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Creating an Entrepreneurial Friendly Community Community Vitality Center April 25, 2007

Creating an Entrepreneurial Friendly Community Community Vitality Center April 25, 2007. A Catalyst for Creating Real Impact in Real Communities. Community Vitality Center.

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Creating an Entrepreneurial Friendly Community Community Vitality Center April 25, 2007

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  1. Creating an Entrepreneurial Friendly CommunityCommunity Vitality CenterApril 25, 2007 A Catalyst for Creating Real Impact in Real Communities

  2. Community Vitality Center • Mission: A catalyst for innovative projects and initiatives designed to improve the vitality of non metro communities and rural areas. • Community Entrepreneurship • Community Philanthropy • Rural-Urban Policy Studies on Vitality Issues

  3. Community Vitality Center Board and Structure • 25 Board members representing • 1/3 Higher education & agency reps • 2/3 Diverse interests of across Iowa • ISU Extension Admin Host & Fiscal Agent • Board-ISUE Concurrence on Policy & Projects

  4. Entrepreneurship in the U.S. • 10.5% of U.S. adult population is engaged in entrepreneurial activities -- Global Entrepreneurship Monitor (GEM) • 36 % of U.S. Entrepreneurs are age 45-64 • 1 female Entrepreneur for every 1.5 male entrepreneurs, with parity in 45-65 age bracket Source: Mapping Rural Entrepreneurship (WKKF/CFED)

  5. Entrepreneurial Participation • Highest Entrepreneurial participation in U.S. are those with high school diploma • Entrepreneurs without a high school diploma tend to focus more on self-employment • Those with college degrees tend to have alternative employment opportunities Source: Mapping Rural Entrepreneurship (WKKF/CFED)

  6. CVC - 10 Community Forums • 88% favored local community initiatives to support entrepreneur development, business startups, & seed capital networks • 67% favored initiatives linking local entrepreneurs to regional resources, expertise, & networks • 11% favored self-help entrepreneurship solely as a private sector initiative without public sector involvement

  7. CVC Communities of Distinction • 4 fast growing (nonmetro) communities, 1 in each quadrant of Iowa • 4 comparable communities that lost population in 1990s • Interviewed 75 leaders in local gov’t, econ. develop., healthcare, & education Goals: • Show Not All Rural Communities in Decline • Determine Key Factors of Difference

  8. Grassroots Entrepreneurship was important in past & has future potential. • All Communities identified at least one homegrown business started in an earlier decade that is now a major employer. • None identified major local entrepreneurship programs in place beyond revolving loan funds. • All were very interested in what could be done locally on a cost-effective basis, underscoring Iowa’s potential.

  9. Local Ownership Can Make a Difference • Diversification Advantages in Downturns • Businesses Less Likely to Move • Adds independence to Local Leadership • Can be more Philanthropic • CVC Analysis of 100mgy Ethanol Plant concludes nearly 70% more local economic impact

  10. How much does the strategy cost per job? Tupelo, MS attracted Toyota Plant • Jobs 2000 averaging $20/hour • $40,000 annual income/worker • $296 million incentive package • Cost per direct job created $148,000 • $1.3 billion plant investment • Approximate new investment per job $650,000 Community Vitality Center

  11. How much does the strategy cost per job? • Lincoln County MN Sirolli Facilitation Project – Too Expensive For Iowa? • $80,000/year plus annualized startup costs $20,000/year for 10 yrs • Averaged 10 startups per year creating 25 jobs • Averaged 10 expansions per year creating 29 jobs • Cost per firm $5,000 • Cost per direct job created $1,852 • $75,000 new investment per startup, $100,000 per expansion • Approximate new investment per job $32,407 • $1.62 million in new payroll annually • $1.75 million in new investment annually • $1.4 million in new bank loans annually Community Vitality Center

  12. “Seven Statements To Stagnation”:Erwin M. Soukup • We’ve never done it that way before. • We’re not ready for that. • We are doing all right without trying that. • We tried it once before. • We don’t have money for that. • That’s not our job. • Something like that can’t work.

  13. Banker Criteria in Evaluating Business Opportunities • Strategic Fit in Market • Business Plan • Track Records of Team Assembled • Experience of Key Leadership • Resources Available to Firm • Community Vitality Center

  14. Creating a Culture for Community Entrepreneurship 1. Establish A Collaborative Local Alliance to Support Entrepreneurship Development • Sirolli Model (Lincoln County, MN) • Fairfield (Volunteers to Chamber) • Carroll (Dev Corp & Extension) • Mason City (NIACC & Local Leaders)

  15. 2. Provide Recognition to Celebrate Entrepreneurial Success • Identify and Share Entrepreneurial Success Stories (Past and Current) • Provide Awards for Entrepreneurs (Entrepreneur of the Year) (Business Plan Competition) • Media Announcements

  16. 3. Annually Support Entrepreneurial Educational & Training Activities • Conduct training workshops annually • Business Plan Basics • Entrepreneurship Fundamentals • Marketing, Customer Analysis, Internet • Financial Management • Track Record and Experience of Team & Leader • Involve local entrepreneurs & education resources • Beyond Basics, Entrepreneurs need experienced Coaches and Mentors • Local Networks, SCORE, SBDC Navigators

  17. 4. Inventory Entrepreneurial Assets and Resources (Local & Regional) • How, When, and Where to tap Local Expertise • Create resource guide for entrepreneurs • Community Entrepreneurship Centers • Create Marketing Directory for Entrepreneurs

  18. 5. Establish & Support Entrepreneur Coaching and Mentoring Networks • Identify local entrepreneurial needs and topics of interest to local entrepreneurs • Meet a minimum of 6 times per year • Provide seminars by respected entrepreneurs and experts. • Provide time to share ideas, problems, and networking for contacts and advice

  19. 6. Create Entrepreneurial Capital Networks • Endowments, Donors & Public Funds for Program • $204 m annual Linn County Wealth Transfer in probate • $262,554 average estate probated • $779 estates probated/year • Debt for Entrepreneurs • A Good Lender (Equity lender vs repayment capacity) • Micro Loans & Revolving Loan Funds • SBA & USDA Agency Programs & Guarantees • Credit cards and Other • Equity for Entrepreneurs • F,F &F • Seed Capital, Grant Programs, SBIR • Angel Capital • Venture Networks • Private and Public Offerings

  20. Ultimate Goal: To Develop an Entrepreneurial Support System for: • Taking People with Passion & Good Ideas • Honing Management & Due Diligence Talent • Effective Use of Available Capital Resources • Reaching Markets & Knowing Customer Wants • Coaches & Mentor Networks to solve problems • Sorting plans with promise from others Creating an Effective Entrepreneur Support System Can Cut the Business Failure Rate in Half

  21. Community Vitality Center • Dr. Mark A. Edelman, Director • Phone: 515-294-3000 • E-mail: cvc@iastate.edu • Website: www.cvcia.org

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