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Rural Entrepreneurship: Best Practices

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Title: Rural Entrepreneurship: Best Practices


1
Rural Entrepreneurship Best Practices
Practical Advice
  • Chuck Palmer
  • Iowans for Social Economic Development
  • Des Moines, IA

2
Iowans For Social Economic Development
Mission, Vision History
  • Mission To create opportunities for low and
    moderate income Iowans to increase income and
    achieve financial stability.
  • Vision To see vibrant Iowa communities where all
    families and individuals have the opportunity to
    find financial stability and success.

3
ISEDs Work in Microenterprise Development
  • ISED Provides Comprehensive Small Business
    Education Courses Technical Assistance
  • Business Plan Creation
  • Financial Plan Analysis
  • Market Research
  • Viability Assessment
  • Start-up Support
  • Access to microenterprise resources
  • Access to other asset building supportive
    services
  • Through our classes and supportive services
  • 2,172 individuals have been assisted to start,
    expand, or strengthen their businesses
  • 5,995 clients have completed our microenterprise
    training
  • Over 10,000 of our clients have been involved in
    microenterprise program classes
  • Over 11.3 million in business capital has been
    accessed

4
A Road Map to Rural Entrepreneurism
  • Microenterprise how can it benefit your
    community
  • Characteristics of a Successful Entrepreneurial
    Community
  • Components of a Successful Microenterprise
    Development Program
  • The Microenterprise Growth Continuum
  • Feasibility Studies Business Plan Building
  • Challenges Gaps
  • Overcoming Challenges Gaps
  • Success in Practice 9 Successful Community
    Intervention Strategies
  • Now What Building Your Own Successful Community
    Strategy

5
What is Microenterprise?
  • A small business that
  • Has 5 or fewer employees
  • Requires seed capital less than 35,000
  • Often utilized as an economic development
    strategy and has gained momentum as a poverty
    alleviation strategy as well

6
What could microenterprise development do for my
community?
  • A 2004 Aspen Institute study of 17
    micro-enterprise development organizations found
    that their 560 microenterprises
  • Generated 43.8 million in revenues
  • Provided 6.8 million in income for owners and
    also
  • Employed 648 full-time workers

7
Characteristics of a Successful Entrepreneurial
Community
  • Demonstrates leadership and promotes successful
    role models.
  • Provides training and technical assistance at
    both the youth and adult education levels focus
    on financial literacy and asset development.
  • Develops community networks of support,
    mentoring, and financial assistance focus on
    improving access to a broader marketplace.
  • Fosters a culture that recognizes and values
    entrepreneurship.
  • Provides access to start-up capital.
  • Supports engages all dimensions of diversity

8
Components of a Successful Microenterprise
Development Program
  • Training and Technical Assistance
  • Credit and Access to Credit
  • Access to Markets
  • Economic Literacy and Asset Development

9
Microenterprise Growth Continuum Women Economic
Ventures (WEV) Program, CA
10
Feasibility the Fundamental Five How ready is
your community?
  • 1. Market Feasibility
  • Who is the potential customer?
  • What is the customers profile (age, income,
    buying habits)?
  • What is the customers industry status?
  • What market volume will you need?
  • What will the market reaction be to your service
    or product?
  • How will you package and distribute your
    product(s) or service(s)?
  • 2. Organizational Feasibility
  • What skills will the owner need?
  • How much time will the business demand?
  • What types of personnel will you need (quantity
    skills needed)?
  • Are the personnel types that you are seeking
    readily available in your community?
  • How will the business responsibilities be
    distributed across personnel?

11
Feasibility the Fundamental Five How ready is
your community?
  • 3. Technical Feasibility
  • Are there business locations that are available,
    cost effective and have the right zoning/codes?
  • How will production of the product work?
  • Who will be the suppliers?
  • What is your business volume capability?
  • Do you have the availability of leasing
    commercial space?
  • What are the regulations that are associated with
    your product?
  • What insurance will you need what are the costs
    of that insurance?
  • 4. Competitive Feasibility
  • What or who is your existing competition?
  • What is your competitive position?
  • What are the potential reactions of your
    competitors?
  • How great is the potential for new competition?
  • How can you differentiate yourself from your
    competition?

12
Feasibility continued
  • 5. Financial Feasibility
  • How much capital is needed (fixed costs, start-up
    costs working capital for 1-3 months)?
  • How much capital does the owner have available?
  • How much capital is available from private
    investors?
  • How much capital remains that needs to be
    borrowed?
  • What is the income and profit potential of the
    business?
  • Basic Cash Flow
  • Owners living Costs
  • Loan Repayment
  • Operating Costs
  • Break-Even Analysis

13
Components of a Successful Business Plan
  • Can your community support entrepreneurs in
    understanding and developing these business
    components?
  • Introduction
  • Give a detailed description of the business and
    its goals
  • Discuss ownership of the business and its legal
    structure
  • List the skills and experience you bring to the
    business
  • Discuss the advantages you and your business have
    over your competitors
  • Marketing
  • Discuss the products and services that your
    company will offer
  • Identify customer demand for your products and
    services
  • Identify your market, its size and locations
  • Explain how your products and services will be
    advertised and marketed
  • Explain your pricing strategy

14
Components of a Successful Business
Plancontinued
  • Financial Management
  • Explain your source and the amount of initial
    capital
  • Develop a monthly operating budget for the first
    year
  • Develop an expected return on investment and
    monthly cash flow for the first year
  • Provide projected income statements, balance
    sheets for a two your period
  • Discuss your break-even point
  • Explain your personal balance sheet and method of
    compensation
  • Discuss who will maintain your accounting records
    and how they will be kept
  • Provide what if statements addressing
    alternative approaches to problems that may
    develop
  • Operations
  • Explain how the business will be managed
    day-to-day
  • Discuss hiring, personnel procedures
  • Discuss insurance, lease, or rent agreements, and
    issues pertinent to your business
  • Account for the equipment necessary to produce
    goods or services
  • Account for production and delivery of products
    and services

15
Challenges Faced by Many Rural Communities
  • Geographically Isolated
  • Changing Demographics
  • Agingpeople and places
  • High Unemployment
  • Low Wage Jobs
  • Changing Economic Base
  • Seasonal Employment

16
Key Entrepreneurial System Gaps to Overcome
  • Capital Gap
  • Information and Knowledge Gaps
  • Institutional Gaps for Training and Technical
    Assistance
  • Delivery and Coordination Gaps
  • Cultural Gaps

17
Strategies to Overcome Challenges Gaps
  • Engage youth and retirees
  • Foster competitive creativity
  • Utilize technology to expand capacity and broaden
    the market
  • Continue to build capacity in the community
    through workshops, events and networking
  • Seek out creative financing options (cooperative
    funding models or charitable asset pools)
  • Foster strategies that will engage minority
    populations in the community and ensure an equal
    share of potential prosperity to all community
    members

18
The Nebraska Center for Leadership Development A
holistic approach
  • Hometown Competitiveness is a project of the
    Heartland Center for Leadership Development, the
    Nebraska Community Foundation, and the Center for
    Rural Entrepreneurship. Their comprehensive
    approach encourages communities to take action in
    four strategic areas.
  • Leadership development to strengthen the
    capacity of residents to improve and sustain
    their community.
  • Youth development to support and enhance the
    idea of adults and youth working together to
    create opportunities for youth to stay in or
    return to the community.
  • Developing charitable assets to strengthen and
    sustain charitable giving at the local level in
    order to build an endowment that will sustain
    local civic institutions and create a new source
    of opportunity capital for community economic
    development efforts.
  • Entrepreneurial development to identify and
    assess entrepreneurial talent in the community
    and to devise an economic development strategy to
    increase entrepreneurial business development

19
MyEntreNet Capacity building through online
strategies
  • In 2001, the University of Northern Iowa made a
    pilot investment in rural economic vitality with
    the development of an entrepreneurial development
    system.
  • Goal develop a sustainable model that connects
    geographically isolated entrepreneurs to services
    and people to become competitive in a global
    economy
  • Provides a technological bridge community
    capacity building for entrepreneurs both in
    person and online.
  • Based upon four key principles Community
    Empowerment, Business Assistance, Capitalization
    and Networking.

20
AUSA Fostering Hispanic entrepreneurship in
rural communities
  • ACCION USA (AUSA) Hispanic Microloan Project
  • With the support of the Northwest Area
    Foundation, AUSA is helping diversify and
    strengthen the economies of rural communities by
    providing credit and other financial services to
    rapidly-growing rural Latino communities. AUSAs
    service strategy has three components
  • 1. Loans AUSA will disburse microloans directly
    to self-employed residents of these communities,
    using its Internet and telephone loan application
    systems. Small business loans of 500 to 25,000
    will be provided in addition to 500 Credit
    Builder loans for low-to-moderate income
    individuals who do not have a credit history.
  • 2. Outreach and Marketing AUSA will conduct
    grassroots outreach and marketing activities to
    inform community residents of its services.
  • 3. Capacity Building AUSA will conduct a series
    of training activities with local groups and
    organizations to enable them to help individuals
    access their services and to continue with
    outreach activities to ensure continuity beyond
    the timeline of the project.

21
Shop the Frontier Non-profit rural marketplace
on the Internet
  • Shop the Frontier is a project of Stone Soup, a
    nonprofit organization based in Washington and
    serving the Pacific Northwest.
  • Mission to create sustainable rural economies by
    teaching the skills necessary to thrive in the
    21st century.
  • Shop the Frontier is a project of Stone Soup, a
    nonprofit organization based in Washington and
    serving the Pacific Northwest.
  • Their mission is to create sustainable rural
    economies by teaching the skills necessary to
    thrive in the 21st century.
  • http//www.shopthefrontier.com/VFstore/

22
5 More Examples of Successful Rural Community
Intervention Strategies
  • Access e-Commerce Workshops
  • Conducts workshops in seven communities to
    enhance business skills and knowledge on the use
    of internet marketing and e-commerce to augment
    business profitability.
  • Crawford County Entrepreneur Development Network
  • Identifies local entrepreneurs, identify local
    entrepreneurial needs and organizes local
    training and networking meetings to assist
    entrepreneurs.
  • Mount Pleasant Area Business Plan Competition
  • Created an annual, locally sponsored business
    plan competition. Winners have included an
    injection molding company, a bed and breakfast
    venture involving a historical venue, and an
    upscale kennel and pet care business.
  • Carroll County Entrepreneur Coaching and
    Mentoring Network
  • Organizes local coaching and mentoring network to
    provide for training, sharing ideas for solving
    problems related to entrepreneurship.
  • Micro Enterprise Entrepreneur Workshops
  • Conducts a series of training workshop for
    micro-enterprise entrepreneurs in Red Oak,
    Villisca, and Mount Ayr, and one additional
    community at 2,500 per community.

23
Now What? 1. Build Community Leadership
  • Build Leadership
  • Create a planning group made up of
  • A group from entrepreneurial support system
  • Key Stakeholders
  • People able to directly provide supportive
    services
  • A group of potential entrepreneurs
  • Remember to include individuals that represent
    all of the diverse populations in the community

24
2. Define Your Vision
  • What is your goal or entrepreneurial vision of
    the community?
  • How do you envision the community to look in five
    years?
  • Make it realistic
  • Make it community-based
  • Make it holistic

25
3. Map Your Assets
  • Asset Mapping
  • Does your community have the continuum
    components?
  • Do a community feasibility study
  • What systems or services need to be in place to
    create an entrepreneurial community?
  • Build a business plan
  • Think of your community as a business
  • Can you make a community business plan containing
    all of the necessary elements?
  • Resource Availability
  • Local
  • State
  • National

26
4. Do a SWOT
  • Based on asset mapping, assess the following for
    your community
  • Strengths
  • Weaknesses
  • Opportunities
  • Threats

27
Strategize to Close Gaps Overcome Challenges
  • Use your Community Leadership Group
  • Create a list of strategies to
  • Capitalize on Strengths
  • Overcome Weaknesses
  • Identify Opportunities and Plan to Utilize Them
  • Examine Make a Plan to Minimize Threats
  • Bundle and Integrate Asset Development Strategies
  • Not individual programs, but a system approach
  • Earn It, Keep It, Grow It

28
Just Start
  • Many rural communities have been successful in
    this endeavor
  • There are many resources available that can
    support your efforts
  • Be creative and build on your assets
  • YOU can make it happen!

29
  • Chuck Palmer
  • President
  • ISED Ventures
  • cpalmer_at_ised.org
  • 515-283-0940
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