Embrace the Teeter Totter Effect

1. Embrace the Teeter
Totter Factor
… What is so BIG
about
Small Business?
Presented by:
Jim Carroll
Executive Director, BIG Center
Kentucky Highlands Investment Corporation
London, Kentucky

2. KHIC‟s Mission
To provide and retain
employment opportunities
in Southeastern Kentucky
through sound
investments, training and
management assistance.
Regional, private,
non-profit business
development
corporation founded
in 1968 serving 22
counties in Eastern
and Southern KY.

3.  Created or retained over 10,000 jobs
 Assisted 483 businesses
 Invested over $180 million
 Created or retained over $120 million in annual wages

4. How Do We Accomplish Our Mission?
 Micro- Enterprise Loan Program – up to $35,000
 Small Business Loan Program – up to $250,000
 USDA B&I Loan Program – up to $10,000,000
 Revolving Lines of Credit
 Equity Investments
 Support Entrepreneurs with Training & Coaching
 Business Incubation

5. Definitions…
Small Business – a for profit business with 500
or fewer employees that is independently owned
and operated.
US SBA
Micro Enterprise – a business having 5 or fewer
employees and seed capital of no more than
$35,000.
Wikipedia
Entrepreneur – an individual who starts a for
profit business with the idea to supply a product
or service which is better, faster or cheaper than
what is currently available.
Jim Carroll

6. Economic Development
Recruitment Retention
(Get „em) (Keep „em)
New Companies
(Grow „em)

7. “For the United States to
survive and continue its
economic and political
leadership in the world, we
must see entrepreneurship as
our central comparative
advantage.”

8. What you should know…
 1/3 of GDP comes from companies that didn‟t exist
before 1980
 Between 1980 and 2005, young companies (<5yrs)
accounted for ALL net new job growth
 Firms have been started in bad economic times
 FedEx, Microsoft, Apple, Southwest
 50% of Fortune 500 and Inc. 500
Since 1980 the US has made a “profound shift from a
„managerial‟ to an „entrepreneurial‟ economy.”
Peter Drucker

9. What you should
know…
 New companies create new
industries
 Small businesses are more
productive
 Small businesses pay better
wages (+15%)
 Employees of small companies
have higher job satisfaction
 Small businesses are a major
source of innovation

10. What should concern you…
 Little “economic stimulus” is directed
towards Small Business - $15 billion of
$1.5 trillion
 Policy tends to hurt Small Business
 Sarbanes Oxley
 Health Care
 Taxes
 Higher Education
 27% of graduating college seniors plan to work
for nonprofits
 More seniors will graduate with sports degrees
than electrical engineering degrees
 < 20 business will be started for each $1 billion
in university research

11. What should give you
hope…
 SBA Policy…
 Elimination or reduction of SBA loan fees
 Raising SBA guarantee
 Raising loan maximums
 Expansion of SBIC program
 State is streamlining application processes
 Bank regulations focusing on Small
Business
“Economic recovery will be driven, in a large part,
by America‟s small businesses.”
– White House Statement

12. Things I Think I Think…
 SEC and states need to allow third party
securities (peer-to-peer loans such as Kiva,
Prosper) to operate without standard
regulation
 Allow shareholders of Small Business to
choose SOX compliance
 Health care reform – level out small business
costs, eliminate “entrepreneurship lock”
 Immigration – green cards for job creators
 University Technology License Office
competition
Creating a System of
 Educators… Stop vilifying capitalism and free Support for Entrepreneurs
enterprise and Small Business in
Kentucky: Insights and
 States need overarching visions for Small Policy Recommendations,
Marley and Dabson
Business Economic Development
 Each community must adopt a plan for
creating a Small Business Ecosystem

13. The Teeter Totter Effect
It only takes a small shift one
way or the other to make a
negative or positive impact on
a community. “Just one
person can really make a
difference – either for good or
for bad.”

14. The Teeter Totter Effect
 Identify the Champion
 Use the Champion to make introductions to
community leaders – don’t expect this person
to deliver YOUR message
 Understand the political dynamics
 Know the hot-buttons for the community
 Show support for other projects already in
place
 Communicate, communicate, communicate…

16. Entrepreneur
E
Ecosystem
Training
Capital
Mentoring
Connections
Entrepreneur
Commerce
Facilities
Connections
Networking

17. Entrepreneur
E
Ecosystem
Training
 Provide practical business skills training
 Recruit Trainers
 Provide training to Trainers
 Offer classes on a regular basis
 Partner with local Higher Ed Institution(s)
 Offer lecture series on Entrepreneurship
 Encourage participation in Excellence in Entrepreneurship Awards
 Publicize Boot Camp to students
 Provide facilities to conduct Boot Camp
 Encourage High Schools to introduce entrepreneurism
 Offer lecture on Entrepreneurship
 Offer Junior Achievement program
 Encourage participation in Entrepreneur Leadership Institute

18. Entrepreneur
E
Ecosystem
Mentoring
 Engage SBDC, SCORE, Chamber of Commerce, ED
 Deliver information to Entrepreneurs on existing programs
 Provide Mentors and Coaches
 Recruit Mentors and Coaches from existing business leaders
 Provide training to Coaches
 Establish Coaching Connections
 Assign Mentors to Entrepreneurs
 Mentors to schedule regular meetings with Entrepreneurs

19. Entrepreneur
E
Ecosystem
Facilities
 Identify space for collaboration with other entrepreneurs
 Establish Business Accelerator (nice to have)
 Shared office & conference facilities, shared technology, shared
manufacturing
 Below-market rates
 Favorable lease terms (short-term, no personal guarantee)
 Furnished

20. Entrepreneur
E
Ecosystem
Networking
 Utilize technology to communicate with Entrepreneurs
 email, Facebook, Twitter
 Sponsor regular networking events for entrepreneurs
 Establish CEO Roundtable group
 Sponsor Lunch & Learn Series
 Recruit small businesses to join Chamber of Commerce
 favorable rates
 benefits

21. Entrepreneur
E
Ecosystem
Commerce
Connections
 Establish a formal business networking group
 Establish “Do Business Local” campaign
 Establish/maintain connections with State and Fed
policy makers
 Make connections with University tech transfer
organizations
 Sponsor an annual Export Expo
 Encourage E-commerce
 Identify local developers
 Encourage instruction at local education institutions

22. Entrepreneur
E
Ecosystem
Capital
Connections
 Involve local banks
 Cultivate relationships with local investors,
CDC’s, etc.
 Identify local and state private investors
 Sponsor an annual Small Business Showcase
 Educate entrepreneurs on due diligence
expectations

23. Entrepreneur
E
Ecosystem
Training
Capital
Mentoring
Connections
Entrepreneur
Commerce
Facilities
Connections
Networking

24. What is so BIG
about
Small Business?
Jim Carroll
Executive Director, BIG Center
606.260.0830
jcarroll@khic.org