Community Entrepreneurship Demonstration

Background

It's always difficult to start and run a business. In rural communities, the problems are often magnified.

Entrepreneurs unrecognized. Many rural communities and residents have long depended on farming and manufacturing to provide jobs and economic stability. Out of the limelight, small business owners and entrepreneurs have been largely invisible assets. As a result, communities experiencing massive layoffs are left feeling especially hopeless, wondering where jobs and tax base will come from in the future.

Weak business support services. In urban areas, entrepreneurs have ready access to programs that help them develop business plans, identify new markets, commercialize new technologies and products or finance startups and expansions. Those same services are difficult or impossible to find in smaller communities.

The discouragement of isolation. Often distant from one another, rural entrepreneurs lack the peer support networks that can keep them motivated and allow them to learn from others. Distances to markets and suppliers create added problems.

The Rural Center's Community Entrepreneurship Demonstration grant program seeks innovative ways to remedy these challenges.

Community Strategies

In late 2003, the Rural Center joined with the N.C. Department of Commerce in a collaborative venture to determine if a small public investment in rural entrepreneurship development would to lead to jobs and business creation in distressed communities. The plan was to provide small grants to help launch community-based projects that encourage small business start-ups and growth. The Commerce Department allocated $440,000 from the North Carolina’s Small Cities Community Development Block Grant (CDBG) toward the project. The Rural Center contributed $160,000 from its research and development budget and offered the Institute for Rural Entrepreneurship to guide and staff the demonstration.

Communities interested in competing for demonstration grants were invited to participate in two-day workshops that introduced the steps involved in designing an entrepreneurial support system. Fifty-nine communities sent some 200 local leaders to those workshops. All applicants were required to enlist a team of individuals and agencies as partners in the project and to address the five essential elements of entrepreneurial support — education and training, technical assistance, networking, capital, and supportive culture. Teams could provide referrals for any entrepreneurial services they could not provide themselves. They also were encouraged to design programs that addressed specific local challenges and to build on the assets in their own communities.

Of the 59 interested communities, 24 followed up with grant requests. Ten projects were funded. Three projects tackled issues on a regional scale; seven focused on individual towns or counties. The grants were awarded to:

Encapsulating Entrepreneurial Enterprises (or E-Cubed), covering six counties in the far west, plus the Qualla Boundary, Eastern Band of the Cherokee Nation
Roanoke Center’s Entrepreneurship Plan, involving five counties in the northeast
Sound Jobs: Homegrown Businesses that Come Naturally, covering five counties bordering on the Albemarle and Pamlico sounds
Entrepreneurial Stimulus Program of Burke County
Marine and Aquaculture Resource Training (MART) of Carteret County
Stimulating the Mom and Pop Economy of Columbus County
Growing Entrepreneurs, led by the town of Elkin in Surry County
Entrepreneurial Development Partnership of Watauga County
Williamston Incubator Program of Martin County
Revitalize Yancey! of Yancey County

Grants ranged from $30,000 to $100,000, depending on the scope of the project. Funds were made available for the projects in August 2004, with up to 15 months to complete the work. During the demonstration, representatives of all 10 projects gathered twice to share experiences and advice.

Summary of results

While the ultimate goal of the Community Entrepreneurship Demonstration was job creation, the first step was the creation of partnerships that would provide the necessary long-term support and encouragement for start-up companies and other small businesses. Most of the communities succeeded in this effort. Through entrepreneurial networks, local funding for full-time facilitators and other measures, they have committed to continuing the work of the demonstration. Most also are now active partners in the Institute for Rural Entrepreneurship’s ongoing work to build an entrepreneur development system in each rural region of the state, in a project funded by the Kellogg Foundation.

Positive results also are evident in the activities and outcomes of the demonstration projects. During the 15-month period of the demonstration, 390 people availed themselves of the training, technical assistance and consultations offered through the 10 projects. More specifically:

275 people consulted with project teams about their business ideas,
201 received referrals for adding business services, and
216 completed an entrepreneurial skills training program.

Furthermore, even in this short time, the demonstrations documented the creation of 49 new businesses growing out of their programs. These businesses created the equivalent of 75 full-time jobs in 22 counties. Many others who received help or training also are on the path to starting or growing businesses in the coming year.

The demonstration offered an especially hopeful sign for impoverished local communities. Low- to moderate-income individuals accounted for approximately half of the people who received some type of assistance through the demonstrations and benefited from two-thirds of the jobs created through the project.

Community Entrepreneurship Demonstration

Background

Community Strategies

Summary of results

Links