rural entrepreneurship: best practices & practical advice chuck palmer iowans for social &...
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Rural Entrepreneurship: Best Practices & Practical
Advice
Chuck Palmer
Iowans for Social & Economic Development
Des Moines, IA
Iowans For Social & Economic Development: Mission, Vision & History
Mission: To create opportunities for low and moderate income Iowans to increase income and
achieve financial stability.
Vision: To see vibrant Iowa communities where all families and individuals have the opportunity to
find financial stability and success.
ISED’s Work in Microenterprise Development
ISED Provides Comprehensive Small Business Education Courses & Technical Assistance Business Plan Creation Financial Plan Analysis Market Research Viability Assessment Start-up Support Access to microenterprise resources Access to other asset building & supportive services
Through our classes and supportive services: 2,172 individuals have been assisted to start, expand, or
strengthen their businesses 5,995 clients have completed our microenterprise training Over 10,000 of our clients have been involved in
microenterprise program classes Over $11.3 million in business capital has been accessed
A Road Map to Rural Entrepreneurism
1. Microenterprise & how can it benefit your community
2. Characteristics of a Successful Entrepreneurial Community
3. Components of a Successful Microenterprise Development Program
4. The Microenterprise Growth Continuum
5. Feasibility Studies & Business Plan Building
6. Challenges & Gaps
7. Overcoming Challenges & Gaps
8. Success in Practice: 9 Successful Community Intervention Strategies
9. Now What: Building Your Own Successful Community Strategy
What is Microenterprise?
A small business that: Has 5 or fewer employees Requires seed capital less than $35,000
Often utilized as an economic development strategy and has gained momentum as a poverty alleviation strategy as well
What could microenterprise development do for my community?
A 2004 Aspen Institute study of 17 micro-enterprise development organizations found that their 560 microenterprises: Generated $43.8 million in revenues Provided $6.8 million in income for owners
and also Employed 648 full-time workers
Characteristics of a Successful Entrepreneurial Community
Demonstrates leadership and promotes successful role models.
Provides training and technical assistance at both the youth and adult education levels… focus on financial literacy and asset development.
Develops community networks of support, mentoring, and financial assistance… focus on improving access to a broader marketplace.
Fosters a culture that recognizes and values entrepreneurship.
Provides access to start-up capital. Supports & engages all dimensions of diversity
Components of a Successful Microenterprise Development
Program
Training and Technical Assistance
Credit and Access to Credit
Access to Markets
Economic Literacy and Asset Development
Microenterprise Growth Continuum:Women Economic Ventures (WEV) Program, CA
Feasibility: the Fundamental FiveHow ready is your community?
1. Market Feasibility Who is the potential customer? What is the customer’s profile (age, income, buying
habits)? What is the customer’s industry status? What market volume will you need? What will the market reaction be to your service or
product? How will you package and distribute your product(s) or
service(s)?
2. Organizational Feasibility What skills will the owner need? How much time will the business demand? What types of personnel will you need (quantity & skills
needed)? Are the personnel types that you are seeking readily
available in your community? How will the business responsibilities be distributed
across personnel?
Feasibility: the Fundamental FiveHow ready is your community?
3. Technical Feasibility Are there business locations that are available, cost effective
and have the right zoning/codes? How will production of the product work? Who will be the suppliers? What is your business volume capability? Do you have the availability of leasing commercial space? What are the regulations that are associated with your
product? What insurance will you need & what are the costs of that
insurance?
4. Competitive Feasibility What or who is your existing competition? What is your competitive position? What are the potential reactions of your competitors? How great is the potential for new competition? How can you differentiate yourself from your competition?
Feasibility continued…
5. Financial Feasibility How much capital is needed (fixed costs, start-up
costs & working capital for 1-3 months)? How much capital does the owner have available? How much capital is available from private investors? How much capital remains that needs to be borrowed? What is the income and profit potential of the
business? Basic Cash Flow Owner’s living Costs Loan Repayment Operating Costs Break-Even Analysis
Components of a Successful Business Plan
Can your community support entrepreneurs in understanding and developing these business
components?
Introduction Give a detailed description of the business and its goals Discuss ownership of the business and its legal structure List the skills and experience you bring to the business Discuss the advantages you and your business have over your
competitors
Marketing Discuss the products and services that your company will offer Identify customer demand for your products and services Identify your market, it’s size and locations Explain how your products and services will be advertised and
marketed Explain your pricing strategy
Components of a Successful Business Plan…continued
Financial Management Explain your source and the amount of initial capital Develop a monthly operating budget for the first year Develop an expected return on investment and monthly cash flow for the first
year Provide projected income statements, balance sheets for a two your period Discuss your break-even point Explain your personal balance sheet and method of compensation Discuss who will maintain your accounting records and how they will be kept Provide “what if” statements addressing alternative approaches to problems
that may develop
Operations Explain how the business will be managed day-to-day Discuss hiring, personnel procedures Discuss insurance, lease, or rent agreements, and issues pertinent to your
business Account for the equipment necessary to produce goods or services Account for production and delivery of products and services
Challenges Faced by Many Rural Communities
Geographically Isolated
Changing Demographics
Aging…people and places
High Unemployment
Low Wage Jobs
Changing Economic Base
Seasonal Employment
Key Entrepreneurial System Gaps to Overcome
Capital Gap
Information and Knowledge Gaps
Institutional Gaps for Training and Technical Assistance
Delivery and Coordination Gaps
Cultural Gaps
Strategies to Overcome Challenges & Gaps
Engage youth and retirees
Foster competitive creativity
Utilize technology to expand capacity and broaden the market
Continue to build capacity in the community through workshops, events and networking
Seek out creative financing options (cooperative funding models or charitable asset pools)
Foster strategies that will engage minority populations in the community and ensure an equal share of potential prosperity to all community members
The Nebraska Center for Leadership Development: A holistic approach
Hometown Competitiveness is a project of the Heartland Center for Leadership Development, the Nebraska Community Foundation, and the Center for Rural Entrepreneurship. Their comprehensive approach encourages communities to take action in four strategic areas. Leadership development: to strengthen the capacity of
residents to improve and sustain their community. Youth development: to support and enhance the idea of
adults and youth working together to create opportunities for youth to stay in or return to the community.
Developing charitable assets: to strengthen and sustain charitable giving at the local level in order to build an endowment that will sustain local civic institutions and create a new source of opportunity capital for community economic development efforts.
Entrepreneurial development: to identify and assess entrepreneurial talent in the community and to devise an economic development strategy to increase entrepreneurial business development
MyEntreNet: Capacity building through online strategies
In 2001, the University of Northern Iowa made a pilot investment in rural economic vitality with the development of an entrepreneurial development system.
Goal: develop a sustainable model that connects geographically isolated entrepreneurs to services and people to become competitive in a global economy
Provides a technological bridge & community capacity building for entrepreneurs both in person and online.
Based upon four key principles: Community Empowerment, Business Assistance, Capitalization and Networking.
AUSA: Fostering Hispanic entrepreneurship in rural communitiesACCION USA (AUSA) Hispanic Microloan Project
With the support of the Northwest Area Foundation, AUSA is helping diversify and strengthen the economies of rural communities by providing credit and other financial services to rapidly-growing rural Latino communities. AUSA’s service strategy has three components: 1. Loans: AUSA will disburse microloans directly to self-employed
residents of these communities, using its Internet and telephone loan application systems. Small business loans of $500 to $25,000 will be provided in addition to $500 Credit Builder loans for low-to-moderate income individuals who do not have a credit history.
2. Outreach and Marketing: AUSA will conduct grassroots outreach and marketing activities to inform community residents of its services.
3. Capacity Building: AUSA will conduct a series of training activities with local groups and organizations to enable them to help individuals access their services and to continue with outreach activities to ensure continuity beyond the timeline of the project.
Shop the Frontier Non-profit rural marketplace on the Internet
Shop the Frontier is a project of Stone Soup, a nonprofit organization based in Washington and serving the Pacific Northwest.
Mission: to create sustainable rural economies by teaching the skills necessary to thrive in the 21st century.
Shop the Frontier is a project of Stone Soup, a nonprofit organization based in Washington and serving the Pacific Northwest.
Their mission is to create sustainable rural economies by teaching the skills necessary to thrive in the 21st century.
http://www.shopthefrontier.com/VFstore/
5 More Examples of Successful Rural Community Intervention Strategies
Access e-Commerce Workshops Conducts workshops in seven communities to enhance business skills
and knowledge on the use of internet marketing and e-commerce to augment business profitability.
Crawford County Entrepreneur Development Network Identifies local entrepreneurs, identify local entrepreneurial needs
and organizes local training and networking meetings to assist entrepreneurs.
Mount Pleasant Area Business Plan Competition Created an annual, locally sponsored business plan competition.
Winners have included an injection molding company, a bed and breakfast venture involving a historical venue, and an upscale kennel and pet care business.
Carroll County Entrepreneur Coaching and Mentoring Network Organizes local coaching and mentoring network to provide for
training, sharing ideas for solving problems related to entrepreneurship.
Micro Enterprise Entrepreneur Workshops Conducts a series of training workshop for micro-enterprise
entrepreneurs in Red Oak, Villisca, and Mount Ayr, and one additional community at $2,500 per community.
Now What? 1. Build Community Leadership Build Leadership
Create a planning group made up of: A group from entrepreneurial support system
Key Stakeholders People able to directly provide supportive
services A group of potential entrepreneurs
Remember to include individuals that represent all of the diverse populations in the community
2. Define Your Vision
What is your goal or entrepreneurial vision of the community? How do you envision the community to
look in five years? Make it realistic Make it community-based Make it holistic
3. Map Your Assets
Asset Mapping Does your community have the continuum
components?
Do a “community feasibility study” What systems or services need to be in place to
create an entrepreneurial community?
Build a business plan Think of your community as a business Can you make a community business plan containing
all of the necessary elements?
Resource Availability Local State National
4. Do a SWOT
Based on asset mapping, assess the following for your community: Strengths Weaknesses Opportunities Threats
Strategize to Close Gaps & Overcome Challenges
Use your Community Leadership Group Create a list of strategies to:
Capitalize on Strengths Overcome Weaknesses Identify Opportunities and Plan to Utilize Them Examine & Make a Plan to Minimize Threats
Bundle and Integrate Asset Development Strategies Not individual programs, but a system
approach Earn It, Keep It, Grow It
“Just Start”
Many rural communities have been successful in this endeavor
There are many resources available that can support your efforts
Be creative and build on your assets
YOU can make it happen!
