Embrace the Teeter Totter Factor

… What is so BIG about

Small Business?

Presented by:Jim CarrollExecutive Director, BIG CenterKentucky Highlands Investment CorporationLondon, Kentucky

KHIC‟s Mission

To provide and retain employment opportunities in Southeastern Kentucky through sound investments, training and management assistance.

Regional, private, non-profit business development corporation founded in 1968 serving 22 counties in Eastern and Southern KY.

Created or retained over 10,000 jobs Assisted 483 businesses Invested over $180 million Created or retained over $120 million in annual wages

How Do We Accomplish Our Mission?

Micro- Enterprise Loan Program – up to $35,000

Small Business Loan Program – up to $250,000

USDA B&I Loan Program – up to $10,000,000

Revolving Lines of Credit

Equity Investments

Support Entrepreneurs with Training & Coaching

Business Incubation

Definitions…

Small Business – a for profit business with 500 or fewer employees that is independently owned and operated.

US SBA

Micro Enterprise – a business having 5 or fewer employees and seed capital of no more than $35,000.

Wikipedia

Entrepreneur – an individual who starts a for profit business with the idea to supply a product or service which is better, faster or cheaper than what is currently available.

Jim Carroll

New Companies (Grow „em)

Recruitment (Get „em)

Retention(Keep „em)

Economic Development

“For the United States to survive and continue its economic and political leadership in the world, we must see entrepreneurship as our central comparative advantage.”

What you should know…

1/3 of GDP comes from companies that didn‟t exist before 1980

Between 1980 and 2005, young companies (<5yrs) accounted for ALL net new job growth

Firms have been started in bad economic times FedEx, Microsoft, Apple, Southwest

50% of Fortune 500 and Inc. 500

Since 1980 the US has made a “profound shift from a „managerial‟ to an „entrepreneurial‟ economy.”

Peter Drucker

What you should know…

New companies create new industries

Small businesses are more productive

Small businesses pay better wages (+15%)

Employees of small companies have higher job satisfaction

Small businesses are a major source of innovation

What should concern you…

Little “economic stimulus” is directed towards Small Business - $15 billion of $1.5 trillion

Policy tends to hurt Small Business Sarbanes Oxley

Health Care

Taxes

Higher Education 27% of graduating college seniors plan to work

for nonprofits

More seniors will graduate with sports degrees than electrical engineering degrees

< 20 business will be started for each $1 billion in university research

What should give you hope…

SBA Policy… Elimination or reduction of SBA loan fees

Raising SBA guarantee

Raising loan maximums

Expansion of SBIC program

State is streamlining application processes

Bank regulations focusing on Small Business

“Economic recovery will be driven, in a large part, by America‟s small businesses.”

– White House Statement

Things I Think I Think…

SEC and states need to allow third party securities (peer-to-peer loans such as Kiva, Prosper) to operate without standard regulation

Allow shareholders of Small Business to choose SOX compliance

Health care reform – level out small business costs, eliminate “entrepreneurship lock”

Immigration – green cards for job creators

University Technology License Office competition

Educators… Stop vilifying capitalism and free enterprise

States need overarching visions for Small Business Economic Development

Each community must adopt a plan for creating a Small Business Ecosystem

Creating a System of Support for Entrepreneurs and Small Business in Kentucky: Insights and Policy Recommendations, Marley and Dabson

The Teeter Totter Effect

It only takes a small shift one way or the other to make a negative or positive impact on a community. “Just one person can really make a difference – either for good or for bad.”

The Teeter Totter Effect

Identify the Champion

Use the Champion to make introductions to community leaders – don’t expect this person to deliver YOUR message

Understand the political dynamics

Know the hot-buttons for the community

Show support for other projects already in place

Communicate, communicate, communicate…

Training

Mentoring

Facilities

Networking

Commerce Connections

Capital

Connections

Entrepreneur

Entrepreneur

EcosystemE

Entrepreneur

Ecosystem

Training

Provide practical business skills training Recruit Trainers Provide training to Trainers Offer classes on a regular basis

Partner with local Higher Ed Institution(s) Offer lecture series on Entrepreneurship Encourage participation in Excellence in Entrepreneurship Awards Publicize Boot Camp to students Provide facilities to conduct Boot Camp

Encourage High Schools to introduce entrepreneurism Offer lecture on Entrepreneurship Offer Junior Achievement program Encourage participation in Entrepreneur Leadership Institute

E

Entrepreneur

Ecosystem

Engage SBDC, SCORE, Chamber of Commerce, ED Deliver information to Entrepreneurs on existing programs Provide Mentors and Coaches

Recruit Mentors and Coaches from existing business leaders Provide training to Coaches

Establish Coaching Connections Assign Mentors to Entrepreneurs Mentors to schedule regular meetings with Entrepreneurs

E

Mentoring

Entrepreneur

Ecosystem

Identify space for collaboration with other entrepreneurs

Establish Business Accelerator (nice to have) Shared office & conference facilities, shared technology, shared manufacturing Below-market rates Favorable lease terms (short-term, no personal guarantee) Furnished

E

Facilities

Entrepreneur

Ecosystem

Utilize technology to communicate with Entrepreneurs email, Facebook, Twitter

Sponsor regular networking events for entrepreneurs

Establish CEO Roundtable group

Sponsor Lunch & Learn Series

Recruit small businesses to join Chamber of Commerce favorable rates benefits

E

Networking

Entrepreneur

Ecosystem

Establish a formal business networking group

Establish “Do Business Local” campaign

Establish/maintain connections with State and Fed policy makers

Make connections with University tech transfer organizations

Sponsor an annual Export Expo

Encourage E-commerce Identify local developers Encourage instruction at local education institutions

E

Commerce Connections

Entrepreneur

Ecosystem

Involve local banks

Cultivate relationships with local investors, CDC’s, etc.

Identify local and state private investors

Sponsor an annual Small Business Showcase

Educate entrepreneurs on due diligence expectations

E

Capital Connections

Training

Mentoring

Facilities

Networking

Commerce Connections

Capital

Connections

Entrepreneur

Entrepreneur

EcosystemE

What is so BIG about

Small Business?

Jim CarrollExecutive Director, BIG Center606.260.0830jcarroll@khic.org