|A Renewed Entrepreneurial Spirit|
|Wednesday, 28 February 2007 02:31|
Don Henry wants to be judged on jobs.
As the director of the Northwest Region Entrepreneurship Center, the only criterion that matters, he said, is the number of new jobs his organization helps create. Even though the State of Illinois provides the bulk of his budget, Henry isn't bogged down by odious regulations or reporting requirements.
Henry's organization - housed in the Quad City Development Group's office in Rock Island - is a contrast to, for instance, Small Business Development Centers. While those federally funded agencies provide valuable business services, their shortfall is in monitoring the performance of businesses they help. Small Business Development Centers intensively track hours spent counseling clients, but they don't measure whether that counseling actually makes the businesses stronger. (See "The Little Program That Can," River Cities' Reader Issue 610, December 6-12, 2006.)
Part of what makes the Northwest Region Entrepreneurship Center atypical is that it's goal-oriented compared to the process orientation of Small Business Development Centers.
"Our final measure is: How many jobs have we created?" Henry said.
Yet calculating jobs is an inexact science. Henry, a retired electrical engineer who started three high-tech businesses, said that in its first two years of operation, the Northwest Region Entrepreneurship Center provided financial assistance to clients who expected to create 812 jobs over a three-year period.
Henry freely admits that the number amounts to an educated guess: "In three years, if everybody hit their mark, which they won't ... ." He estimated that 400 was a more realistic guess of job creation. The reason is that the businesses are more optimistic than realistic, Henry said: "It just doesn't happen that quick."
The Northwest Region Entrepreneurship Center is part of a growing network of entrepreneur-targeted organizations in the Quad Cities. The NewVentures Center in Davenport provides fee-based services to high-tech and new-product entrepreneurs and offers below-market-rate incubator space. (DavenportOne, which handles media inquiries for the NewVentures Center, declined requests for interviews related to the center.)
The Northwest Region Entrepreneurship Center is different from the NewVentures Center in that Henry's organization doesn't charge for its services; isn't focused on high tech; and doesn't offer incubator space.
Henry said he has no interest in an incubator. "I don't want to be in the position where I'm trying to sell my incubator space to pay the bills," he said. "If I'm going to do the mission I have, I've got to be able to do it unencumbered."
In addition to those organizations that offer business services, the Quad City Regional Entrepreneurs & Inventors Club hosts monthly meetings with networking opportunities and presentations for inventors, entrepreneurs, and service providers such as patent attorneys. A joint initiative of the NewVentures Center, the Illinois Quad City Chamber of Commerce, and the Northwest Region Entrepreneurship Center, the club has drawn between 35 and 65 people per meeting since being re-launched last fall, according to Bill Maurer, vice president of marketing and research for the NewVentures Center. (For meeting topics, dates, and locations, contact Maurer at 563-327-0162 or Sue Martel at 309-757-5416.)
Henry described his job in simple terms: "Identify businesses or startups that have the potential for continuous and rapid growth," he said. "And then basically facilitate that growth - anything that's legal that I can do to help them grow."
The Northwest Region Entrepreneurship Center has a current budget of $350,000: $250,000 for operations ($50,000 of which comes from the Quad City Development Group) and $100,000 for grants. In addition to paying for overhead costs and Henry's salary, the operational budget can be used to contract with consultants for client businesses. "The operating funds aren't all staples," Henry said.
Henry also has the leeway to shift operations money to grants, which he did last fiscal year and expects to do again in the current fiscal year. The grant money is disbursed in $5,000 and $10,000 chunks, clients have to match the funding, and it must be used for a specific project rather than general operating costs.
Since October 2004, Henry said, the Northwest Region Entrepreneurship Center disbursed $305,000 in client-matched grants and paid $150,000 in consulting fees to assist clients. In December, he estimated that 60 clients had received grants.
A key difference between the Northwest Region Entrepreneurship Center and the NewVentures Center is that Henry's organization encompasses a wider range of entrepreneurship - including operations such as wineries. "Some people think that the entrepreneurship center can magically ... create high tech," he said. "I do have high-tech clients. But I also have a lot of low tech." Client products range from 3D educational simulations to retractable pet gates to pretzels.
JTM Concepts in Rock Island qualifies as one of the high-tech clients. The firm, which provides technical services and documentation for the government and transportation companies, used a $5,000 grant from the Northwest Region Entrepreneurship Center for development of 3D education simulations that are now being tested in Rock Island schools. "The 3D portion of our business is something we've been working on for seven years or so," said Tracey Masamoto, a director with JTM. She added that the company's president was absorbing the cost of that development, and the Northwest Region Entrepreneurship Center grant helped pay for the trademarking and copyrighting of the simulations.
That points up one of the difficulties in quantifying jobs created by the Northwest Region Entrepreneurship Center. Many of the businesses it serves aren't startups, and their growth can't be attributed exclusively to the assistance of Henry's organization. The amount of grant money is often a big help, but it's small enough that it isn't responsible for growth by itself.
When Marc Pichik went to the center, his Retract-A-Gate business was already off the ground. Pichik's Galena-based business - which manufacturers security gates for pets and children - received a $10,000 grant for marketing his product. The company has two full-time employees, Pichik said, along with several part-time employees and contractors. The company was doing some advertising, he said, but the grant "allowed us to do that much more."
Henry said that the Northwest Region Entrepreneurship Center - and other state-funded regional centers - were developed with the understanding that communities cannot rely on large corporations for their livelihoods. "The GMs and the [other large] companies are not always going to be there," Henry said. "Jobs are created more by small businesses than all the big businesses together. We want to basically exploit that."
This isn't typical small-business assistance, which Small Business Development Centers or the volunteer SCORE organization can provide. (Henry often refers people to those groups when they need to develop a business plan. Similarly, a business that's looking for venture capital might be directed to NewVentures.) What Henry can offer is minor financial assistance to get an idea rolling.
And it's not just for any small business. "Your business has got to be able to grow over time beyond the bounds of local population," he said. He used as example a pretzel place in Peru. The concept wasn't new, he said, but the owners had already done the franchising legal work - which pushed it from a local business to an entrepreneurial opportunity.
For more information on the Northwest Region Entrepreneurship Center, visit (http://www.nwrec.org).
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