Missouri Small Business and Technology Development Centers Blog

As I sat in a legislative hearing the other day regarding economic development and job growth, I heard a theme emerge in the discussion — a deep concern for small businesses, particularly in rural communities. Whether referred to as “Mom and Pop” operations or Main Street businesses, these small firms make up the fabric of these small, rural communities, but their very existence continues to be threatened by recessionary times and larger stores that sell on low price and volume.

We are seeing some ideas and trends emerge around rural entrepreneurship. One of the primary messages these days is the importance of the upcoming 2010 census, which has the potential to affect rural small businesses for years to come in terms of infrastructure and tax base. If you’re an entrepreneur in a rural area, it might serve you well to join in on the canvassing activities to ensure that your community receives its fair share of funding for valuable services and amenities that keep customers in your area.

“Shop Local” campaigns have been around for a while, but they are seeing a new resurgence as communities vie for limited spending money from their residents and fight the big box and online battles. If your community doesn’t have some sort of reminder to residents to look locally first, start one. It’s as easy as printing up a few window stickers or flyers and posting them in all of the local establishments. These “resident companies” — the ones that are born, grow and support our communities — create more jobs than all of the big guys combined. We need to keep them strong.

There are lots of construction, refurbishment and rehab projects going on in rural communities as a result of the stimulus funding. If you are a local firm that could have a role in those projects, find someone to assist you with government contracting and sign up to get your fair share of the dollars.

In addition to record numbers of Baby Boomers starting businesses, many are forecasting that they will also be moving to small towns to enjoy a slower pace and healthier lifestyle. Consider what goods and services they will want in their retirement locations, and provide them!

One of the most common questions I get in our community is, “Are people starting businesses during this recession?” I typically get a surprised reaction when I say that they are. There are many reasons for that, but among them is that as larger companies downsize, there are many highly capable, experienced and talented workers looking for work. And many of them are deciding to create their job instead of simply find another one.

Entrepreneurs are the up and coming workforce in our nation. Our economy is changing from one with a corporate and industrial basis into one with an entrepreneurial foundation. Many workers who have been burned by layoffs from a larger company are eager to take their futures into their own hands.

To make this even more interesting, here is some information from the Bureau of Labor Statistics. While from the fourth quarter of 2007 through the fourth quarter of 2009 the total number of non-agricultural self-employed people decreased, the number of self-employed African Americans increased by 5.7 percent. Self-employment among Whites decreased 3.4 percent, and self-employment among Asians also decreased by 10.5 percent. Self-employment in the Latino population has remained level.

Interestingly enough, this is actually reflective of national trends in the months and years preceding the recession. Entrepreneurship in the African-American community has been increasing for several years. Although no one knows for sure what is behind that trend, some speculate that it has to do with the industries in which entrepreneurs of different backgrounds seek self-employment.

It’s an interesting trend to watch. After all, regardless of where the jobs are created, we know that net new job growth is greatest among small businesses, and they will be the force that leads our nation into economic prosperity once again.

The Edward Lowe Foundation, one of the premier entrepreneurship support organizations in the U.S., has done a lot of research into the characteristics and needs of what it calls the “second-stage company,” those firms that are past the start-up stage but not yet fully mature.

The big news about these companies is they are the job creators. In fact, over the past several years, while corporations have downsized and actually lost jobs, these existing companies, usually typified by sales in the $1-$25 million range with fewer than 100 employees, are adding jobs in large numbers, sustaining our economy and communities.

These firms have high potential for steady, dramatic growth. Their owners have the intent to grow. Because of their unique challenges, they seek assistance that is as fast-paced as their growth. They seek information in a just-in-time format that will help them solve complex, often concurrent, problems. They are not attracted to traditional modes of learning because they simply do not have the time.

The Missouri Small Business & Technology Development Centers are crafting a special set of services to address the most pressing needs of second-stage companies. We’d love to hear from you regarding what you need to help your business succeed. Feel free to email your ideas to paulsellm@missouri.edu.