Growing Kentucky's Rural Economies
Helping entrepreneurs, growing small businesses, and developing future business leaders are the focus of a variety of entrepreneurial programs that provide one-on-one coaching assistance
When Danny and Sharon Halsey decided to expand their small business in Campton, they set off a chain of events with far-reaching effects on the economy in this rural part of eastern Kentucky. As owners of D & S Outdoor Products, they sell Stihl and Cub Cadet products, Carhartt clothing, Justin work boots, and perform service on a variety of small-engine outdoor equipment. They needed a larger showroom, plus more storage and workspace.
That's when the Wolfe County Industrial Board got involved. As temporary owners of a run-down and vacant former electronics manufacturing building on Highway 15, this group of six community leaders met with the Halseys. Board member Pam Pilgrim says, "The Halseys came to us with a well-thought-out business plan and we sold that dilapidated old building to them in 2005. It sure looks different now."
Every night after normal business hours at their old location, Danny and Sharon worked to revitalize the building. "For seven weeks we worked over there, cleaning up the building and putting in our new displays," Danny recalls. "The first year we moved to the new larger space, we saw about a 25 to 30 percent increase in our gross sales revenue."
The Halseys' retail space and warehouse occupy about 10,000 square feet of the structure. They also cleaned up and revitalized the other part of the huge building. Their hard work provided space for two tenants, a roller-skating rink and a variety store. The variety store moved out in October, so they'll have approximately 8,000 square feet of rental space available this May or even earlier.
In the meantime, the space the Halseys moved out of on Main Street now serves as a storage spot for the local hardware store.
One couple's decision to expand an existing small business provided opportunities for the growth of two new businesses that's led to even more employment and tax revenues within their county. They've improved the appearance of a shabby old building and given the area something to be proud of. Their new retail space is attracting customers from far beyond the county´┐Żs borders. Representatives from Stihl send other dealers from throughout the region to Danny's store for a firsthand look at how to be successful. Last spring, they even made a training video there.
Throughout Kentucky, more than 300,000 small-business owners provide goods and services to customers in their local communities, even other states and countries.
Whether the business is a one-person endeavor, a family enterprise, or an employer providing jobs for several workers, the impact on local economies is far-reaching. Each small Kentucky business needs goods (office supplies or raw materials) and services (an accountant or computer technician) throughout the year--and that in turn helps other local businesses develop. And small-business owners play a vital role in the civic life of their communities.
Encouraging more Kentuckians to start up small businesses is a key feature of our state's post-tobacco economic development efforts. Successful small businesses pay taxes on their earnings, increase property values, and contribute a sense of vitality wherever they spring up. Helping these businesses start up, then grow and develop strong roots within their communities, takes a special focus.
Growing a new crop of entrepreneurs
The Halseys already had experience as business owners. But what about the men and women who've always worked for someone else? How can someone make the move from employee to entrepreneur?
Being self-employed or becoming the boss of your own company with employees is a big change. Having a good idea for a new product or service isn't enough--you'll need a lot more to get your idea to the people who want it and will pay for it. Even if you're smart about your industry or know how to do something unique, you might not know how to think like a business manager, or how to make the right connections to money, or where to go to get other information vital to your success.
Fortunately, there are numerous entrepreneurial programs across Kentucky offering assistance.
The Kentucky Entrepreneurial Coaches Institute trains volunteer community leaders to help aspiring independent businessmen and women develop realistic plans and achieve their goals. This innovative program operated in 19 counties in northeastern Kentucky when it began in 2004. It has since been expanded to include more than 20 additional counties in south-central Kentucky in cooperation with The Center for Rural Development in Somerset.
Each year, a new group of coaches receives training that equips them to help beginning entrepreneurs fine-tune their business plans and get them ready to turn their ideas into reality. Each coach meets with three to six entrepreneurs eight to 10 times each year for face-to-face discussions; coaches are also available for phone conferences and e-mail conversations.
Johnathan Gay, director of Morehead State University's Innovation Center, learned the finer points of business coaching as a member of the first Kentucky Entrepreneurial Coaches Institute class in 2004-2005. Gay says, "Here at the MSU Innovation Center, many of our clients are developing businesses that are based on technology to try to grow a new economy in eastern Kentucky." Gay's clients are typically attempting to commercially develop some new form of technology, such as a new software program or invention, so he helps them find ways to protect such intellectual property.
In addition to his duties at Morehead, Gay continues to serve as an entrepreneurial coach. Although he frequently advises entrepreneurs with high-tech products and services, he also has time for more traditional business ventures.
In 2004, Ritchie Rednour of Clay City connected with Gay. "I was just a small-time real estate investor back then," Rednour recalls. "For several years, I'd owned some mobile homes and single-family homes that I rented to people, then I bought a multi-family unit. I decided I wanted to take things to the next level and grow my business."
Starting with 55 rental units and five employees in three counties, just five years later Rednour's business now includes 2,200 rental units and 72 employees in 21 counties.
Such rapid growth was not always easy or smooth, and Rednour credits the Coaches Institute with helping him stick to his plans. "A lot of folks have a false impression of what business is like," Rednour says. "They think you just rake in the money all the time, but it isn't that easy. It's important to have someone in your community who can give advice and provide moral support, that extra encouragement you need that will keep you going along. Some people give up just at the moment when they're poised for success, and the Coaches Institute helped me see that more than anybody." Instead of being discouraged, Rednour and Gay figured out ways to keep developing the business.
Kentucky Highlands Investment Corporation is a community development corporation in London that serves 22 counties in southeastern Kentucky. KHIC forms public and private partnerships as a development venture capital investor to stimulate economic growth and create employment opportunities for citizens in the area, while maximizing federal funds and grant dollars for southeastern Kentucky. They have helped more than 500 businesses by providing more than $150 million in financing. In addition to financing, KHIC offers expert technical assistance as well as a wealth of resources to grow businesses.
For entrepreneurs, their Center for Entrepreneurial Growth offers an intensive, customized Training & Coaching Program. This small-business incubator can house three companies and also holds monthly training sessions for the general public. It focuses on technology businesses or those that leverage technology in their business model. Business owners receive coaching and mentoring from experienced entrepreneurs, access to mentors and advisors during the development process, participate in a formal entrepreneur management development training program, and have access to capital if their businesses meet milestones and accomplish specific items in their action plan.
In partnership with Technology 2020's Center for Entrepreneurial Growth in Oak Ridge, Tennessee, KHIC also offers a six-month Energy Boot Camp. Bob Wilson, the Center's director, says that the Energy Boot Camp is "designed specifically to help energy-related researchers, inventors, and entrepreneurs prepare a path to business sustainability and profitability." (For more information, see "Starting up an energy business" sidebar below.)
The next generation
The above programs are aimed at adult entrepreneurs. But showing young people that owning and operating a small business is a good career option is another very important step toward economic development throughout Kentucky. Several programs just for high school and college students are giving our state's young people the skills they'll need to become successful business owners.
In Somerset, The Center for Rural Development hosts an Entrepreneurial Leadership Institute each summer for high school students from 42 counties in southeastern Kentucky. A variety of classes and activities offered during this weeklong program helps develop future business leaders with a program that includes team competitions for presenting concepts for new businesses.
High school students from all 120 Kentucky counties are invited to apply for spots in the Youth Entrepreneurship Camp held each summer on the Frankfort campus of Kentucky State University. A joint effort with KSU and the Kentucky Cabinet for Economic Development's Small Business Services Division, this annual camp's 30 participants learn how to create a business plan, develop advertising and marketing strategies, and explore the details of money management and cash flow.
During the regular school year, two unusual competitions allow students to showcase their business ideas.
For high school students, Kentucky Highlands Investment Corporation sponsors the Youth Entrepreneurial Leadership Institute Business Concept Competition. These younger students learn how to develop a business plan, then present their ideas to the judges. Winners receive partial scholarships to study at Eastern Kentucky University.
For students already attending colleges in Kentucky, teams are invited to compete in the annual Excellence in Entrepreneurship Collegiate Business Concept Challenge. Teams present detailed plans for a potential business enterprise to the judges, gaining valuable experience in thinking through all aspects of launching a new business and speaking convincingly to decision makers.
Jerry Rickett, president and CEO of KHIC, says, "We believe that entrepreneurs are the best way to have long-term economic development. We champion local entrepreneurs and what they've done for their communities. We're encouraging people who will start businesses in rural areas´┐Żand stay in these rural areas as their business grows."
STARTING UP AN ENERGY BUSINESS
Starting a business in the growing fields of alternative energy resources and improving energy efficiency presents unique challenges.
In November 2007, the folks at Kentucky Highlands Investment Corporation, in conjunction with the Governor's Office of Energy Policy and the Appalachian Regional Commission, teamed up to offer a special Energy Boot Camp for entrepreneurs in Appalachian counties or those with ties to energy research laboratories who are involved with these new kinds of businesses. Participants range from companies that want to develop wind farms, make biodegradable lubricants from animal fats, or use innovative energy technology.
Stephen Taylor, KHIC development director, says, "There are a lot of generic business concepts they need to learn, then specific concepts that are unique to business in the energy field. There are a lot of special rules of the game in the energy sector that have to do with regulatory issues and where to find funding. We have classes for the first part--teaching the generic business basics constitutes about 80% of what we do--plus coaching and mentoring to help with the second part."
For more information about the Energy Boot Camp, go online to www.khic.org/EBCProSum.html.
KENTUCKY WEB SITES FOR ENTREPRENEURS
Kentucky Highlands Investment Corporation's Bob Wilson says helping inventors and tinkerers learn about all the steps involved in turning ideas into a successful business requires face-to-face meetings. Wilson says, "We've made these tools and support accessible to entrepreneurs through our various programs. We invite them to come out of their garages and basements to learn how to develop and execute a successful entrepreneurial venture."
Each of the Web sites below will give you information to help you get moving with your ideas and help develop Kentucky's rural economies.
Excellence in Entrepreneurship Awards: Eastern & Southern Kentucky
Kentucky Highlands Investment Corporation
Kentucky Entrepreneur Acceleration Network
Kentucky Entrepreneurial Coaches Institute
Kentucky State University Youth Entrepreneurship Camp
www.kysu.edu Search for ´┐Żentrepreneurship camp´┐Ż to locate various links.
Morehead State University Regional Enterprise Center at West Liberty
The Center for Rural Development
KEYWORD EXCLUSIVE : STARTING A NEW BUSINESS VENTURE?
Think you might have an idea you could turn into a business? For a list of questions you'll need good answers to before you start up your new business venture, and more on business incubators, go to entrepreneur.