Serving the Needs of Entrepreneurs

By William Amt, EDFS Manager, NADO Research Foundation

Entrepreneurship is a relatively recent addition to the growing family of economic development strategies. Traditionally, economic development programs have focused on the needs of businesses with such programs as industrial parks, loan funds and incubators. These have been very effective in helping thousands of businesses and creating hundreds of thousands of jobs.

Entrepreneurship development complements other economic development strategies by looking more at the needs of the entrepreneur and cultivating an entrepreneur-friendly culture that can foster the birth, growth and retention of more businesses. By adding entrepreneurial development to the business assistance model, organizations that manage loan funds and other programs can provide more holistic services to a wider range of businesses and entrepreneurs that are integral to their regions’ economic development.

One of the fundamental concepts of entrepreneurship development is the idea of a continuum of entrepreneurs that have a series of needs. Three general levels of entrepreneurs have been identified by the Center for Rural Entrepreneurship in Lincoln, Nebraska:

Potential Entrepreneurs: People frustrated in their current job, dislocated workers, dreamers and youth.

Business Owners: They manage their company and are classified as lifestyle entrepreneurs - generally successful, not seeking to change their business model or grow their business; or survival entrepreneurs - struggling to make enough to support their family, doing multiple jobs to make ends meet, stressed.

Entrepreneurs: Catalysts - successful, tied to a few local and regional markets, open to new ideas, starting to think about how to make their company more competitive; breakouts - successful, finding new markets beyond region, open to new ideas, proactive, evolving their business model; serial entrepreneurs - have history of starting more than one business, often sell business once it’s up and running, open to new ideas and opportunities; and entrepreneurial growth companies - experiencing rapid growth in employees and sales, reaching new markets, developing new products and services, innovative and dynamic leader.

The various types of entrepreneurs in a region have different support needs that create opportunities for organizations that support businesses. In terms of capital, potential entrepreneurs need microloans, business owners and smaller entrepreneurs need larger amounts of debt capital, and larger entrepreneurs need venture capital and angel investments. Technical assistance needs also vary according to the experience level of the entrepreneur.

One technical assistance need that is common is networks, and there are at least two. Entrepreneur networks bring peers together to share their experiences, expertise and questions, and link entrepreneurs with a range of resources. Service provider networks, offer a single entry point into a region’s range of coordinated services, and require an ethos that all of the participating providers are working towards creating a vibrant entrepreneurial economy.

Organizations that intentionally deliver services to entrepreneurs are termed by the Center for Rural Entrepreneurship as entrepreneurial support organizations (ESOs). ESOs range from one-stop shops that offer a comprehensive menu of programs for the continuum of entrepreneurs to members of a consortium of organizations that run complementary programs that serve a wide range of entrepreneurs’ needs.

An example of a consortium of providers is East Alabama Regional Planning and Development Commission, located in Anniston. The Anniston Entrepreneur Support Network includes the following members:

The East Alabama Commission, provides loan capital through its revolving loan fund program;

The Calhoun County Chamber of Commerce is a referral point for people interested in starting a small business and sponsors a small business recognition award series for outstanding local businesses;

Jacksonville State University’s Small Business Development Center assists people starting a small business, as well as creating customized training for the tenants;

Northeast Alabama Entrepreneurial System manages a 40,000 square foot incubator building that has,over the past four years, graduated nine firms and created 200 jobs; and

The Anniston City and Calhoun County Schools have established a Youth Entrepreneurship Training Program.

For more information, contact:

Don Macke, Co-Director of the Center for Rural Entrepreneurship, at don@ruraleship.org;

Bill Curtis, Executive Director of the East Alabama Regional Planning and Development Commission, at 256/237-6741 or bcurtis@adss.state.al.us.

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