Stimulating Entrepreneurship in Resource Dependent Communities Eric Scorsone Ron Hustedde Larry Jones Cooperative Extension Service University of Kentucky.

Stimulating Entrepreneurship in Stimulating Entrepreneurship in Resource Dependent Resource Dependent

CommunitiesCommunities

Eric ScorsoneEric ScorsoneRon HusteddeRon Hustedde

Larry JonesLarry Jones

Cooperative Extension ServiceCooperative Extension ServiceUniversity of KentuckyUniversity of Kentucky

The SettingThe Setting

KY Tobacco cash receipts have declined from $1 KY Tobacco cash receipts have declined from $1 billion to $500-600 millionbillion to $500-600 million

Nearly 45,000 of Kentucky’s 85,000 farms Nearly 45,000 of Kentucky’s 85,000 farms produce tobaccoproduce tobacco In northeast KY, 75% of farms are tobacco dependentIn northeast KY, 75% of farms are tobacco dependent

Tobacco Settlement moneyTobacco Settlement money 50% designated to agricultural diversification50% designated to agricultural diversification $60 million for 20 years$60 million for 20 years

Tobacco buyout has been proposed and end of Tobacco buyout has been proposed and end of federal tobacco marketing system federal tobacco marketing system

Problem StatementProblem Statement

Tobacco dependent counties have not, up to now, Tobacco dependent counties have not, up to now, needed entrepreneurial farmers or communitiesneeded entrepreneurial farmers or communities

Traditional entrepreneurial support mechanismsTraditional entrepreneurial support mechanisms FinancingFinancing Technical Assistance (Small Bus. Dev Center)Technical Assistance (Small Bus. Dev Center)

Traditional support system is not geared towards Traditional support system is not geared towards tobacco farmers and rural communitiestobacco farmers and rural communities

New support mechanisms are neededNew support mechanisms are needed

Our hypotheses for working in tobacco dependent counties:

Economic development has to come from within the region

We have to improve the environment and culture in tobacco dependent counties for entrepreneurs to emerge;

Local entrepreneurial coaches and facilitators are important in

order to strengthen an entrepreneurial culture;

If you strengthen the knowledge, skills, imagination, attitudes and networking of entrepreneurial coaches, it will lead to more entrepreneurial events and more business starts

If you nurture and train local entrepreneurial coaches and turn them loose, they will become self-sustaining.

Program Mission StatementProgram Mission Statement

Kentucky Entrepreneurial Coaches Institute (KECI)Kentucky Entrepreneurial Coaches Institute (KECI)

This is an entrepreneurship leadership programThis is an entrepreneurship leadership program

““A program designed to stimulate economic A program designed to stimulate economic diversification and the entrepreneurial culture of 19 diversification and the entrepreneurial culture of 19 tobacco dependent counties in Northeast Kentucky”tobacco dependent counties in Northeast Kentucky”

Farm Diversification SurveyFarm Diversification Survey

Surveyed 2,500 farmers in 19 counties of Surveyed 2,500 farmers in 19 counties of Northeast Kentucky (40% rate)Northeast Kentucky (40% rate)

24% report some diversification in last three 24% report some diversification in last three yearsyears

Consistent with reports from USDA Agricultural Consistent with reports from USDA Agricultural CensusCensus

Intention to diversify next year indicates little Intention to diversify next year indicates little change in numberschange in numbers

Enterprises include: vegetables, goats, Enterprises include: vegetables, goats, agritourism, direct marketingagritourism, direct marketing

Who are Entrepreneurial Coaches?Who are Entrepreneurial Coaches?

Coaches: Coaches: Leaders in their communities who will support entrepreneurs Leaders in their communities who will support entrepreneurs

and build a culture that is entrepreneurship friendlyand build a culture that is entrepreneurship friendly

Coaches can be:Coaches can be: Chamber of Commerce DirectorsChamber of Commerce Directors Bankers, Lawyers, AccountantsBankers, Lawyers, Accountants High School teachersHigh School teachers Extension agentsExtension agents RetireesRetirees Others…….Others…….

Anyone interested in the process of counseling and Anyone interested in the process of counseling and assisting local entrepreneursassisting local entrepreneurs

Coaching is:

supportive, questioning, encouraging, about helping people to solve problems; clarifying individual and community visions/directions; holistic; embraces the whole person (community) helps people to set goals and deadlines, action-oriented, change, proactive relationship

Coaches do:Coaches do: Nurture and encourage entrepreneurs in a variety Nurture and encourage entrepreneurs in a variety

of activities including:of activities including: Idea generationIdea generation Business PlanningBusiness Planning FinancingFinancing Team BuildingTeam Building MarketingMarketing

Assist local communities in stimulating Assist local communities in stimulating entrepreneurial climate and cultureentrepreneurial climate and culture

School curriculum activitiesSchool curriculum activities Local entrepreneurial fairs or centersLocal entrepreneurial fairs or centers Marketing the benefits of entrepreneurship to the Marketing the benefits of entrepreneurship to the

communitycommunity

Coaches do:Coaches do:

Networking and brokeringNetworking and brokering Connect entrepreneurs to peopleConnect entrepreneurs to people

Resource FacilitatorResource Facilitator Connect to SBDC and other technical and financial Connect to SBDC and other technical and financial

assistanceassistance Industry Content and TrendsIndustry Content and Trends

Knowledgeable of industry trends and opportunitiesKnowledgeable of industry trends and opportunities Psychology and Self-AwarenessPsychology and Self-Awareness

Community Support and ClimateCommunity Support and Climate

Coaching is not:

teaching, telling people what to do, pushing personal agendas on others

Coaches Coaches do notdo not::

Conflict with existing business service providersConflict with existing business service providers At the appropriate time, coaches feed entrepreneurs into At the appropriate time, coaches feed entrepreneurs into

SBDC system or other provider systemsSBDC system or other provider systems Provide Business FinancingProvide Business Financing

Coaches direct entrepreneurs to appropriate bank or Coaches direct entrepreneurs to appropriate bank or financial institutions or other private investorsfinancial institutions or other private investors

Manage BusinessesManage Businesses Coaches help entrepreneurs find resource providers or Coaches help entrepreneurs find resource providers or

build management teamsbuild management teams

Leadership Program: ClassesLeadership Program: Classes

Two classes of entrepreneurial coaches trainedTwo classes of entrepreneurial coaches trained 30 coaches in each class30 coaches in each class 11stst class: Sept 2004-August 2005 class: Sept 2004-August 2005 22ndnd class: Sept 2005 – August 2006 class: Sept 2005 – August 2006

Coaches must apply to program Coaches must apply to program (June 2004, 2005)(June 2004, 2005) program selection committee is KY Agricultural program selection committee is KY Agricultural

Development Board, Entrepreneurship CommitteeDevelopment Board, Entrepreneurship Committee Classes meet monthly (2 days a month)Classes meet monthly (2 days a month) Class participates in international tripClass participates in international trip

Some Key Trends in Leadership programs:

1) Leadership programs are growing in popularity because of their need and impact in shaping community life;

2) Personal, business and executive coaching is a new and growing profession because it helps people to solve problems, meet challenges, reach goals and focus and achieve results more quickly.

Anticipated products: their entrepreneurial support network; imagination about entrepreneurship potentials; coaching skills (i.e., asking challenging questions; helping

others to set goals) their self-identity as "entrepreneurial coaches" -- not just a

teacher, banker or farmer. their understanding about nurturing entrepreneurs (ie. best

practices; sensitivity to youth, women) technical skills outreach capacity --- minimum outreach of 50 per year reflection on what it means to be an entrepreneurial coach --

lessons learned

and this will lead to:

more entrepreneurial support activity in counties and region;

more outreach-focused entrepreneurs; self-sustaining entrepreneurial support group new sense of regional identity and cooperation

(not just one county versus another).

Coaching Curriculum ICoaching Curriculum I Seminar 1: Creativity and Idea Generation (Jay Seminar 1: Creativity and Idea Generation (Jay

Kane)Kane) Seminar 2: Visiting an Entrepreneurial Community Seminar 2: Visiting an Entrepreneurial Community

(Athens, Ohio)(Athens, Ohio) Seminar 3: Entrepreneurial CoachingSeminar 3: Entrepreneurial Coaching

Seminar leaders from Scotland’s Hunter Center for Seminar leaders from Scotland’s Hunter Center for Entrep. University of StrathclydeEntrep. University of Strathclyde

Seminar 4: Meeting other entrepreneurship support Seminar 4: Meeting other entrepreneurship support providersproviders

Seminar 5: Where are the Markets: New Trends in Seminar 5: Where are the Markets: New Trends in the Regional, National and Global Marketsthe Regional, National and Global Markets

Coaching Curriculum IICoaching Curriculum II

Seminar 6: Building entrepreneurial capacitySeminar 6: Building entrepreneurial capacity Seminar 7: Envisioning a new entrepreneurial Seminar 7: Envisioning a new entrepreneurial

support system (Trip to rural Scotland)support system (Trip to rural Scotland) Working with Scottish Enterprise, Highlands and Working with Scottish Enterprise, Highlands and

Islands Enterprise, John Bryden (University of the Islands Enterprise, John Bryden (University of the Highlands) and many othersHighlands) and many others

Seminar 8: Bringing it all togetherSeminar 8: Bringing it all together

Long Term SustainabilityLong Term Sustainability

Coaches will be able to maintain membership and Coaches will be able to maintain membership and network through a Entrepreneurial Coaches Alumni network through a Entrepreneurial Coaches Alumni Network and annual meetingsNetwork and annual meetings

Coaches will participate in activities with other Coaches will participate in activities with other entrepreneurship support providersentrepreneurship support providers

Goal is to secure finding for statewide and continued Goal is to secure finding for statewide and continued training via KY Agricultural Development Boardtraining via KY Agricultural Development Board

Extension agents will also be able to participate in Extension agents will also be able to participate in training in futuretraining in future

What will it take to do this in my What will it take to do this in my community?community?

Strong Community Buy-inStrong Community Buy-in Community and business leaders should be committed to Community and business leaders should be committed to

supporting projectsupporting project In-kind And monetary supportIn-kind And monetary support Program marketing assistance (nominating candidates)Program marketing assistance (nominating candidates)

An issue that is driving the need for changing in the An issue that is driving the need for changing in the community or regioncommunity or region Traditional industry or agricultural declineTraditional industry or agricultural decline Community dissatisfaction with status quoCommunity dissatisfaction with status quo Internal social or demographic changes in communityInternal social or demographic changes in community

What you need?.....What you need?.....

A little or lot of moneyA little or lot of money Program is flexible and can be run on a variety of Program is flexible and can be run on a variety of

budgets budgets National or regional speakers (speaker fees) or conduct National or regional speakers (speaker fees) or conduct

in-house trainingin-house training Field trips?Field trips? Overnight or one day seminars (lodging and food Overnight or one day seminars (lodging and food

expenses)expenses) Transportation to and from seminar sitesTransportation to and from seminar sites

What you need?....What you need?....

Seminar Participants and Selection ProcessSeminar Participants and Selection Process Key part of conducting coaching programKey part of conducting coaching program Need a strong and widespread marketing campaign Need a strong and widespread marketing campaign

to generate interestto generate interest Selection committeeSelection committee

Should consist of neutral set of selectors to avoid Should consist of neutral set of selectors to avoid political or personal conflict of interestpolitical or personal conflict of interest

Good excuse for why someone wasn’t selectedGood excuse for why someone wasn’t selected Diverse candidate backgroundDiverse candidate background Committed candidatesCommitted candidates

What’s available?What’s available?

Coaching curriculum is being developed by Coaching curriculum is being developed by Kentucky team and available for others to useKentucky team and available for others to use

Center for Rural Entrepreneurship and others Center for Rural Entrepreneurship and others are aware of coaching concept and willing to are aware of coaching concept and willing to assistassist

In the future , a process and outcome In the future , a process and outcome evaluation will be availableevaluation will be available