Progress Report on Goldman Sachs 10,000 Small Businesses Third Edition

STIMULATING SMALL BUSINESS GROWTH

PROGRESS REPORT ON GOLDMAN SACHS 10,000 SMALL BUSINESSES THIRD EDITION

DEVELOPED BY BABSON COLLEGE IF PROVIDED WITH THE RIGHT MIX OF TRAINING AND SUPPORT, AMERICA’S SMALL BUSINESS OWNERS CAN GROW THEIR COMPANIES AND CREATE MEANINGFUL IMPACT IN THEIR COMMUNITIES. 5 5 : Third Edition are paying are it forward by demonstrates the power in small investing of Progress Report on Goldman Sachs 10,000 Businesses Sachs Small Goldman Report on Progress 10,000 Small Businesses Program data also shows that business and personal relationships built through the program contribute to business growth. The program a marketplace fosters where, at graduation, 85.3% the of participants collaboratingare andwith those each who do other, consistently report and job revenue greater growth. The peer learning approach is also instrumental in highlighting the importance mentoring of others and in advancing the be skill required set to both and a mentee a months after completing 18 the program,mentor. graduates of mentoring an average eight of peopleeach. Based Small on these outcomes, Goldman Sachs 10,000 Businesses business owners. If provided with the right mix training of and support, America’s small business owners can grow their companies and jobs create in the communities where they live and work.

alumni measurably alumni impact 10,000 Small Businesses Revenues of the of participatingRevenues businesses also grew steadily after program completion, with 68.7%, 73.9% participants of and 81.9% reporting increased revenues monthssix and months, 30 18 months, respectively, after program again completion. provide context how this for To compares the broader to 45.0% economy, United of States small businesses surveyed by the National Small Business Association Economic Year-End Report its for 2015 reported increasing their revenues. With sample a greater and participant size data measured from 30 months after program completion, the relationship between strategic actions and business growth can be examined, that revealing certain business changes reported by and jobrevenues creation. Participants who reported opportunities, new pursuing market-based either as (such opening location, a new expanding theirdomestic market) or product/service-based (launching product a new or service or improving an existing product or service), were than 10,000 revenues grow to more likely Small Businesses alumni generally 30 months after completing the program. Program data repeatedly indicates that what’s good for employees is also good business. for 30 At months after program completion, 86.2% the of graduates providing formal training their employees to reported growth, revenue and 84.8% those of providing medical and/or dental coverage their employees to reported growth. revenue participants focuses on a strategy and tactics that will help their grow businesses, thereby increasing and their spurring revenues achieve this, the programjob creation. works with To a network 100 over of local and national partners. PROGRAM IMPACT Findings from this report demonstratethe long-term impact theof program. 10,000 Small Businesses consistently increase and jobs create revenues a longer over period time. Six of months after completing the program, participants of 47.9% reported adding jobs. new This number months 60.9% and increased to at 18 55.7% to at 30 months after the program. This job growth represents a when significantcompared the broader with improvement as 23% United of Stateseconomy, small businesses surveyed by the National Small Business Association its for Economic Year-End Report2015 reported increasing their employees. of number

: Third Edition graduates consistently grow summarizes theprogress 3,500 over of small

10,000 Small Businesses to outpace Small Businessesgraduates continue 10,000 Goldman Sachs the program has 30 month averages and, for the first time, national growth continued growth. data to further demonstrate their

SUMMARY EXECUTIVE Progress Report on Goldman Sachs 10,000 Businesses Sachs Small Goldman Report on Progress 10,000 Small Businesses 10,000 Small This Small report third on Goldman Sachs 10,000 Businesses business owners who completed have the program. With nearly triple inaugural the sample the of program’s size report, and now including data participants for 30 months after they completed the program, results show that The program is designed meet a specific to need in the market—reaching past the start-up phase in order teach to established The businesses curriculum grow. how to helps business owners craft and implement a growth plan that Growth is seen across the board and a is limited not to specific industry or demographic. It comes from business owners different of ages (24 77), to education (some levels high school advanced to degrees) and genders (45.5% acrossfemale), more than industry a dozen groups. their revenues and jobstheir create revenues thatrates at outperform the broader economy.

4 7 OF THE PROGRAM 99% COMPLETION RATE

ANDREW CHMIELEWSKI ANDREW CHMIELEWSKI TOOTH DAVE’S SWEET MI DETROIT, SMALL BUSINESSES GRADUATE 10,000

FOR GROWTH FOR ACTION

BANKABLE

BEING

& PROCESSES & OPERATIONS OPERATIONS

MARKETING MARKETS & & MARKETS 5 Hathaway chairman and CEO and Harvard Business School and the Initiative a Competitive for Michael Inner City’s Dr. with practical a program the entrepreneurs provides Porter, business and management education, business support services and access capital. to

Legal Clinic Legal

PEOPLE IT’S THE THE IT’S

THE LEADER THE Y O U A R E E R A U O Y Negotiations Clinic 3 : Third Edition is a public-private

You Are the Are the You

Lender Clinic Lender & METRICS & MONEY 2

10,000 OPPORTUNITIES

Workshops I & II Workshops GROWTH & & GROWTH Financial Statements Financial Statements

BUSINESS YOU & YOUR YOUR & YOU

10,000 Small 10,000 Kingdom, States and the United sites across the United 31 With The program has small business owners. Businesses has served over 6,100 D.C. all 50 states, Puerto Rico, and Washington, reached business owners from ORIENTATION

SMALL BUSINESSES ABOUT Progress Report on Goldman Sachs 10,000 Businesses Sachs Small Goldman Report on Progress CURRICULUM Goldman Sachs 10,000 Sachs Goldman Small Businesses partnership unlock to the growth and job-creation potential smallof businesses. Led by co-chairs Lloyd Blankfein, Goldman Sachs chairman and CEO, Michael R. Bloomberg, president and CEO founder, and 108thBloomberg L.P. Mayor the of City Warren Buffett, New of York, Berkshire

6 9 9 5 12 10 11 8 8 13 11 3 2 4 4 NATIONAL PROGRAM NATIONAL The program is available to business to business program is available The from all 50 states, Rico owners Puerto through the blended D.C. Washington and program (part on-line, part face-to-face) at including in-person sessions delivered MA. Wellesley, College in Babson 1 9 100 6 Rhode Island Salt Lake CitySalt Lake New New York City NATIONAL PARTNERSHIPS NATIONAL Philadelphia

Miami Orleans New THE NUMBER OF LOCAL AND LOCAL THE NUMBER OF 8. 9. 10. 11. 12. 13. 5 3 CAPITAL + EDUCATION SITES + EDUCATION CAPITAL Cleveland Dallas Detroit Houston Beach Long Los Los Angeles Chicago

1. 2. 3. 4. 5. 6. 7. U.S. DELIVERY SITES DELIVERY U.S. 2 50 7 13 1 PROGRAM HAS REACHED HAS PROGRAM San Francisco Area Bay Virginia Washington Oregon North Carolina Pittsburgh THE NUMBER OF STATES THE THE STATES THE NUMBER OF 8. 9. 10. 11. 12. 13. 10 9 6 7 CAPITAL SITES CAPITAL 12 Colorado Georgia Kentucky Maine Minnesota Montana Arizona 1. 2. 3. 4. 5. 6. 7.

8 8

80,000 + THE TOTAL EMPLOYEES OF OF EMPLOYEES TOTAL THE PARTICIPANTS’ BUSINESSES PARTICIPANTS’ HAS SERVED HAS 6,100 THE NUMBER OF SMALL BUSINESSES THE PROGRAM BN 5 $ + 10,000 SMALL 10,000 THE TOTAL REVENUES OF REVENUES OF TOTAL THE PARTICIPANTS’ BUSINESSES PARTICIPANTS’ BUSINESSES ABOUT ABOUT

8 11 10 11 WHO ARE THE10,000 BUSINESSES SMALL BUSINESSES ? Business Formation

Program participants represent the broad spectrum of American entrepreneurs, demonstrating the diversity of small businesses across the United States. Irrespective 80.3% 52.5% 27.8% of age, educational level, gender or industry representation, participant businesses FOUNDED OR CO-FOUNDED STARTED THEIR STARTED THEIR BUSINESSES are growing revenues and creating jobs to a greater extent than the overall U.S. small THEIR BUSINESSES BUSINESSES ALONE WITH OTHERS business population1. The median revenues reported by program participants is $716,146 and the median number of employees reported is 11.

PARTICIPANTS

Age Range Generations

50% 35.9% – 13.3% 0.7% 24 77 YRS Median Number of Employees Median Revenues Family Owned With a median age Millennials2 Gen X3 Baby Traditionalists5 of 47 years Boomers4

Gender Education 11 $716,146 45.2%

Participants’ educational levels range from some high Median revenues reported Nearly half describe their businesses by program participants as family-owned 45.5% 54.5% school or a GED through graduate degrees

1. According to National Small Business Association’s 2015 Year-End Economic Report report, 23% of United States Small Businesses surveyed reported increasing their number of employees and 45% reported increasing their revenues. 2. Born between 1980 and 2000. 3. Born between 1965 and 1979. 4. Born between 1946 and 1964. 5. Born between 1900 and 1945.

Progress Report on Goldman Sachs 10,000 Small Businesses: Third Edition Progress Report on Goldman Sachs 10,000 Small Businesses: Third Edition 13 13

10,000 Small10,000 Businesses I learned those tools

take took we the advantage, market by storm! first to market,cutting edge technology only we did not 2,000 percent people, more growth and a 4 years, 24 in ” Corporation (PIDC) we raised the capital. raised we over With Corporation (PIDC) Through and Philadelphia through Industrial Development business tools to access capital and take advantage. available but needed we and the foresight, courage Modeling and many other opportunities became technological advances Building in Information Innovative people, mergersInnovative and acquisitions, new “ MICHAEL BROWN ENVIRONMENTAL CONSTRUCTION SERVICES, INC. INC. SERVICES, CONSTRUCTION ENVIRONMENTAL PHILADELPHIA, PA SMALL BUSINESSES GRADUATE 10,000

12 15 15 0.6% 0.6% 2.0% 2.0% 3.2% 3.2% 5.3% 5.3% 9.5% 9.5% CONSTRUCTION HEALTH CARE & HEALTH & WAREHOUSING MANAGEMENT OF MANAGEMENT TRANSPORTATION SOCIAL ASSISTANCE FINANCE & INSURANCE COMPANIES & ENTERPRISES COMPANIES 1 0.9% 0.9% 2.3% 2.3% 6.7% 6.7% 3.9% 3.9% 9.6% 9.6% OTHER & LEASING INFORMATION ACCOMMODATION OTHER SERVICES OTHER & FOOD SERVICES REAL ESTATE RENTAL REAL ESTATE

10,000 10,000 2.9% 2.9% 1.5% 1.5% 5.1% 5.1% 7.4% 7.4% 39.1% 39.1% RETAIL TRADE RETAIL MANUFACTURING WHOLESALE TRADE & TECHNICAL SERVICES & EDUCATIONAL SERVICES EDUCATIONAL PROFESSIONAL, SCIENTIFIC PROFESSIONAL, Business IndustryBusiness Distribution WHO THE ARE ? BUSINESSES SMALL 1. Except1. public administration.

YRS

150 – With a median age of 12 yearsWith a median age of 12

BUSINESS AGE BUSINESS AGE RANGE 2

EDINSON ARENAS AZTECA MEXICAN CANDY DALLAS, TX DALLAS, SMALL BUSINESSES GRADUATE 10,000

14 PROGRAM IMPACT 10,000 SMALL

Results are seen at 6 months after graduation, and notably businesses are still growing 18 months and 30 months after BUSINESSES completing the program. PARTICIPANTS ARE MORE LIKELY TO REPORT REVENUE GROWTH AND JOB CREATION THAN U.S. SMALL BUSINESSES GENERALLY. REVENUE GROWTH JOB CREATION

% of 10,000 Small Businesses Alumni Who Increased Revenues % of 10,000 Small Businesses Alumni Who Created Jobs

81.9% 68.7% 73.9%

45% 23% 47.9% 55.7% 60.9%

% of U.S. Small Businesses That Grew Revenues in 20151

% of U.S. Small Businesses That Added At 6 Months At 18 Months At 30 Months Jobs in 20152

At 6 Months At 18 Months At 30 Months

1. The National Small Business Association (NSBA) Year-End Economic Report. (2015). Retrieved March 24, 2016 from http://www.nsba.biz/wp-content/uploads/2016/02/Year-End- 2. The National Small Business Association (NSBA) Year-End Economic Report. (2015). Retrieved March 24, 2016 from http://www.nsba.biz/wp-content/uploads/2016/02/Year-End- Economic-Report-2015.pdf Economic-Report-2015.pdf GROWTH OPPORTUNITIES AND ACTION 10,000 Small Businesses Alumni Who 10,000 Small Businesses Alumni Who Opened a New Location Launched a New Product or Service

Certain business changes reported by 10,000 Small Businesses alumni measurably impact revenues and job creation at both the 18-month point and 30-month point. % WHO INCREASED % WHO ADDED % WHO INCREASED % WHO ADDED REVENUE JOBS REVENUE JOBS As the data shows, program alumni who expanded markets and modified products, grew even more than 10,000 Small Businesses alumni generally. 76.6% 84.5% 88.7% 60.5% 74.3% 77% 68.9% 80.7% 88.5% 52.4% 63.3% 68.1%

10,000 Small Businesses Alumni Who Reported Domestic Market Expansion

% WHO INCREASED REVENUE

87.5% 76.3% At 6 At 18 At 30 At 6 At 18 At 30 At 6 At 18 At 30 At 6 At 18 At 30 65.1% Months Months Months Months Months Months Months Months Months Months Months Months

10,000 Small Businesses Alumni Who 10,000 Small Businesses Alumni Who Improved an Existing Product or Service Stopped an Unprofitable Product or Service

At 6 Months At 18 Months At 30 Months % WHO INCREASED % WHO ADDED % WHO INCREASED % WHO ADDED REVENUE JOBS REVENUE JOBS

69.7% 77.1% 86% 49.3% 59.1% 64.4% 68.3% 73.4% 84.4% 46.8% 51.1% 58.6%

% WHO ADDED JOBS

74.8% 65% 49.5%

At 6 Months At 18 Months At 30 Months At 6 At 18 At 30 At 6 At 18 At 30 At 6 At 18 At 30 At 6 At 18 At 30 Months Months Months Months Months Months Months Months Months Months Months Months 21 21

“ I uncovered my own unconscious bias that equated small business with inferior business. Small is a size, not a value judgment. That realization opened a door through which I ran, seeking meaningful collaborations and larger contracts, armed with more joy, power and confidence. ”

CARLA WALKER-MILLER WALKER-MILLER ENERGY SERVICES DETROIT, MI 10,000 SMALL BUSINESSES GRADUATE 23 23 : Third Edition

74.8%

58.6% 55.9%

41.6% +17% 33.1% Progress Report on Goldman Sachs 10,000 Businesses Sachs Small Goldman Report on Progress % of Alumni Who Provide Coverage % of Businesses Reporting Growth That Provide Coverage to All or Most Employees Created Jobs at 18 Months at 18 Created Jobs Increased Revenue at 18 Months at 18 Increased Revenue Upon Entering The Program Upon Entering To All or Most Employees at 18 Months Months All or Most Employees at 18 To Coverage Provide Additional 17% An Months Employees at 18 to Some EMPLOYEE BENEFITS EMPLOYEE

86.1% 79.4% 74.2% 56.9% participants that reported providing training and benefits Upon Entering The Program Upon Entering WORKFORCE DEVELOPMENT DEVELOPMENT WORKFORCE BENEFITS AND EMPLOYEE Data supports that what’s good employees for is good business. for 10,000 Small Businesses increased after graduation,and showed similar growth and job creation to alumni generally. TRAINING WORKFORCE % of Businesses That Provide Training % of Businesses Reporting Growth Training Provide That Increased Revenue at 18 Months at 18 Increased Revenue Created Jobs at 18 Months at 18 Created Jobs To All or Most Employees at 18 Months All or Most Employees at 18 To

BUSINESS. BUSINESS.

IS GOOD FOR IS GOOD

FOR EMPLOYEES EMPLOYEES FOR WHAT’S GOOD GOOD WHAT’S

22 25 25 : Third Edition 32.3% 85.8% 78.6% At 30 Months Decrease in participants reporting Decrease in participants at the bank they didn’t know anyone – Progress Report on Goldman Sachs 10,000 Businesses Sachs Small Goldman Report on Progress 77.9% 68.7% At 18 Months At 18 9.5% Increase in participants reporting Increase in participants strong bank relationships + Correlation of Bank Relationship to RevenueGrowth Bank Relationship at 18-Month Check-In STRONG RELATIONSHIP RELATIONSHIP STRONG WITH THE BANK RELATIONSHIP WEAK WITH THE BANK 71.2% 87.1% At 30 Months At 30 Months 80.8% 64.4% At Months 18 At Months 18 % WHO ADDED JOBS alumni. % WHO INCREASED REVENUE : Third Edition 75% At 6 Months 54.4% Progress Report on Goldman Sachs 10,000 Businesses Sachs Small Goldman Report on Progress Impact of Acquiring Capital from Financial Institutions on Revenue Growth/Job Creation Growth/Job Revenue on Institutions Financial from Capital Acquiring of Impact Capital driver works business of as a key growth. Program data consistently illustrates that acquiring capital leads higher to revenues and job creation among 10,000 Small Businesses ACQUIRING CAPITAL ACQUIRING At 6 Months

24 27 27 66.5% : Third Edition At 30 Months

alumni increase % WHO ADDED JOBS Progress Report on Goldman Sachs 10,000 Businesses Sachs Small Goldman Report on Progress At Months 18 58%

87.3% At 30 Months 8 Alumni Who Collaborated with Others with Collaborated Who Alumni % WHO INCREASEDREVENUE The average number of people 10,000 Small months Businesses alumni are mentoring at 18 program completion after At Months 18 MENTORING Program data shows that business and personal relationships built throughthe program contribute to business growth. The program a marketplace fosters where 85.3% graduates of do business together. Those who collaborate with each other consistently report and jobs revenue greater growth. COLLABORATION 78% Networks, advising and mentoring an important are part the of growth process. Not only do participants benefit“payforward” from it being mentored, alsothey by mentoringteaching and others.to skills theFrom start months the after of program completion, 18 to 10,000 Small Businesses their focus on mentoring, nearly doubling the number people of they mentor. Businesses Small 10,000

TOGETHER.

DO BUSINESS DO BUSINESS

GRADUATES GRADUATES 85.3% OF 85.3%

program in April 2014, I have grown I have my April in program 2014,

2,000 stores across the country. distribution from 400 stores the in tri-state to area natural distributornatural North in America and extend my to negotiate add a value contract with the largest ” has been the negotiations module because I was able take Small from the away 10,000 Businesses program to see sales reach $1.9 million in 2016. My greatest My million 2016. in to see sales reach $1.9 business by 135% in 2014 and again in 2015. I expect 2015. in and again 2014 in business by 135% Businesses Since completing the Goldman Small Sachs 10,000 “ MARY MOLINA MARY LOLA GRANOLA BAR NY FALLS, CROTON SMALL BUSINESSES GRADUATE 10,000

28 31 31 10,000 Small10,000 Businesses I learned a negotiationthat is a not energy services Franklin Energy, company, to win a two year encouragement, legal services, construction and supplies and double my employees, thereby contributing to changing and Metrics module financial about statements led of oneto the lives Detroit in through increased access to energy efficiency.” fight; you don’t have have to for lose me thisfight;Using to win. approach, you don’t but after the part that course of I realized important how they huge turning point for me for as point a business turning huge owner and the Money doubled to track have on exceed and are we growth 100% again them on I rely advice, for becomehave my family. part of were to our operation...Since graduating the revenues graduating program, towere operation...Since our usedfinancial my worksheets to make decisionsin my business, me grounded.” this year.” Small 10,000 to of my growth. The alumni Businesses they been have equally instrumental my growth in and keep program ‘aha’ moments me. for I had Before never the program ‘aha’ program $48 million energy$48 services contract a midwest for utility. I was able to act as the prime contractor to team with a majority Through thisThrough was I able to increase my revenues by 400%, “In “The Goldman Small Sachs 10,000 Businesses was a program “The Small 10,000 Businesses has been program instrumental

ENERGY SERVICES ENERGY MI DETROIT, SMALL BUSINESSES 10,000 GRADUATE ANDREW CHMIELEWSKI TOOTH DAVE’S SWEET MI DETROIT, SMALL BUSINESSES 10,000 GRADUATE CARMEN RODRIGUEZ CUPCAKE BROOKLYN NY BROOKLYN, SMALL BUSINESSES 10,000 GRADUATE CARLA WALKER-MILLER CARLA WALKER-MILLER WALKER-MILLER has a Net The NPS scale 2

The NPS is based on a direct question: How likely 1

is used across both large, highly recognized companies and smaller social programs. 10,000 Small Businesses Promoter Score +92. of togrow.” are you to recommend to you are our company/product/service to your friends and colleagues? An NPS can be as low as -100 (everybody (everybody is a detractor) or as high as +100 Anis a promoter). NPS that is positive than greater (e.g., be to good, is felt zero) and an NPS +50of or, is excellent, in Reichheld’s terminology, “World Class.”

: Third Edition

10,000 SMALL

The program’s 99% completion rate and Net Promoter Score rate and Net Promoter Score The program’s 99% completion value. program’s education the of measures important two are BUSINESSES

OF PARTICIPANTS’ VIEWS VIEWS PARTICIPANTS’ Progress Report on Goldman Sachs 10,000 Businesses Sachs Small Goldman Report on Progress 1. Reichheld1. (2003). F. One number you need to grow. Harvard Business Review, (December), 81, 46-54. Net Promoter Scale is a registered2. Reichheld trademark The (2011). Ultimate F. of Satmetric. Question 2.0 (Revised and Expanded Edition): How Net Promoter Companies Thrive in a Customer-Driven World. Bain and Company. Another measure success of is whether or a participant not would recommend the program other small to business owners. The (NPS) “Net Promoter Score” is a customer loyalty metric introduced Reichheld by Fred in his 2003 Harvard Business Review article, number “One need you The retention rate for the programThe for rate retention across the country remains at 99%. Two importantTwo measures educational of program success studentare completion and satisfaction rates.

30 33 31

10,000 Small Businesses: Third Edition Third 10,000 Businesses: Sachs Small Goldman Report on Progress The 6-month data was collected respondents from 1,921 (out 2,535 of possible respondents), resulting in a response the 18-month 76%; of rate data was collected from 833 resulting respondents), possible 1511 of (out respondents and the 30-monthin a response 55%; of rate data was collected from 368 respondents (out806 of possible respondents), resulting in a response 46%. of rate The number completed of surveys at each time will continue increaseto as small business owners continue complete to program. the and the number and type employees. of The validation process the available utilizes data on each participant such as the participant’s input on the application and surveys and financial of the review documents. The target validation rate survey of respondents is 100% baseline for and graduation surveys and 50% follow-up for surveys. For this report, the baseline data is based on the 3,615 responses collected from the possible 3,620 survey respondents resulting in a response 99.9%. of rate Similarly, the graduation survey achieved a response 98% of rate (3,260 out 3,331 of possible respondents).

of revenues, employees, business management, management, business employees, revenues, of business planning, access capital, to networking and business challenges. This survey is administered prior the firstto curriculum moduleto allow participants and faculty the opportunity the diagnostic review to results in class. Subsequent surveys enable changes in the same variables be to tracked time. The over graduation survey is administered the last before module and the follow- up survey is administered 6, and 30 18, months after graduation. In the order accuracy ensure to data key points of collected from participants, randomized data validation is performed by the local program staff after each survey is administered. This also helps that ensure the reported results reflect the true changes participants for and their businesses and confirms participants’ understandingof their businesses. Validation is conducted on two data key points: revenues The baseline survey is determine intended participants’ to circumstances prior entering the program, to in terms

: Third Edition Measurement and and Measurement

10,000 Small Businesses

is built on a robust platform of platform of is built on a robust Small Businesses 10,000 continuous Evaluation in order to facilitate Measurement and of impact and provide evidence learning and improvement, and transparency. promote accountability METHODOLOGY Progress Report on Goldman Sachs 10,000 Businesses Sachs Small Goldman Report on Progress The program participants respond standardized to surveys when they begin the program survey), (the “baseline” upon graduation, and then approximately months, 6 months, 18 and 30 months after their completion the of core program. These surveys administered are via an online survey system. of theof collected data. The The key metricsThe the key of program job are creation and business growth. revenue These provide a framework Evaluation (M&E) process is designed be to simple and valuable everyone for in the program, and it that ensures all partners fully are equipped administer to and benefit M&E the from system. monitor theto goals the of program while also allowing adjustmentsfor that ensure it has to a strong and positive impact in the communities where it is active. The surveys informationask other relevant in addition the revenues to and employment numbers, and this report some utilizes