NEW BUSINESSES
WITH 18 OFFICES ACROSS THE STATE, THE UGA SBDC PROVIDES EDUCATIONAL TRAINING PROGRAMS AND CONFIDENTIAL, ONE-ON-ONE CONSULTING TO SMALL BUSINESS OWNERS AND PROSPECTIVE ENTREPRENEURS.
14,933 JOBS CREATED
$1.11B
RAISED IN LOAN AND EQUITY FINANCE
$9.5B
SALES GENERATED
UNIVERSITY OF GEORGIA | 5
WHY GEORGIA IS GREAT
6 | SMALL BUSINESS AND ITS IMPACT ON GEORGIA
#1
BEST STATE TO DO BUSINESS1
#1
LOGISTICS AND INFRASTRUCTURE1
#5
BEST STATE FOR FEMALE ENTREPRENEURS3
#1
#1
BUSINESS INCENTIVE PROGRAMS1
#5
ENERGY AVAILABILITY AND COST1
BEST STATE TO START A BUSINESS2
#1
COMPETITIVE LABOR MARKET1
#10
FASTEST GROWING STATE BY GDP1 SOURCES: 1)“Top States for Doing Business 2023.” Area Development, 2023 2) “Best US States for Quitting Your Job and Launching Your Own Business."cnbc.com, Web 2023 3) "Best States for Women Business Owners.” Deputy.com, Web 2023
UNIVERSITY OF GEORGIA | 7
GEORGIA SMALL BUSINESS STATS
8 | SMALL BUSINESS AND ITS IMPACT ON GEORGIA
1.2M
SMALL BUSINESSES IN GEORGIA
99.6% 1.7M 38.4%
OF GEORGIA BUSINESSES ARE SMALL
SMALL BUSINESS EMPLOYEES IN GEORGIA
OF GEORGIA’S SMALL BUSINESSES ARE MINORITY-OWNED
87.8%
OF ALL GEORGIA EXPORTERS ARE SMALL BUSINESSES
SOURCE: "Small Business Profile - Georgia, 2023." U.S. Small Business Administration, Office of Advocacy, 2023
UNIVERSITY OF GEORGIA | 9
EMPLOYMENT PROFILE OF GEORGIA'S SMALL BUSINESSES
Georgia small business employment grew 24.3% from 1996 to 2020, exceeding the national small business employment growth rate. The state’s unemployment rate is at 3.4%, lower than the U.S. national unemployment rate of 3.9%.1 From March 2021 to March 2022, there was a net increase of 213,362 jobs in Georgia. Small businesses contributed to 68.1% of that total.2 Small business employees make up 42% of Georgia's employees, with small business accounting for 99.6% of Georgia businesses overall.2
1.7 MILLION
1.2 MILLION
Small Business Employees2
Small Businesses in Georgia2
10 | SMALL BUSINESS AND ITS IMPACT ON GEORGIA
SMALL FIRM EMPLOYMENT BY INDUSTRY2 EMPLOYERS
EMPLOYMENT
PAYROLL ($1,000s)
INDUSTRY
SMALL
%
SMALL
%
SMALL
%
Professional, Scientific and Technical Services
28,400
97.9
159,010
52.3
11,835,856
45.9
Retail Trade
21,375
97.7
145,981
29.9
5,308,116
38.1
Other Services (except Public Administration)
20,931
99.1
137,140
84.2
4,219,321
81.1
Construction
19,637
99.0
153,961
75.8
8,786,111
70.6
Healthcare and Social Assistance
19,619
98.3
234,704
43.1
10,555,263
37.2
Accommodation and Food Services
15,933
98.0
266,812
58.1
4,214,857
59.0
Administrative, Support and Waste Management
10,702
95.4
114,669
27.5
4,599,460
27.8
Real Estate and Rental and Leasing
10,616
98.0
39,860
56.1
2,357,855
47.7
Wholesale Trade
9,393
92.3
103,350
50.2
6,529,551
45.3
Finance and Insurance
7,844
94.8
51,193
27.8
4,003,274
21.8
Manufacturing
6,035
90.8
129,023
32.9
6,010,460
29.0
Transportation and Warehousing
6,025
93.1
52,881
21.7
2,360,441
17.1
Arts, Entertainment and Recreation
3,490
98.3
33,198
58.4
769,928
44.8
Educational Services
2,948
97.4
47,570
54.4
1,546,013
40.9
Information
2,587
90.4
28,270
24.1
2,231,276
18.5
Agriculture, Forestry, Fishing and Hunting
898
98.9
7,000
89.9
333,930
89.3
Industries Not Classified
607
100.0
516
100.0
17,654
100.0
Management of Companies and Enterprises
523
51.5
11,052
8.2
965,388
6.9
Utilities
132
86.3
6,857
29.7
614,921
25.2
Mining, Quarrying, and Oil and Gas Extraction
94
82.5
1,483
28.7
93,658
25.8
186,910
97.7
1,724,530
42.0
77,353,333
35.7
TOTAL
Sources: 1. “Georgia's Unemployment Rate Remains Unchanged as Labor Force Reaches Record High." Georgia Department of Labor, 2023. 2. “Small Business Profile – Georgia, 2023.” U.S. Small Business Administration, Office of Advocacy, 2023.
UNIVERSITY OF GEORGIA | 11
DEMOGRAPHIC PROFILE HOW GEORGIA COMPARES TO THE U.S.
Georgia continues to exhibit a wide spectrum of diversity among the state’s entrepreneurs and small business owners. A recent report from the U.S. Small Business Administration Office of Advocacy found that women own 46.4% of Georgia businesses. Across the state, there are 38,798 femaleowned businesses with employees (outside of the owner).1 Georgia is also home to 524,016 minority-owned businesses, accounting for 38.4% of the state’s businesses.1 Georgia ranks fifth in the nation for states with the most minority-owned businesses.2 According to 2022 U.S. Census Bureau data, the state of Georgia continues to experience population growth with an estimated 10,912,876 people living in Georgia, representing a 1.9% increase from 2020.3
Sources: 1. “Small Business Profile – Georgia.” U.S. Small Business Administration, Office of Advocacy, 2023. 2. “Minority Businesses by State.” Maxfilings, Web, 2023. 3. “Quick Facts.” United States Census Bureau, Web, 2023.
12 | SMALL BUSINESS AND ITS IMPACT ON GEORGIA
UNITED STATES BUSINESSES 99.9% ARE SMALL 43.4% WOMAN-OWNED 20.4% MINORITY-OWNED 14.5% HISPANIC-OWNED 6.1% VETERAN-OWNED
GEORGIA BUSINESSES
99.6% ARE SMALL 46.4% WOMAN-OWNED 38.4% MINORITY-OWNED 9.1 % HISPANIC-OWNED 7.5 % VETERAN-OWNED
Source: 1. “Small Business Profile – Georgia.” U.S. Small Business Administration, Office of Advocacy, 2023.
UNIVERSITY OF GEORGIA | 13
GEORGIA'S CHANGING DEMOGRAPHICS TAYLOR HAFLEY
APPLIED DEMOGRAPHER, CARL VINSON INSTITUTE OF GOVERNMENT Georgia is a great state to do business. As this publication highlights, our state stands out across many metrics of economic vitality and has been the No. 1 state to do business in for a record 10 straight years. A critical piece of Georgia’s economic development success is its dynamic demographics, which reflect and embody the state’s growing influence on the national stage. As of 2022, Georgia is home to 10.9 million people, which ranks eighth in population among U.S. states. Georgia was one of only four states to grow by more than one million people during the 2010s. What’s more, we have over four million more Georgians living in the state today than in 1990. In the face of this outstanding population growth and economic development success, Georgia's population growth, like the rest of the country, slowed last decade. Georgia’s population grew at a rate of 10.6% during the 2010s, surpassing the national average of 7.4%, but slower than we
14 | SMALL BUSINESS AND ITS IMPACT ON GEORGIA
had experienced in the past three decades when we exceeded 15%. Even so, the latest population projections anticipate Georgia’s population will continue to grow and will be home to more than 13.5 million people by 2050. So, what drives population growth in Georgia? While jobs, housing, family and friends or quality of life may influence why or where people move or populations change, there are only three ways in which total population can change – births, deaths and migration. As is true across the country, births are on the decline in Georgia. The number of births peaked in Georgia in 2007 at almost 151,000 but fell to just under 123,000 births by 2022, making it the year with the third fewest number of births in the state during the 21st century, surpassed only by 2020 and 2021.
GEORGIA IS THE 8TH MOST POPULOUS STATE IN THE U.S. GEORGIA'S POPULATION WAS 10.9 MILLION IN 2022 AND IS PROJECTED TO GROW TO 13.5 MILLION BY 2050.
There were about 7,000 fewer births in 2022 than in 2000 – when there were 2.5 million fewer Georgians living in the state. Over the long-term, this downward trend leads to slower population growth. Next, we all know mortality increased during the Covid-19 pandemic as the state experienced an elevated number of deaths in 2020, 2021 and 2022. While we are still waiting on data from 2023, the trends suggest that deaths peaked in 2021 and that the decline observed in 2022 will continue through 2023. Putting the pandemic aside, the long-term trend in Georgia has still been an increasing number of deaths. In one respect, this makes sense given that we have more Georgians than ever. However, it is also because we have a growing senior population; the over age 65 population was the state’s fastestgrowing age group in the 2010s. As this older age group outpaces the state’s population growth, it means that older age groups account for a larger share of the population than they have historically. In 1990, about 10% of the state’s population was over the age of 65. As of 2020, about 15% of the state’s population falls within that age group. Further, projections anticipate that roughly one out of five Georgians will be over the age of 65 by 2040. The state’s median age rose from 35.3 in 2010 to 47.3 in 2022. With that said, Georgia is still relatively young compared to many other states: as of 2022, Georgia’s median age of 37.5 ranked as the 10th-youngest in the country.
net migration accounted for more than 60% of the state’s total population increase. That share was even higher according to the most recent data. Between July 1, 2021, and July 1, 2022, net migration accounted for 80% of the state’s population increase, according to data from the U.S. Census Bureau. Migration’s influence over Georgia’s population isn’t new. Migration has played a major role in the South’s history. The Great Migration from the region’s agricultural belt to midwestern manufacturing jobs in the early and middle part of the 20th century had profound impacts on population trends in the South. In the post-World War II era, mass homeownership, suburbanization, the interstate system and air conditioning all contributed to a population shift from northeastern and industrial cores to the metropolitan areas of the South and the West. CONTINUED ON NEXT PAGE →
1 IN 5 GEORGIANS WILL BE OVER AGE 65 BY 2040.
As births decline and populations age, migration becomes an ever-more critical component of population change in Georgia. For each of the past five years, positive net migration has been the largest contributor of population growth. During the 2010s,
UNIVERSITY OF GEORGIA | 15
CONTINUED FROM PREVIOUS PAGE Given migration’s importance to the state’s population growth, what do we know about who and where people move in and out of Georgia? Most of Georgia’s net migration is from domestic migration referred to as in-migration. In-migrants are people who move to Georgia from other states. The Census Bureau estimates almost 60% of the total net migrants during the 2010s moved to Georgia from other states. Interestingly, most in-migrants come from a relatively small number of states. In fact, more than 60% of the people who moved to Georgia came from just 10 states. About 17% of the state’s in-migrants moved from Florida, with Texas, Tennessee, Alabama, North Carolina, South Carolina, California, New York, and Virginia rounding out the top 10. As you can see, those states are either nearby southern states or states with the largest populations. When considering migration and its impacts, it is important to remember that migration is a two-way street. Just as people move to Georgia, they also move out. When examining outmigration, a similar pattern to in-migration holds: about 60% of the people who moved out of Georgia to other places during the past decade moved to one of 10 states. And interestingly, nine of those states were the same as the states listed above. Of course, we know that people who move to Georgia aren’t dispersed evenly, and also that people move within Georgia. Looking at the county level, most of the population growth has been in metropolitan Atlanta, the coast, and the North Georgia mountains. Meanwhile, 68 counties lost population in the past decade.
16 | SMALL BUSINESS AND ITS IMPACT ON GEORGIA
In terms of who moves to the Peach State, Georgia is a THE AREAS OF growing state that GEORGIA attracts people EXPERIENCING THE across all race and age groups. Among MOST POPULATION age groups, Georgia GROWTH ARE IN the highest rates of net migrants METROPOLITAN ATLANTA, fall within the 25THE COAST AND THE 39 age group. This NORTH GEORGIA MOUNTAINS. aligns with broader migration trends, as these ages are when individuals and households are more likely to be mobile, moving for schools, jobs, or several other reasons. Once households start families and are established in their careers, they are less likely to move. As a place that attracts people across all racial and ethnic groups, Georgia’s population is increasingly racially and ethnically diverse. One constant amid the state’s changing demographic landscape is its large Black population. In 1980, an estimated 28 percent of the population identified as Black. Today, Georgia has the second-largest Black population in the U.S. Atlanta, and the Atlanta suburbs, are a destination for Black individuals and households from around the country. That said, it is also worth noting that Georgia’s rural Black population is
the second largest in the country. With that in mind, over the past 10 years the state has seen a further increase in diversity driven by the state’s growing Hispanic and Asian communities. The racially and ethnic diversity, it is important to note, is not evenly spread across age groups. The state’s under age 25 population, which represents about 33% of the population, is more diverse than the rest of the state. About 57% of the state’s population under the age of 25 identifies as a racial or ethnic group other than non-Hispanic white. The over age 75 population, meanwhile, is more than 70% white. The state’s population growth, racial and ethnic diversity, and relative youth to other states are each a source of strength when businesses and companies along with families and individuals decide to locate to Georgia. Demographic shifts such as stagnant youth population growth, lower fertility rates and an aging population creates opportunities for entrepreneurs and business leaders on the one hand, and suggests that leaders must embrace data-informed decisionmaking and innovative solutions to new challenges. Along with business and economic development success, it is important to recognize the state’s population and population growth has contributed to its status as a prominent player in the South.
A special thanks to University of Georgia student Micah Shannon for his contributions to the research of this article.
57% OF GEORGIA'S UNDER 25 POPULATION IDENTIFIES AS A RACIAL OR ETHNIC GROUP OTHER THAN NON-HISPANIC OR WHITE.
THIS ARTICLE WAS PROVIDED BY THE UNIVERSITY OF GEORGIA'S CARL VINSON INSTITUTE OF GOVERNMENT LEARN MORE: cviog.uga.edu
UNIVERSITY OF GEORGIA | 17
ASK THE EXPERT:
OBTAINING CAPITAL FOR YOUR SMALL BUSINESS ANTONIO BARRIOS, SENIOR BUSINESS CONSULTANT MEET THE EXPERT: Antonio Barrios is a senior business consultant with the University of Georgia Small Business Development Center at Kennesaw State University. He has over 30 years of experience in finance, management and helping business access capital. His previous experience includes time as a commercial lender for Access to Capital for Entrepreneurs and as a commercial loan officer for a community bank. He also worked as an economic and financial analyst for the Central Bank of Venezuela in financial planning and economic analysis. Over his past 13 years at the UGA SBDC, Antonio has helped his small business clients secure $137 million in capital. WANT TO LEARN MORE ABOUT ACCESSING CAPITAL FOR YOUR BUSINESS? CHECK OUT TRAINING OPPORTUNITIES FROM THE UGA SBDC! georgiasbdc.org/training
18 | SMALL BUSINESS AND ITS IMPACT ON GEORGIA
PREPARING TO OBTAIN CAPITAL, STEP BY STEP GUIDE 1. DETERMINE HOW MUCH MONEY YOU NEED FOR YOUR BUSINESS AND HOW THE MONEY WILL BE SPENT
Having this information will help the business owner identify the type of financial institutions and loan program to contact banks, microlenders, etc. Knowing the exact amount you need will prevent you from borrowing an insufficient or excessive amount. 2. MATCH THE USE OF FUNDS WITH THE TYPE OF BUSINESS LOAN YOU NEED Different loans can be better suited depending on the type of use. Funds may be needed to cover expenses like seasonal workers, holiday inventory or account receivables. Many businesses need a short-term loan like a line of credit. The
purchase of assets like equipment, machinery and real estate will be better with a term loan that can be paid off over a longer period of time. 3. PREPARE/UPDATE A BUSINESS PLAN When applying for a loan, a business plan with financial projections is a great way to demonstrate the future success of the business. It will provide confidence to both the business owner and the lender that the loan will be repaid in a certain time. 4. UNDERSTAND THE BUSINESS CREDIT ANALYSIS: Business credit analysis is the method by which a financial institution calculates the creditworthiness of a business or organization. While each lending institution analysis is unique, most banks utilize some variation of “The Five Cs of Credit” when making business credit decisions:
5 Cs of Credit • CHARACTER: Personal credit reports, educational background and business experience may all be used by the lender to determine if the borrower is trustworthy enough to repay the loan. • CAPITAL: Business loan applicants must have reasonable funds invested in their business to reflect personal commitment to the business. Most banks require 10%-30% of the total costs of the project to be invested by the owners. • CAPACITY: The borrower must demonstrate the ability to pay back the loan, which may include past financial statements or financial projections. • COLLATERAL: Business equipment, commercial properties, accounts receivable and inventory may all be used as collateral. If the business collateral does not cover the value of the loan, personal assets may be required as collateral. • CONDITIONS: Lenders will consider economic conditions both locally and within the industry. Borrowers should look for industry analysis reports that showcase industry trends.
Expertise in Action
WITH UGA SBDC ASSISTANCE, FRANCHISEE SECURES LOAN AND GROWS TO FOUR LOCATIONS When Mark Preetorius was toying with the idea of opening a Massage Envy franchise, he contacted the UGA SBDC. Barrios assisted Preetorius in developing a business plan and financial projections to apply for a small business loan. Preetorius was awarded the loan and opened the Massage Envy in Canton.
FULL STORY:
UNIVERSITY OF GEORGIA | 19
OBTAINING CAPITAL, Continued 5. IDENTIFY THE SOURCE OF CAPITAL: TRADITIONAL AND NON-TRADITIONAL The stronger "The Five 5 Cs of Credit" are for a borrower, the more likely it is for them to be eligible for a traditional loan. Non-traditional loans usually refer to any lending practice outside a traditional banking institution. The goal for most business owners should be to get access to traditional financing, including Small Business Administration (SBA) loan programs. However, when traditional financing is not available, understanding the options, application process and impact on cash flow of non-traditional financing can help business owners to access the capital that they need in a specific moment. 6. UNDERSTAND THE SMALL BUSINESS ADMINISTRATION LOAN PROGRAM AND REQUIREMENTS The U.S. Small Business Administration helps small businesses get funding by setting guidelines for loans and reducing lender risk. SBA-backed loans make it easier for small businesses to get the funding they need and offer competitive terms, generally having rates and fees that are comparable to non-guaranteed loans. These loans may offer lower down payments, flexible overhead requirements and reduced necessary collateral. There are several loan plans that are likely to meet the needs of any small business.
Sources: 1) "UGA SBDC Client Survey.” UGA SBDC, 2023. 2) “Small Business Credit Survey.” Federal Reserve Banks, 2022.
20 | SMALL BUSINESS AND ITS IMPACT ON GEORGIA
SMALL BUSINESS FINANCING STATS
22%
40%
OF UGA SBDC CLIENTS APPLIED FOR BUSINESS FINANCING WITHIN THE PAST YEAR.2
OF U.S. SMALL BUSINESSES APPLIED FOR BUSINESS FINANCING WITHIN THE PAST YEAR.1
FINANCIAL CHALLENGES FACED BY GEORGIA BUSINESSES 100%
ARE BUSINESSES FINANCIAL NEEDS MET?
96% 80%
85%
63%
60%
52%
40%
51%
37%
27%
20%
FINANCIAL NEEDS NOT MET
ed
it
Av ail ab il
ity
es ns
Cr
pe
Pa yin
gO pe
ra tin g
Ca sh en
Ex
Flo w
ts os Un ev
dC as e re
Inc
Fin an cia lC ha lle
ng es
0%
FINANCIAL NEEDS MET
96% of survey respondents in Georgia businesses noted they are experiencing financial challenges in several different areas of their businesses, with increased costs of goods and services affecting 85% of survey respondents in Georgia.1
Of the UGA SBDC clients surveyed, the majority currently have their financial needs met and are not looking for funding.2
Sources: 1. “Small Business Credit Survey.” Federal Reserve Banks, 2022. 2. “The PulseCheck Survey: Navigating AI, Finance and HR Dynamics.” UGA SBDC, 2023. Note: The PulseCheck Survey: Navigating AI, Finance and HR Dynamics, was conducted by the UGA SBDC in fall 2023 to determine needs and interests of small business owners in the areas of human resources, access to finance and AI. Respondents included SBDC clients and small business owners in Georgia.
ECONOMIC CHALLENGES FOR SMALL BUSINESSES According to the 2022 Small Business Credit Survey from Federal Reserve Banks, a majority of businesses across the U.S. reported they experienced financial challenges in the last year. According to the survey, 81% of businesses cited the rising cost of goods and services as the most common challenge. 1 For the second year in a row, meeting operational expenses is the top reason businesses applied for financing in the 12 months prior to the survey, with 65% of US businesses reporting they sought financing did so to meet operating expenses.1
UNIVERSITY OF GEORGIA | 21
ASK THE EXPERT:
USING AI TOOLS FOR YOUR SMALL BUSINESS ROBBIE PARKS, BUSINESS CONSULTANT MEET THE EXPERT Robbie Parks is a business consultant with the University of Georgia Small Business Development Center in Gainesville. She has 20 years of experience in higher education and nonprofit work. Parks is well-versed in marketing, communications, graphic design, brand design and management, process analysis, CRM implementation and administration, SEO and information technology. In 2023 she, along with two UGA SBDC colleagues, put those skills to use to create the Digital Marketing Bootcamp training program. With classes held at 20 locations across the state, this program introduces UGA SBDC clients to the basics of digital marketing and artificial intelligence for business. The class was attended by more than 900 business owners in 2023. Additional Bootcamps will be held in 2024.
WANT TO LEARN MORE ABOUT DIGITAL MARKETING FOR YOUR BUSINESS? REGISTER FOR A DIGITAL MARKETING BOOTCAMP! 22 | SMALL BUSINESS AND ITS IMPACT ON GEORGIA
THE RISE OF ARTIFICIAL INTELLIGENCE Artificial intelligence (AI) has undergone substantial advancements in recent decades, revolutionizing business practices and creating new possibilities. Notably, generative AI has emerged as a significant development, with the launch of ChatGPT in late 2022 making the technology more accessible. There are now numerous AI tools, including Google Bard, ChatGPT for Bing™, HyperWrite, Jasper, DALL·E, and more, which provide immense potential for small businesses. As with most new technology, there are both positive and negative aspects. Being educated on AI will prepare your business as the industry continues to grow.
DIGITAL MARKETING BOOTCAMP ATTENDEES IN WARNER ROBINS IN JULY 2023.
THE BENEFITS OF USING AI IN YOUR BUSINESS CONTENT CREATION Generative AI can efficiently draft a wide range of content such as social media posts, SEO-friendly website content, email campaigns, job descriptions, employee handbooks, operations manuals, and even agile visual content like images and product designs. AI is also useful in idea development, keyword research and information consolidation. CUSTOMER SERVICE AI can provide personalized customer support, increasing retention and overall satisfaction. Chatbots can answer basic questions and provide a self-service 24/7 experience to customers, while AI-powered sentiment detection can identify emotions like frustration and connect the client to a human agent for escalated assistance. By consolidating data from previous purchases, warranties, service history and more, AI can offer proactive recommendations and reminders. INCREASED EFFICIENCY AI can be used to automate repetitive workflows and tasks, assist with project management, analyze existing business data, schedule and post content, manage inventory, transcribe audio and video content, and more. Not only does this practice increase overall efficiencies but it also aids in decision-making and reduction of errors. SECURITY The evolution of AI continues to be a powerful tool, providing real-time monitoring, alerts and response to threats. AI can detect suspicious login attempts, identify weak or compromised passwords, measure suspicious network traffic, analyze security logs for anomalies, use facial recognition to analyze video feeds and automatically alert security personnel and law enforcement.
FULL STORY:
Expertise in Action
ACG SOLUTIONS WORKS WITH UGA SBDC TO EXPAND THROUGH DIGITAL MARKETING When ACG Solutions in Cornelia was looking to expand their family business, they knew they could turn to the UGA SBDC for assistance. A managed IT services provider, the business needed help building its marketing and search engine optimization (SEO) skills. Since they started working with the UGA SBDC, ACG Solutions’ revenue has increased approximately 17%. Employment has grown to 16 full-time staff with a new employee added in Gainesville.
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THINGS TO CONSIDER WHEN USING AI IN YOUR SMALL BUSINESS While AI can be a powerful tool for small businesses, there are considerations to keep in mind: THE RESULTS ARE ONLY AS GOOD AS THE PROMPT A prompt is an input of words, images or audio that is given to the AI model to provide the desired output. The higher quality and more complex the prompt, the more accurate, relevant and useful the AI generated content will be. AI CONTENT CAN BE INCORRECT AI generated content can be wrong; always request citations in your prompts and fact check the provided content. Also, be mindful of the data sources from which your AI tool of choice uses to generate content. LIMIT AI USE TO INSPIRATION Content generated by AI comes from a machine, and machines haven’t mastered the nuance and complexity of human-written content. Use AI for inspiration but never simply copy and paste. AI CONTENT CANNOT BE COPYWRITED Content created solely by AI cannot be copyrighted. In August 2023, the U.S. District Court for the District of Columbia upheld in Thaler v. Perlmutter, “…the Copyright Office acted properly in denying copyright registration for a work created absent any human involvement.”1
24 | SMALL BUSINESS AND ITS IMPACT ON GEORGIA
AI CONTENT CAN BE DETECTED AND PENALIZED AI content detectors are becoming increasingly sophisticated and better at detecting plagiarized and AI generated content. MANY WEBSITES BLOCK AI Information may become less comprehensive as concern over the protection of intellectual property increases. Over 20% of the top websites, including Amazon, Indeed, Pinterest and CNN, are blocking crawler bots from collecting web data for AI use.2 AI IS PREDICTED TO BE SIGNIFICANT LABOR DISRUPTOR According to McKinsey & Co., almost 30% of the hours worked in the U.S. economy could be automated using generative AI by the year 2030.3 As economist Richard Baldwin said at the 2023 World Economic Forum’s Growth Summit, “AI won't take your job. It's somebody using AI that will take your job.”4 If you’d like to know more about harnessing the power of AI for your small business, reach out to your local UGA SBDC office.
SOURCES 1. “Thaler v. Perlmutter.” thomsonreuters.com, Web, 2023. 2. “Websites That Have Blocked OpenAI’s GPTBot CCBot Anthropic Google Extended - 1000 Website Study.” Originality.ai, Web, 2023. 3. “Generative AI and the future of work in America.” McKinsey.com, Web, 2023. 4 “It's not AI that is going to take your job, but someone who knows how to use AI might, economist says.” businessinsider.com, Web, 2023.
BUSINESS INTEREST IN AI
HOW BUSINESSES ARE USING AI
In a survey among UGA SBDC clients, 56% of respondents do not currently use artificial intelligence in their business but the majority are interested in learning more about it.1
Of the UGA SBDC clients that are currently using AI in their business, most are using the tools for marketing, accounting and customer service.1
30%
22%
20%
56%
19%
10%
9% 5%
Ac
he
ke tin Ma r Source: 1. “The PulseCheck Survey: Navigating AI, Finance and HR Dynamics.” UGA SBDC, 2023.
Ot
0%
r
3% g
53%
13%
Sa Hu les ma nR es ou rc es
INTERESTED IN LEARNING ABOUT AI & AUTOMATION
16%
ch
47%
15%
ar
NOT INTERESTED IN LEARNING ABOUT AI & AUTOMATION
Re se
44%
DOES NOT USE AI & AUTOMATION
co un tin Cu g sto me rS er vic e
USES AI & AUTOMATION
28%
25%
UNIVERSITY OF GEORGIA | 25
ASK THE EXPERT:
TOP HUMAN RESOURCES CHALLENGES FOR BUSINESSES LISA RACKLEY, AREA DIRECTOR
MEET THE EXPERT Lisa Rackley is the area director at the University of Georgia Small Business Development Center in Macon. Prior to joining the UGA SBDC, Rackley worked in human resources at a manufacturing facility. Her expertise includes a variety of human resources topics, including employee benefits and recruiting. In a recent UGA SBDC GrowSmart class, a multi-session training course for small business owners, Rackley surveyed the small business attendees to find out what issues are at the top of their list when it comes to human resources in small business. The following four issues quickly became a theme among the attendees. Here are Rackley's recommendations to overcome each of these challenges.
26 | SMALL BUSINESS AND ITS IMPACT ON GEORGIA
CHALLENGE 1: FINDING TALENT
• USE YOUR COMPANY’S CULTURE: One way to attract talent is to show off the best pieces of your company. Communicate your company’s culture, including core values, on your website and in your marketing efforts and application process. • STREAMLINE THE APPLICATION PROCESS: According to Appcast, 92% of employees do not complete online job applications. If your application is online, complete it yourself and see if it is too complicated. Certain roles may gain more applicants if a paper application is also offered. Communicate with your applicants during the process, letting them know when and how they should hear back after their application is submitted. • USE YOUR EMPLOYEES TO RECRUIT: Your current employees are often a great resource when it comes to hiring. If your employees are happy in their current roles, use that as a testimonial with potential hires. Use current employee testimonials on your website and social media. Additionally, many businesses see
success in offering an employee referral bonus. • BE CREATIVE IN YOUR SEARCH: In addition to posting the job on your website and job forums, hold on-site hiring events and open interview times. Think outside the normal pile of applicants and consider hiring veterans, seniors, formerly incarcerated individuals or disabled candidates.
CHALLENGE 2: RETAINING EMPLOYEES
• ESTABLISH A POSITIVE COMPANY CULTURE: Employees want to work for a company that they enjoy being a part of and in a fulfilling role. Develop a positive company culture and integrate it in the daily dealings of your business. Not only will this increase employee morale, but it will also give employees a reason to invest their talent in the company, aside from the paycheck. • EMPLOYEE INCENTIVES: Look for ways to incentivize employees. Monetary incentives are great, but employee meals, event tickets, paid time off and flexible work schedules can also make great strides in an employee’s commitment to the company. • COMMUNICATION: Keep the lines of communication open among all employees. Use internal newsletters or regular meetings to keep employees informed of what is happening in the business and the future goals of the company. Offer cross-training opportunities among different departments to encourage teamwork. Strive to have your employees grow by offering professional development opportunities.
CHALLENGE 3: DEVELOPING AN ONBOARDING PROCESS Developing an onboarding program can be challenging for small business owners, but this is a critical process for new
employees. When an employee starts a new job, they likely know a little about the company and role but need to gain a better understanding of the company as a whole and how their new position fits into the mix. The onboarding process should educate the new hire on all aspects of the company and their individual position. Pair each new employee with a mentor within the business, giving them a personal contact within the company and a guide as they learn their new role.
CHALLENGE 4: EMPLOYEE BENEFITS
Employee benefits are essential for attracting talent and employee retention. According to SHRM, 92% of employees say that benefits are crucial to their overall job satisfaction and almost 3 in 5 say perks and benefits are a leading priority when accepting a job. Health benefits are a great recruitment tool, but many small business owners cannot afford to offer them. Consider offering lower-cost benefit options including life insurance, dental or vision plans. In addition, offer generous paid time off, flexible work schedules and remote work options as you are able.
Expertise in Action
CLIENT GROWS BUSINESS WITH HELP FROM UGA SBDC When Gwen and Larry Collins wanted to purchase their Macon-based specialty manufacturing business, they reached out to Lisa Rackley for assistance. Rackley continues to work with the Collinses providing guidance on FMLA and ACA requirements and conducting HR practices review, covering all aspects of HR. The business has experienced significant growth in the last five years.
UNIVERSITY OF GEORGIA | 27
COMPANIES WITH A STRUCTURED ONBOARDING PROGRAM KEEP 58% OF EMPLOYEES FOR THREE YEARS.1
11%
3.8%
IS THE AVERAGE TURNOVER RATE IN THE U.S., WITH 2.5% ATTRIBUTED TO QUITTING AND 1% ATTRIBUTED TO LAYOFFS OR FIRING.1
62%
OF EMPLOYERS OFFER HYBRID WORK OPPORTUNITIES.2
11%
INCREASE IN APPLICANTS BY MAKING A JOB APPLICATION MOBILE FRIENDLY.1
IT COSTS AN AVERAGE OF $1,400 TO ONBOARD A NEW EMPLOYEE. OVERALL, IT TAKES ABOUT SIX MONTHS FOR A COMPANY TO BREAK EVEN ON A NEW HIRE.1
59%
OF EMPLOYERS OFFER A REFERRAL BONUS AND 23% OFFER RETENTION BONUSES.2 Sources: 1. “Key HR Statistics and Trends in 2023.” forbes.com, Web, 2023. 2. "2023 Employee Benefits.” shrm.org, Web, 2023.
28 | SMALL BUSINESS AND ITS IMPACT ON GEORGIA
BIGGEST HR PAIN POINTS FOR SMALL BUSINESSES
4%
Employee Engagement
12%
Professional Development
19%
Employee Benefits
46% of UGA SBDC survey respondents agree that finding and recruiting quality employees continues to be a challenge. Retaining employees also continues to be a challenge, which has been noted among many clients since the pandemic.1
Higher Compensation
23% 31%
Employee Retention
46%
Talent Acquisition 0%
HOW HR WORK GETS DONE 79% of UGA SBDC client businesses surveyed do not have the resources to hire a dedicated HR professional or do not have the need. To combat this, HR tasks are distributed among employees. Only 10% of SBDC clients surveyed have a dedicated HR professional, with another 10% using a combination of internal employees and outsourced serves to accomplish their HR goals.1
10%
4%
20%
30%
40%
50%
OTHER
DO HAVE DEDICATED HR PROFESSIONAL
79% 10.1% 10.1% 79.8%
DO NOT HAVE DEDICATED HR PROFESSIONAL
Source: 1. “The PulseCheck Survey: Navigating AI, Finance and HR Dynamics.” UGA SBDC, 2023.
UNIVERSITY OF GEORGIA | 29
ABOUT THE UGA SBDC The University of Georgia Small Business Development Center (UGA SBDC) provides business training and consulting services to help small businesses grow and succeed. Working with chambers of commerce, lending institutions and other business development organizations, the UGA SBDC educates business owners on how they can grow their businesses and helps aspiring entrepreneurs improve their chances for success. Considered to be one of the state’s top providers of small business assistance, the UGA SBDC can help in the areas of business planning, market development, access to capital, record keeping and a myriad of other topics through various educational and technical assistance activities. The UGA SBDC is a Public Service and Outreach unit of the University of Georgia and is funded in part through a cooperative agreement with the U.S. Small Business Administration (SBA). The University of Georgia Small Business Development Center is nationally accredited by the Association of SBDCs and SBA.
For more information about our organization, visit:
www.georgiasbdc.org
30 | SMALL BUSINESS AND ITS IMPACT ON GEORGIA
EDITORIAL CONTRIBUTORS: Antonio Barrios Lisa Rackley Robbie Parks Taylor Hafley Micah Shannon Kim Broun Mandula Thrimanne Macy Thomas Beth Melnik
PHOTO CONTRIBUTORS: University of Georgia Marketing and Communications
OUR LOCATIONS 1
ALBANY georgiasbdc.org/albany
10
GWINNETT georgiasbdc.org/gwinnett
2
ATHENS georgiasbdc.org/athens
11 UNIVERSITY
9
14
KENNESAW STATE georgiasbdc.org/kennesaw
11
6
2
10 8
3
3
ATLANTA (2 LOCATIONS) MOREHOUSE COLLEGE & GEORGIA STATE UNIVERSITY georgiasbdc.org/atlanta
12
MACON georgiasbdc.org/macon
4
AUGUSTA georgiasbdc.org/augusta
13
CLAYTON STATE UNIVERSITY georgiasbdc.org/morrow
5
BRUNSWICK georgiasbdc.org/brunswick
14
ROME georgiasbdc.org/rome
6
UNIVERSITY OF WEST GEORGIA georgiasbdc.org/carrollton
15
SAVANNAH georgiasbdc.org/ southern-coastal
7
COLUMBUS georgiasbdc.org/columbus
16 georgiasbdc.org/
4
13 12
7
16
15
1 5 17
GEORGIA SOUTHERN UNIVERSITY southern-coastal
8
DEKALB georgiasbdc.org/dekalb
9
GAINESVILLE georgiasbdc.org/gainesville
VALDOSTA STATE
17 UNIVERSITY
georgiasbdc.org/valdosta
UNIVERSITY PARTNERS:
POWERED BY
The UGA Small Business Development Center (UGA SBDC) is Public Service and Outreach unit of the University of Georgia, funded through a cooperative agreement with the U.S. Small Business Administration. The UGA SBDC is an accredited member of America's SBDC.