Economic Gardening: Changing Community Culture to Grow Entrepreneurs

Who among us doesn’t want to live, work and play in a vibrant community? In addition to supporting local entrepreneurs, each of us can help to cultivate community vitality by understanding the larger strategies designed to assist small businesses to grow and thrive. Programs that help to develop business plans, obtain financing and market and manage enterprises are frequently included in a community’s economic “tool box.” Universities, Small Business Development Centers and local Chambers of Commerce often provide direct assistance that can range from one-on-one consultation to classroom instruction and group workshops.

Pioneered in Littleton, Colorado in 1987, and based on David Birch’s research at MIT, the concept of “Economic Gardening” recognizes that small businesses create most of the new jobs in local economies. While providing skill training for individual entrepreneurs is a very important component of economic gardening, it is only part of the picture. If entrepreneurs are to have their best chance to grow and thrive, being part of a community culture that understands, values and supports entrepreneurship is also important.

Communities are sometimes unaware of the depth and breadth of the local entrepreneur base and its contribution to their overall economy. They might not understand the support the community can provide and the importance of a supportive culture. “Culture is a mindset built on commonly held and shared beliefs …about starting, owning encouraging and supporting our own companies and entrepreneurs. It is a way of thinking that drives a group to act.” (EDA University Center/Center of Northern Iowa) The actions of local leaders and residents demonstrating their support for entrepreneurship are at the core of this mindset.

There are various dimensions to entrepreneur friendly communities and many players need to contribute toward its creation. It is not just the responsibility of local leaders or economic developers. Cultural change is broad in its scope and goes beyond positional leadership to less formal social networks embedded in the community. With that said, local leaders – private and public – can be “change masters” by championing initiatives and attitudes that support entrepreneurs. The following are some examples. This list is not meant to be exhaustive, but to describe supportive services that emerge from a community mindset that nurtures entrepreneurs:

  1. Risk tolerance: At the most basic level, entrepreneurial communities embrace a mindset that tolerates risk and does not see trying and failing at an enterprise as a character flaw. It supports and encourages innovators who are willing to try time and again before reaching success.
  2. Consumer support of local business: Supportive communities have a “buy local” initiative, encouraging residents to support and patronize their businesses and services first.
  3. Celebration of success: Economic development organizations such as the Chamber promote the successes of local entrepreneurs and small businesses. Start-ups and expansions are recognized and championed through media coverage.
  4. Commitment of Public Officials and Offices: Local elected and appointed officials set a tone of appreciation for business innovators. They take the lead in insuring that local governmental offices and agencies, often the first stop for entrepreneurial enterprises, cut through red tape, streamline approvals, and coordinate with each other, perhaps through a “one stop” center approach.
  5. Public and private financing alternatives: It is important to offer a variety of different financing avenues for entrepreneurs in recognition of their special need for start-up capital and a fast turn-around time for project implementation. Building partnerships between private and public financing sources to reduce/share risks and provide incentive financing, shows support for entrepreneurs.
  6. Networks: Entrepreneurs benefit greatly from opportunities to network with their peers. Facilitating the creation of an entrepreneur network which can then take on a life of its own provides a supportive and strategically beneficial environment.
  7. Supportive services and spaces: Incubators for start-ups and expansions help to reduce initial expenses for facilities and services. Maker spaces are community centers that provide access to tools, equipment and other technology needed to test and launch new products and ideas.
  8. Infrastructure: Entrepreneurs need access to markets and resources. Broadband Internet capacity is a critical component of an entrepreneurial friendly community.

In short, the challenge for communities is to create an environment that nurtures, appreciates and values entrepreneurs and their unique needs and contributions. An adaptation of a quote by Roger Blackwell, Professor Emeritus in Marketing at The Ohio State University, is as follows:

To create a community culture, mindset and initiatives that support entrepreneurship, and to realize the benefits and investment from this economic development approach, what does a community need to become?

The following resources provide additional information:

EDA University Center/University of Northern Iowa: eda.uni.edu/supportive-culture

Ewing Marion Kauffman Foundation: kauffman.org/what-we-do/resources/policy/economic-gardening

Myra Moss is an Associate Professor and Extension Educator (Heart of Ohio EERA).

Can Solar Energy Save Money for your Farm or Business? Tips to Separate Fact from Fiction

Advances in technology and policy mandates that require the installation of photovoltaic (PV) solar have contributed to the reduction of system costs. In recent years, both the power and efficiency of solar panels have steadily improved, while the cost of solar panels have dropped dramatically. According to the National Renewable Energy Laboratory, the average cost to install a commercial PV solar system in the United States has decreased from $5.23 per watt (DC) in 2009 to $2.13 per watt (DC) in 2016[i]. The declining cost of equipment and installation makes installing a solar system enticing for many agricultural producers, and PV panels are an increasingly common sight on farms across Ohio.

The declining cost of installing a PV solar system is enticing for many agricultural producers. However, while solar may provide an attractive payback on some farms, every farm is unique and evaluating the financial viability of investing in solar requires careful consideration of system design, costs, and modeling assumptions.

Key Steps in Project Evaluation:

  • Plan and prepare – Be curious and careful! Investing in on-farm PV solar requires a significant up-front investment that will involve numerous contracts, spanning decades. It is important to review resources and conduct a detailed project assessment before signing any paperwork.
  • Compare and contrast – Secure three or four project quotes to analyze various proposals and modeling assumptions (e.g., system production, net excess generation, energy escalation, incentives, operations and maintenance costs).
  • Research and review – Understand the equipment and shop around! Just as tractors and agricultural equipment have unique features, not all solar projects are created equal. Investigate your various proposals and identify the key difference between the system design, equipment, and warranties (e.g., type and efficiency of solar panel, string inverters or micro inverters, panel warranty, inverter warranty, installation warranty, ground mount or rooftop design, galvanized or stainless fasteners).
  • Discuss and debate – Review the project proposals with your utility provider and your tax professional to evaluate the project assumptions, contracts, and financial implications and/or benefits.

Extension Resources – Solar Electric Investment Analysis Bulletin Series 

Solar Bulletin SeriesEvaluating the financial investment in solar requires careful consideration of system costs, the value of production, and operation and maintenance costs. Unfortunately, some proposals are hard to understand making it difficult to make fully informed investment decisions. To help simplify the key considerations of evaluating a PV solar project, the University of Wyoming and Ohio State University partnered to develop a bulletin series that clarifies the information and assumptions that are essential to the assessment process. The bulletins listed below, are structured as a six-part series arranged to systematically progress the reader through the project evaluation process.

Part 1: Estimating System Production – Site-specific factors such as shading, orientation, tilt, temperature, and panel degradation can influence the amount of electricity produced by a PV solar system.

Part 2: Assessing System Cost – A better understanding of direct system costs, indirect capital costs, operations and maintenance, and standard assumptions provides a more accurate financial analysis, fostering informed investment decisions.

Part 3: Forecasting the Value of Electricity – To calculate energy savings for a project, one must consider important variables, including the details of the individual rate structure and the assumed energy escalation rate that influence the value of electricity a PV system produces.

Part 4: Understanding Incentives – Despite declining costs for PV solar, there are various federal, state, and local incentives which greatly affect the financial viability of a PV installation.

Part 5: Conducting a Financial Analysis – Understanding the solar resource production, system cost, value of electricity, and available incentives enables a robust financial analysis. Accurately evaluating the viability of a solar project requires understanding financial concepts such as simple payback, net present value, and the levelized cost of energy.

Part 6: PV Solar Example – The National Renewable Energy Laboratory developed the System Advisory Model (SAM) to help developers, installers, and potential system owners estimate the system production and financial impacts of renewable energy projects.

These materials are designed to increase participants’ knowledge of PV solar energy development and the financial considerations to guide informed decision-making with future investments. This six-part bulletin series and additional materials are available for download at: energizeohio.osu.edu/farm-solar-energy-development.

Interested in Learning More?….Join Us at Farm Science Review!

The 2017 Farm Science Review (FSR) will be held September 19-21 at the Molly Caren Agricultural Center near London, Ohio. Farm Science Review offers visitors the opportunity to learn about the latest agricultural innovations from experts from the College of Food, Agricultural, and Environmental Sciences at The Ohio State University. The Small Farm Center at the Farm Science Review features 27 educational programs suited to smaller farms, with particular emphasis on alternative enterprises, alternative production systems and alternative marketing strategies.

If you plan to attend the FSR and are interested in additional information on solar energy in agriculture, please join us for the 50-minute presentation titled, Considerations for Investing in Solar Energy for Your Small Farm on Thursday September 21, at 12:00 p.m. at the Small Farms Center Tent located at the corner of Corn Avenue and Beef Street.

For additional information, please click here to review a complete list of educational sessions and demonstrations offered at the 2017 Farm Science Review.

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[i] Fu, R., Chung, D., Lowder, T., Feldman, D., Ardani, K., and Margolis R. (2016).  U.S. Solar Photovoltaic System Cost Benchmark: Q1 2016, National Renewable Energy Laboratory (NREL).

 

Eric Romich is an Assistant Professor & Extension Field Specialist for Energy Development with OSU Extension.

Vibrant Downtowns Key to Community Development

Prior to World War II, many communities in the U.S. were centered around downtowns for living, shopping, entertainment and work. The quintessential downtown was typically home to a bank, a post office, government offices, a library, clothing stores, a music store, a cinema, a grocery and a diner. Most of the buildings offered apartments on the second, third and fourth floors. Downtowns were the hearts of communities.

Since the post-war suburban boom, downtowns have changed and continue to evolve. With the emergence of shopping centers, malls, one-stop shops and improved transportation, many of the small businesses lining the downtown streets have been forced to close. Downtowns all over America lost that spark that made them special, some turning into local government offices, some with a few shops and a lot of boarded buildings. In some places, they have been completely abandoned as neglect and apathy took over. In the age of 70 mile per hour highways, constant sales and advertising, Internet shopping, and an always-on-the-go mindset, the glory days of downtowns are lost on many.

Many communities, however, have not given up on the importance of downtowns in community development. Many of these communities have joined Main Street America, an organization dedicated to revitalizing downtowns in a way that does not damage the historic integrity while ensuring economic vitality. Many communities in Ohio including Cleveland, Delaware, Greenville, Medina, Portsmouth, Van Wert, Wooster and others have become accredited Main Street America programs. The Main Street Approach is used by member programs to provide structure and stability to the revitalization efforts of downtowns. The approach includes inputs, transformative strategies and outputs.

Downtowns - Jones 2016-08-04

Jeff Speck, an urban planner and designer, has determined that the singular factor of community success is walkability, which is best accomplished in the downtown area of communities. In his 2012 book, Walkable City: How Downtown Can Save America, One Step at a Time, Speck writes, “The General Theory of Walkabilty explains how, to be favored, a walk has to satisfy four main conditions: it must be useful, safe, comfortable, and interesting.” Speck explains how decisions have long-lasting and far-reaching effects and what decisions need to be made to have such effects on downtowns.

Walkable City - 2016-08-04Communities across the nation have seen the positive impacts a thriving downtown has on community development. If you believe your downtown could use a little TLC, suggest to your community development leaders consider strategies for revitalizing your downtown.

Revitalizing downtowns is not a ‘flavor of the month’ experiment, but rather a proven means to developing communities and stimulating local business. Additionally, revitalizing downtowns into walkable community areas will improve community health.

Check out Speck’s books and his TED Talk, contact Main Street America, and be sure to look over the variety of ready-to-use tools created by OSU Extension, UWEX, and University of Minnesota Extension that can be used to create vibrant downtowns.

Caitlin Jones is the Program Coordinator for OSU Extension Community Development in Van Wert County & the Maumee Valley EERA.

Supporting Local Businesses this Holiday Season

Shop LocalNow that Halloween has passed, we are starting to once again be reminded that the gluttony of holiday shopping is just around the corner. Already my Facebook wall is full of memes and commentary from my friends about where they will and won’t shop on Black Friday. However, there is a larger and much more important question at stake when it comes to where to do your shopping for the holidays. In a time when rural communities are threatened by unemployment, out migration, and job loss, where we spend our hard earned dollars counts more than ever.

We know that small firms (less than 500 employees) account for 67% of the net number of new jobs. Let me emphasize what you just read. Net new jobs. Even if we are not looking at new jobs, according to the United States Small Business Administration small businesses account for 55% of all jobs in the US.

As if that were not enough of a reason to support small businesses, study after study has shown that revenues generated by small businesses tend to stay in the local community in the form of jobs and wages that then flow back into the economy in the form of purchasing power. The amount in question is not small. One study from Utah saw on average only 14% of revenues at big box stores such as Walmart or Target remain in the community compared to 52% of revenues from small, local businesses. Even greater disparity exists in the restaurant industry, where local restaurants recirculated 79% of their revenues locally compared to 30% of chain eateries. So when you are out shopping and you stop to eat at that mom and pop diner, almost 80% of what you spend gets re-spent locally.

There are three main ways that money spent locally flows back into the local economy. We call this the Multiplier Effect. The first type is what is called a Direct Impact. A Direct Impact is when a business makes a purchase from another local business in the form of inventory, supplies, services, employee wages, or utilities. The second type of impact is an Indirect Impact. This is when the dollars that local business spent at another local business get spent AGAIN in the local economy. The third type of multiplier is called Induced Impact. This is when those local people who were paid by the local business spend their money in the local economy.

SBA Shop SmallUnderstanding this flow is key to understanding why it is so imperative to shop locally and support small businesses this holiday season. Money has to flow through the economy to keep a community strong, and it flows best when it is spent locally. So this holiday season, I hope you join me in supporting your local Main Street!

(Submitted by Laura Fuller, County Extension Educator, Noble County & Buckeye Hills EERA)

Financial Literacy and Entrepreneurship: Helping high school seniors consider a future in small business

With only a few weeks of school to go before graduation, Van Wert City School seniors were offered yet another option to consider for their future:  becoming an entrepreneur and owning their own business.

Members of the Van Wert City Schools senior class are required to take Senior Government which includes a segment focused on Financial Literacy within the overall curriculum. The Financial Literacy portion of the class offers several aspects of personal finance, from car loans to credit cards. Missing in the program was an opportunity that involved owning your own business. Last year, Ohio State University Extension and the Wright State Lake Campus Business Enterprise collaborated with school administrators to teach students about starting their own business.

Van Wert HS EntrepreneurshipWith the program finishing its second year, Senior Government teacher, Bob Priest, was again impressed with the students’ interest and excitement about owning their own business. “Van Wert High School government students had the good fortune of participating with two universities at the local level for a three-day introduction to entrepreneurship, business planning and financing,” stated Priest. “I was impressed with the ideas the students created for the betterment of Van Wert, and then they had to put the numbers to their business plan. That was the difficult part. I think students now have a better understanding of how expensive and time consuming it can be to own a business.”

The program involved personal entrepreneurship assessments, identifying local market opportunities, and creating a business plan. In addition to a visit from local entrepreneur and business owner of Firehouse Pizza in Middle Point, the students learned about start-up expenses, on-going operating costs, pricing and break-even analysis.

Post-program evaluation results indicated that 98% of the students felt the program was suitable for graduating seniors and 95% recommended Van Wert High School continue to offer the program. Surprisingly, 48% of the students responded they would be interested in owning their own business in the future. “Because of this, I may now think about starting my own business while I may not have wanted to before,” remarked one of the participating students.

(Submitted by Cindy Leis, County Extension Educator, Van Wert County & Maumee Valley EERA and Van Wert City Economic Development Director)

Helping find employee/employer ‘fit’ via OhioMeansJobs

Whether you are looking for gainful employment and career advancement or you are seeking highly qualified and motivated associates for your business, finding the right fit is key. The new OhioMeansJobs website is designed to assist employers in broadening their choices and gaining access to the large pool of data of potential employees from the State of Ohio.

OSU Extension, in partnership with the Fayette County Economic Development Department, recently held a training session focused on the features of the new OhioMeansJobs website designed to assist them in attracting, hiring, retaining and advancing their workforce needs. The site also enables employers to post jobs, search resumés and take advantage of federal, state and local employment programs. The training was open to all businesses including the county’s eight major employers. Participating companies included:

  • TFO Tech, Inc.OhioMeansJobs Website Employer Training - Post
  • Stage Stores Distribution Center
  • Domtar
  • Sugar Creek Packing
  • Mars Pet Care
  • Wal-Mart Super Stores
  • YUSA Corporation
  • McKesson Drug Company

The Fayette County Chamber of Commerce, Fayette County Jobs and Family Services, Southern State Community College and the OhioMeansJobs local office provided support for the training.

(Submitted by Godwin Apaliyah, Extension Educator, Fayette County & Miami Valley EERA)

Growing the economy with entrepreneurial talent

Entrepreneur

What community doesn’t want to learn about identifying and growing its entrepreneurs? Communities of all sizes, large and small, are looking for ways to bolster economic growth. While research shows about 60 to 80 percent of new jobs created annually are the result of existing business expansion, new business start-ups create about 40 percent of new jobs annually (about 6.5 jobs per new business on average) (Badal, 2010).

How can we partner with the chambers of commerce, economic development offices and youth leadership programs to cultivate interest in growing new businesses in these communities?

We recently had the opportunity to tour the world headquarters of Gallup (the longtime ‘polling’ organization that has more recently gotten into the business of ‘StrengthsFinder’ among other things). In addition to hearing an interesting overview of the company’s history, we also learned of the newly unveiled ‘Entrepreneurship StrengthsFinder’ from Gallup representatives. We left there convinced that this tool provides us opportunities to stimulate interest in exercising entrepreneurial talents and abilities with audiences of all ages and walks of life.

To learn more about this new tool for identifying entrepreneurial talent, click here.

(Submitted by Greg Davis, Professor and Assistant Director, OSU Extension – Community Development, and Rose Fisher Merkowitz, Associate Professor and Extension Educator, Miami Valley EERA)

Working together to promote Community, Local & Regional Food Systems

Fresh Lettuce!

(Photo credit: eXtension.org post 7/2/2014)

What could be better than eating fresh fruits and vegetables out of your garden this time of year?  Well, not much other than having access to such garden fresh foods year round. If you are interested in such things, there is a new resource available at eXtension called the Community, Local & Regional Food Systems Community of Practice or ‘CoP’.  This CoP is designed to provide information and networking opportunities for educators, community-based practitioners, policy makers, farmers/growers, families, and really anyone involved in building equitable, health-promoting, resilient, and economically balanced food systems.

Anyone can share, learn, and contribute in any number of ways. For more information, click here.

(Submitted by: Brian Raison, Assistant Professor and County Extension Educator, Miami County and Top of Ohio EERA / Co-leader, eXtension Community, Local & Regional Food Systems Community of Practice.)

High School Seniors explore another Path to their Futures

Van Wert HS Starting Right for the Student Workshop 2014 - #2Where have nearly two of every three new jobs come from since 1995? That would be small businesses, according to the SBA and U.S. Census. How can we stimulate entrepreneurial interest? How about a special workshop for getting high school seniors interested in and thinking about their futures as entrepreneurs and business owners? Such an effort was recently conducted with Van Wert High School seniors, 53 percent of which indicated, at the program’s conclusion, an interest in owning their own business sometime in the future.

For more information about the program and to read about the pilot project at Van Wert City Schools, click here.

(Submitted by Cindy Leis, County Extension Educator and Van Wert Economic Development Director)