Facilitating Entrepreneurial Success

By William Amt, NADO Research Foundation Program Manager, EDFS

Ernesto Sirolli is on a mission to change the way micro and small businesses receive technical assistance. As founder and executive director of the Sirolli Institute, which is based in Sacramento, CA, Sirolli has developed Enterprise Facilitation, an affordable community-based team approach that builds on the entrepreneur’s management strengths using local resources.

“For a business to succeed, three elements need to be managed passionately – product development, marketing, and financial management – which I call the trinity of management,” Sirolli said. “Since entrepreneurs love doing only one or two of these, Enterprise Facilitation links them with people in the community who are passionate about the elements the entrepreneur is not.” He added that 80 percent of businesses with less than $1 million in revenues fail because they do not adequately address the trinity.

Enterprise Facilitation not only draws on local resources to supplement the skills of the entrepreneur, it is also locally managed. When the Institute is invited into a community or region, it first requires the creation of a board of management comprised of 25-35 community leaders to oversee the implementation of the program and serve as its advisory team.

Its members, who bring networking and technical skills and a commitment to economic development, include business leaders, accountants, lawyers, bankers, government officials and economic developers. The board hires an enterprise facilitator who becomes the program’s catalyst. Each board member introduces the facilitator to 10 of their friends to increase community commitment to the program. Based on Sirolli’s experience, from these initial introductions, 40-50 entrepreneurs approach the facilitator for assistance.

The facilitators work one-on-one with new and existing businesses without cost to determine which parts of the trinity of management are done well by business staff. The facilitator presents information about the business and its management and resource needs to the board of management, whose members say either they have the relevant expertise or they know someone who does. This management coaching and networking assistance builds businesses while strengthening communities.

Since 1985, the Sirolli model has assisted over 30,000 businesses in dozens of mainly rural communities in the United States, Australia, New Zealand, and Canada. The average cost-per-job-created through the enterprise facilitation approach is $2,500. The program has stimulated multi-community and multi-organizational partnerships to administer the program and share in operating costs. Communities contract with the Institute for 30-months, the costs of which include training of board members and program implementation oversight.

Enterprise Facilitation a Success in Oregon

Northeast Oregon is one of the regions where Enterprise Facilitation has been effective at invigorating the economy. The region’s economy is agriculture and timber-based, and unemployment is as high as 19 percent, primarily due to the declining timber industry. In 2000, Baker and Wallowa counties partnered to work with the Sirolli Institute, and each county established its own board of managers and hired a facilitator.

“For a business to succeed, three elements need to be managed passionately – product development, marketing, and financial management – which I call the trinity of management.” - Ernesto Sirolli, Sirolli Institute

The Northeast Oregon Economic Development District (NEOEDD) is represented on the boards and has been instrumental in obtaining funding, including a grant from the Economic Development Administration for training costs, and $120,000 from the US Department of Agriculture’s Rural Business Opportunity Grant and Rural Business Enterprise Grant programs to support both project sites.

Lisa Lang, NEOEDD’s Executive Director, said that the programs have exceeded expectations. “Over the past two years, our facilitators have met with 400 businesses and entrepreneurs in the two counties. As a result, more than 30 businesses have opened and 20 have expanded, creating 80 new jobs in a variety of industries. More importantly, the program has built a cadre of future leaders who have a passion for their community and their job.”

For More Information Contact: Yvonne Fizer of the Sirolli institute at 877/747-6554; Lisa Lang of the NEOEDD at 541/426-3598 or email neoedd@uwtc.net.

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