SBDC Approach To Economic Gardening. In 30 minutes….. Market research Newton approach MyEntreNet Business Succession.

SBDC Approach To SBDC Approach To Economic GardeningEconomic Gardening

In 30 minutes…..In 30 minutes…..

Market researchMarket research

Newton approachNewton approach

MyEntreNetMyEntreNet

Business SuccessionBusiness Succession

Iowa SBDC SystemIowa SBDC System

Training and business counseling Training and business counseling - aspiring & existing business - aspiring & existing business ownersowners

13 locations – soon to be 14 13 locations – soon to be 14 10,000+ people per year - 10,000+ people per year -

counseling/trainingcounseling/training Average client grows 25% fasterAverage client grows 25% faster

SBDC ApproachSBDC Approach

Our purpose – help growth Our purpose – help growth oriented companies grow oriented companies grow faster/less mistakesfaster/less mistakes

Temperament – “high impact”Temperament – “high impact” Commodity trap – “competitive Commodity trap – “competitive

advantage”advantage” Bottom line – better information = Bottom line – better information =

better decisions = faster growthbetter decisions = faster growth

Where We’ve BeenWhere We’ve Been

Our research into researchOur research into research

Pilot – Central IA & Waterloo areaPilot – Central IA & Waterloo area

Expanded to all Iowa SBDCsExpanded to all Iowa SBDCs

Individual centersIndividual centers

KeyKey – garbage in/garbage out – garbage in/garbage out

ExamplesExamples

Northern Iowa manufacturer – Northern Iowa manufacturer – NEW!NEW! Location – W. Iowa health food store Location – W. Iowa health food store

– Identified target marketIdentified target market– Used software – how many in x mi radiusUsed software – how many in x mi radius

Business Trainer Business Trainer – Profile existing clients – 80/20Profile existing clients – 80/20– Narrow group – most of profitNarrow group – most of profit– Helped design campaign – get moreHelped design campaign – get more

Current StateCurrent State

National SBDC market research arm National SBDC market research arm with GISwith GIS

Weighing alternatives – many optionsWeighing alternatives – many options

Central sourceCentral source

Include Universities and studentsInclude Universities and students Goal - “Re-open” for business by Goal - “Re-open” for business by

January 1January 1

Newton ProgramNewton Program

1:1 counseling1:1 counseling

Smart Start workshopsSmart Start workshops

Market researchMarket research

Development of mentor networkDevelopment of mentor network

Topical workshops Topical workshops

MyEntreNetMyEntreNet

1.1. Community EmpowermentCommunity Empowerment- - Preparing the communityPreparing the community

2.2. Business AssistanceBusiness Assistance- Training, counseling, mentoring- Training, counseling, mentoring

3.3. CapitalizationCapitalization- - Review financial options - small Review financial options - small businessbusiness

4.4. NetworkingNetworking- - Recognizing and connecting Recognizing and connecting entrepreneurs regionallyentrepreneurs regionally

Online and OnsiteOnline and Onsite

Clayton County, Iowa FastTrac® Class, Fall 2005

MyEntreNet Online Web Conference

Economic Impact To Date

For Every 100 Entrepreneurs…. 20 Start or Expand a

Rural BusinessCreating…. 75 New Full Time JobsLeveraging…. $3.5 Million in New

Commercial Investment

GetGet Connected!Connected!

• Register at Register at www.myentre.netwww.myentre.net • Application available onlineApplication available online• Letter of intent to apply – Nov. 3, Letter of intent to apply – Nov. 3,

2006 2006 • Application deadline – Dec. 1, Application deadline – Dec. 1,

20062006• Announcement – Jan. 16, 2007Announcement – Jan. 16, 2007

Iowa ChallengeIowa Challenge

““Transitioning our own” large part of Transitioning our own” large part of economy in Iowa next 15 yearseconomy in Iowa next 15 years

Aging business ownersAging business owners• 28% of Iowa business owners 55 or older28% of Iowa business owners 55 or older

Lack of succession planningLack of succession planning• 39% of family businesses will change 39% of family businesses will change

leadership - next five yearsleadership - next five years• 66% of businesses - no succession plan66% of businesses - no succession plan• 55% of owners die without valid will 55% of owners die without valid will

Business SuccessionBusiness Succession

Impacts when done well:Impacts when done well:Storefronts occupiedStorefronts occupiedHigher tax revenuesHigher tax revenuesGreater philanthropyGreater philanthropyMore business diversityMore business diversitySpiral effectSpiral effect

Succession Succession ISIS economic & community economic & community development!development!

DefinitionDefinition

Business continues in some formBusiness continues in some form

Transfer of small business to new Transfer of small business to new owner:owner:• Transfer to family member(s)Transfer to family member(s)• Inside sale – key employee(s)/ESOPInside sale – key employee(s)/ESOP• Sale to outsiderSale to outsider

All Successful All Successful TransfersTransfers

Answers 3 Key questionsAnswers 3 Key questions

1. How much do I need when I leave 1. How much do I need when I leave business and where will it come business and where will it come from?from?

2. When will I leave?2. When will I leave?

3. Who is going to take over (and how 3. Who is going to take over (and how

will I prepare them)?will I prepare them)?

Statewide programStatewide program

Advisory committeeAdvisory committeeStatewide – broad backgroundStatewide – broad background

Succession resourcesSuccession resourcesFamily business consultants, ESOP experts,Family business consultants, ESOP experts,attorneys, CPAs, business brokers, SBDC &attorneys, CPAs, business brokers, SBDC &othersothers

Developing - comprehensive web siteDeveloping - comprehensive web siteLinks, articles, service providersLinks, articles, service providers

Iowa SBDC Iowa SBDC

Lars Peterson Lars Peterson

515.669.2592515.669.2592

866-639-9636 866-639-9636

[email protected]@iastate.edu

www.iowasbdc.orgwww.iowasbdc.org