Assisting and mentoring business start ups
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Assisting and mentoring business start ups

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A New Model to Support Emerging Businesses. Minnesota Chamber Grow Minnesota Program and local chamber partners offer business assistance to help businesses stay and grow in this state.

A New Model to Support Emerging Businesses. Minnesota Chamber Grow Minnesota Program and local chamber partners offer business assistance to help businesses stay and grow in this state.

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Assisting and mentoring business start ups Assisting and mentoring business start ups Presentation Transcript

  • How Many Stars Are in the Night Sky? How Many New Businesses Are There?
  • It Depends Who Is Doing the Counting and Defining.
  • This is What The Federal Government Sees View slide
  • A Business Doesn’t Exist Until there Is an Employee With the Naked Eye, You Can Only See 2,500 Stars View slide
  • The SBA Defines a Small Business as Having 500 or Fewer Employees
  • Here is What Venture Capitalists and Many Public Policy Experts See.
  • …a Small Subset of the Universe.
  • 88 Constellations. On Scale, about 37 Venture Capital Deals Per Year
  • This is What the State Sees.
  • There were 58,260 New Business Filings In 2013.
  • Compare State Fed
  • Why Does It Matter?
  • Why Does It Matter? Bad information leads to bad policy. We need to have consistent definitions and consistent methodology to make informed policy . It is not helpful when we have conflicting reports; one labeling Minnesota a failure in creating new businesses, and one saying we are breaking records for creating new businesses.
  • Conflicting Schools of Thought 1) Anyone engaging in business activities -- whether full-time or part-time, at the industrial park or the garage, in addition to another job or not -- should be counted as a business. 2) The census bureau's non-employer statistics over other sources -- the census only counts people who reported self-employment (Schedule C) income of more than $1,000, possibly weeding out some side-workers who pay self-employment income tax but do not operate independent businesses.
  • Adopt the Broader Definition of Business “The problem with ambiguous definitions of what counts as a small business is that they may make it more difficult for policymakers to really understand and address the unique problems that businesses of different sizes are confronted with.” -- Tracy Clark, associate director, W. P. Carey School's Spirit of Enterprise Center, Arizona State University
  • A New Formula Is Needed
  • Old Formula B (Business) = Oy (Owner) + Ex (Employees)
  • What Do Policy Makers Really Want? Jobs, Jobs, Jobs!
  • Employment = Jobs = Making a Living E E E E E E!
  • A Traditional View of a Business B = O + (E + E + E + E + E + E + E + E)
  • After Layoffs Original Business - B = O + (E + E ) Shedding 6 Employees
  • After Layoffs B = O B = O B = O B = O B = O B = O The Former Employees “E” Start Their Own Businesses and Become Owners “O”
  • Self-Employment Trend In March 2011, the Number of New Self Employed Who Had Been Unemployed in the Prior Year Was 900,000, or 5.5 Percent of All Self Employed. -- SBA Office of Advocacy Report
  • What Next?
  • Who Helps New Businesses Now • SBA – SCORE Volunteer Mentor Program. • SBA – DEED – Small Business Development Centers • Education Institutions Offering Entrepreneurship Programs Such as Dakota County Technical College. • Workforce Training Centers.
  • Venture Capital? Most VCs like to invest in ventures after the potential has been proven and the risk reduced. In the first quarter of 2012, only 3 percent of VC funding went to start-ups. Typically Averages $243 Million Invested in 37 Deals Per Year.
  • $24 Million State Job Creation Fund? To qualify, a business must: • Invest at least $500,000 in real property improvements. • Create 10 new full time permanent positions within two years. • Have other location options outside of Minnesota. • Cause no undue harm to Minnesota business competitors.
  • A New Model to Support Emerging Businesses
  • A New Model to Support Emerging Businesses • Emulate the Legal Profession’s Pro Bono Initiative • Harness Business Professionals Already Committed to Service • Acknowledge that Sole Proprietors, Freelancers, Consultants, etc., Are Actually Businesses. • Drop the “It’s not a real business” attitude.
  • Start Collecting Data When a business registers ask: • SIC Code? • Plans to Hire? • Full-Time or Part-Time Venture? • Full income or supplemental? • Interested in Mentorship? • Need Assistance of Business Professional?
  • What Can Chambers Do? • Identify Members that Are Willing to Mentor. • Welcome Startups to All Events. • Offer 1 Year Membership at No Cost. • Offer Networking Training. • Help Members Develop Pricing For Startups. • Make Chambers The Place Where Entrepreneurs / New Businesses Can Turn to for Help. • Help Lobby the Legislature to Appropriately Fund Current Programs that Need Help In Reaching Their Client Base.
  • New Business Survival Rates • Year One – 85% • Year Two – 70% • Year Three – 62% • Year Four – 55% • Year Five – 50% • Year 10 – 30%
  • Taking Care of Business