Community approaches to supporting entrepreneurs
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Community Approaches to Supporting Entrepreneurs. TPOCD Alumni Course March 2013. Co-Facilitators. Today’s Co-Facilitators: Scott Loveridge Director, North Central Regional Center for Rural Development [email protected] Mark Brodziski, Director Specialty Programs Division

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Community Approaches to Supporting Entrepreneurs

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Community approaches to supporting entrepreneurs

Community Approaches to Supporting Entrepreneurs

TPOCD Alumni Course

March 2013


Co facilitators

Co-Facilitators

  • Today’s Co-Facilitators:

  • Scott Loveridge

  • Director, North Central Regional Center for Rural Development

  • [email protected]

  • Mark Brodziski, Director

  • Specialty Programs Division

  • [email protected]

  • John H. Broussard, Director,

  • Business and Industry Division

  • [email protected]


Special shout out

Special Shout-Out

Dave Sears, USDA Rural Development

Chelsea Takahashi, USDA Rural Development Truman Fellow


Chat box

Chat Box

  • Please tell us where your office is located!

    • State

    • City


What got you interested in this class

What Got YOU Interested in this Class?


What is an entrepreneur

What is an Entrepreneur?

  • Depending on who is talking, it might be:

    • Small business owner

    • An exporter

    • The owner of a multi-national corporation

    • Someone starting a non-profit

    • A non-profit administrator

      • Example: largest employer in my township is Delta Dental, a non-profit insurer. Their square footage & employment doubled in the past ten years.

    • A division manager in a large for-profit


How does this lack of common definition affect community development

How does this lack of common definition affect community development?

Same, word, but different definitions  lack of agreement on how to help them


Goldilocks dilemma in entrepreneurship

Goldilocks Dilemma in Entrepreneurship

  • Three Camps on Business Size

    • Small business

    • “Stage 2” firms

    • Large business


Small business advocate arguments

Small Business Advocate Arguments

  • Most job growth comes from small business

  • Small businesses are more likely to be loyal to the community

  • Large businesses are hard to recruit—

    • Must give financial incentives

    • Firms moving to rural areas are looking to cut wage costs—low skill, low wage jobs

    • “Use up” incentives and move on


Stage 2 advocate arguments

“Stage 2” Advocate Arguments

  • Stage 2 firm=already some employees but eager to grow; probably more than 3 years old

  • Arguments:

    • Most small businesses aren’t entrepreneurial—just looking to make a living for the owner (e.g. convenience store; card shop)

    • Most small businesses die within first three years

    • Stage 2 firms have lived through the valley of death and want to increase in size, so most growth potential


Large firm advocate arguments

Large Firm Advocate Arguments

Small firms pay poorly and don’t generate much in the way of economic multiplier effects

Smaller firms may generate jobs in the long run, but we’re hungry now

Large firms “demonstrate” that our community is viable—if we give the next one a subsidy, others will follow


Which arguments make the most sense in your area

Which Arguments Make the Most Sense in Your Area?

Small

Medium

Large


Loveridge research on role of firm size in economic development

Loveridge Research on Role of Firm Size in Economic Development

It DEPENDS


Classic small firm approaches

“Classic” Small Firm Approaches

Revolving loan fund

Business start-up seminars

Counseling

Incubators

Q: Have these been tried in your area? If yes, what happened?


Usda programs that fit classic small firm approaches

USDA programs that fit “classic” small firm approaches

Rural Business Enterprise Grants (RBEG), Intermediary Relending Program (IRP), and Rural Economic Development Loan and Grant (REDLG) program:

RLF or other local project by a city or county

Project-specific facility or request

Value Added Producer Grant to single agricultural producer


New small firm approaches

“New” Small Firm Approaches

  • Sector-specific counseling

    • Case Study: MSU Product Center

  • ANGEL Investors

  • Fast-pitch sessions

  • Economic Gardening

  • “Slave”—(Sirolli approach)

  • Amenity-led development

  • Has anyone tried anything like any of these?


Which usda programs might fit new small firm approaches

Which USDA Programs Might Fit “New” small firm approaches

Intermediary Relending Program (IRP) and Rural Business Enterprise Grants (RBEG)

Industry-specific or sector focused initiatives

Microloans

Value Added Producer Grant—mid-tier

Rural Energy for America Program—energy audits and development assistance


Classic 2 nd stage approaches

Classic 2nd Stage Approaches


New 2 nd stage approaches

New 2nd Stage Approaches

  • Peer-to-Peer networking

  • Highly publicized “Awards”

    • 50 Companies to watch -versus-

    • “Entrepreneur of the Year”


Which usda programs might fit second stage approaches

Which USDA Programs Might Fit Second Stage Approaches?

Intermediary Relending Program – larger loans

Rural Economic Development Loan and Grant program

Business & Industry Guaranteed Loans

Rural Energy for America Program


Classic large firm approaches

“Classic” Large Firm Approaches

Lone Ranger retention and expansion program

Industrial parks (speculative)

Industrial investment incentives

Tailored infrastructure


New large firm approaches

New Large Firm Approaches

Cluster gap analysis/regional coordination

Workforce training in lieu of infrastructure or tax breaks

Supplier/customer (value chain) recruitment in lieu of “y’all come” recruitment


Which usda programs might fit large firm approaches

Which USDA Programs Might Fit Large Firm Approaches?

Rural Economic Development Loan program

Business & Industry Guaranteed Loans

Advanced BioFuels Guaranteed loan program


Size neutral approach

Size-neutral Approach

Michigan State University Extension “Creating Entrepreneurial Communities” program


What s missing

What’s Missing?

Are there enough programs for all the approaches?

What are barriers to implementation?

What might be some other means of bringing capital to rural communities?

How can community organization for business development be strengthened?


Final question

Final Question

Based on what we discussed today, what are the major local business development opportunities for you in your work with USDA Rural Development?


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