NEWSOK: by Scott Meacham. Companies started by entrepreneurs bring money, jobs to Oklahoma’s economy.
At the end of the first quarter of every year, we survey our clients to evaluate the effect of our services on Oklahoma’s economy.
As a citizen of Oklahoma who believes that diversifying our economy will produce the greatest long-term prosperity for our state, I’m happy to report that the results are good.
That’s “good” from multiple standpoints — the first being that entrepreneurs care enough to respond.
About three quarters of the 133 active and past companies surveyed responded. Reporting rates from clients that are active exceeded 90 percent.
It’s important to receive data directly from the trenches to understand the successes that Oklahoma can leverage for greater prosperity across the state.
For example, these entrepreneurial companies reported a 32 percent growth rate in new jobs in 2013. That means 202 new full-time equivalent positions averaging $74,000 in annual wages. (That’s 87 percent higher than Oklahoma’s average wage.)
Annualized payroll for these young businesses was $53.7 million. They raised $47 million in equity and debt capital then leveraged that to generate $92 million in 2013 sales with 78 percent of those sales coming from outside Oklahoma.
Standing on their own, these are big numbers — especially the $70 million coming into Oklahoma from sales to other countries and states.
But when you consider the multiplier effect on the sale of other goods and services across Oklahoma, this impact is an even bigger deal.
“These new companies are essential to the premise that established Oklahoma,” said Roy Williams, president and CEO of the Greater Oklahoma City Chamber.
“They have tremendous economic impact to employees; to the companies they contract for services; to hundreds of suppliers, and so on. Then their employees have more impact on the sale of houses, automobiles and other things. It’s critical that Oklahoma continue to have the institutional and financial assistance to help these companies make it through,” Williams said.
The data from this survey continues to show that it takes approximately five to six years for a company to accelerate its economic impact. This is especially true for job creation, which doubles after about five years.
The multiplier is even stronger for revenue. Respondents in business six years or more reported more than $2.1 million in average revenue — almost seven times that of respondents in business two years or less.
When it comes to entrepreneurship Oklahoma has the know-how and an economic model that works. This survey data is proof.
Scott Meacham is president and CEO of i2E Inc., a nonprofit corporation that mentors many of the state’s technology-based startup companies. i2E receives state appropriations from the Oklahoma Center for the Advancement of Science and Technology. Contact Meacham at i2E_Comments@i2E.org.