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Breakout Notes: Innovative Partnerships to Launch New Business Starts and Create New Jobs in Rural Communities

Posted By Jeanne Yocum, Monday, October 14, 2013

Dr. George Millsaps, state director of the NC Small Business Center Network (SBCN), started us off with a quick review of North Carolina’s economy and higher education community. There are 60 SBCNs in the state, primarily located at community colleges. In total, these facilities offered 3,791 entrepreneurship training events in 2012-2013, created about 1,732 jobs, and saved 1,235 jobs at a cost of $2,097 per job created/retained.

 

Barry Ryan, associate director of the NC Rural Economic Development Center, gave an overview of that organization, which is a nonprofit organization devoted to rural development. They operate a micro-enterprise fund and a small business credit initiative, which is a U.S. Treasury funded program.

 

Working in partnership, these two organizations have taken the traditional workforce development model and brought it together with the business development model and are training people to prepare them for self-employment.

 

Here is information on programs they operate using this new model.

 

NOW – New Opportunities for Workers

Was offered in 22 community college sites from 2004-07.

Thousands of dislocated workers attended information sessions. The program was built to fit the community college infrastructure and procedural system. Hundreds received free training, but relative few business starts resulted. So everyone did everything right but nothing was accomplished. The program didn’t include counseling. Some folks really took off with the program but some did not. Each college got the same amount of money, which didn’t work.

 

So after looking at what happened with this program, they then retooled and offered  GATE, Growing America Through Entrepreneurship, which was launched in 2009 with $1.6 million from the US DOL. This was for unemployed people. This program model is built around case management and coaching and is built to leverage community college capabilities and strengths. It features one-on-one assessments and customized training plans.

 

The program is for dislocated (i.e, unemployed) workers. They spent that these people spent live working for a manager, and they don’t really know how to manage themselves. So advisors end up working with many life issues, like how to manage debt.

 

In addition to advisors in the small business center network, there is a virtual site with two staff people is based in Raleigh working with people all across the state. That worked well to provide statewide service.

In this model they made the training customized to the individual. They think of each person as an individual business with individual needs that are specific to their industry and business. So they provided scholarships instead of giving the money to the colleges directly. This drove funding costs down from the previous model. Average scholarship size is about $500.

 

Big component of this is that the North Carolina Employment Commission gave a work search waiver so people didn’t have to look for a job while they were actually starting their own business. This let people get their unemployment check while they were in this program.

 

Results from 2009 to now: 1,500 scholarships awarded to clients from 83 NC counties

8,000 hours of counseling and over $250,000 in tuition reimbursements

203 GATE clients have started businesses, creating 534 jobs to date

 

New Generation Ventures – This is their latest program, which was started 18 months ago. It focuses on young adults between 19 and 30. Loss of young folks in rural areas is critical issue. They wanted a program that would make self-employment a possibility for young people in rural North Carolina.

 

This program builds on the GATE model. It offers:

- Virtual service delivery

- Emphasis on online training

- Average scholarship provides $300 in coursework

- Innovative finance solutions

The individual case model also used because this population also needs a lot of support.

 

New Generation Ventures Microloan Circles

5-6 clients meet using Google hangouts and make loan recommendations to the Rural Center. They are vetting each other. Had great participation. So they’re looking to scale this pilot.

Small loans, most under $5K and short-term of less than 1 to 2 years.

2 clients funded to date; additional rounds coming soon!

Relationship based funding, bi-weekly payments

If someone isn’t repaying the loan, the peers in the circle know it.

 

They are looking to tweak their model so that access to funding is not a roadblock.

 

Results in first 18 months:

Served 206 young adults, average age 26,

35 business starts, 23 existing businesses, 84 jobs created

 

Lessons learned from both programs:

Training is necessary but not sufficient. Training is best when customized to client needs.

Case management is key. Traditional counseling model doesn’t work for rural dislocated workers and young adults.

Community college/non-profit partnership leverages strengths of both organizations.

Job search waiver helps to create a runway for those who are unemployed.

Tags:  NACCE  NACCE2013  North Carolina 

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