This document outlines a 10-step methodology for implementing wealth creation value chains in rural communities. The steps include: 1) Mapping out an existing or potential value chain, 2) Identifying gaps, 3) Determining business opportunities to fill gaps, 4) Conducting feasibility studies, 5) Developing business models, 6) Creating financial models, 7) Meeting with potential investors, 8) Identifying entrepreneurs, 9) Capitalizing the entrepreneurs, 10) Launching, celebrating and supporting the new businesses. The overall goal is to create new entrepreneurial opportunities through an integrated approach that develops an entire local value chain.

1. Implementing Wealth Creation Value Chains:
A Step-by-Step Methodology to Create New Entrepreneurial
Opportunities in Rural Communities
June 25, 2013

2.  Work in 64 counties of Arkansas / Mississippi Delta
o Poverty > 25%
o Unemployment > 10%
o Outmigration
 Wealth Creation Value Chain Coordinator since 2010
o Exploration March 2010 to July 2011
o Construction July 2011 to December 2012
o Implementation at Community Level January 2013 to present
 Since 1998, worked with over 4000 entrepreneurs to start, grow
and rebuild their businesses
 In 2011, became Community Development Financial Institution
= microloans for working capital
 Today: 13 full time professionals across 5 rural offices
Background on

3.  Creating entrepreneurial opportunities is only one of
many objectives in developing W.C.V.C.
 Impact of New Businesses on Wealth
 Built – purchasing eye-sores and repurposing them
 Individual – building new skills
 Financial
o Encouraging local investors to invest in new businesses
o Profits likely to be invested in community and value chain
Step 1: Map out Value Chain
Creating Competitive Entrepreneurial Opportunities

4. 4
Disadvantaged
Farmers grow seed
Restaurants
generate used oil
Oil Collection
Biz
Researchers test
seed
Seed
collection, sto
rage, cleanin
g
Micro-
Refinery
Two-Year College
Training Program
Meal
Collection /
Processing
Glycerin
Collection /
Refining
MidSouth ASTM
Testing
Fuel
Aggregator
Non-Commercial
Use
FedEx
Biodiesel
Stations
Farmers
On /Off
Road
Livestock
Farmers
Cosmetic
Mfgs
Green
Financing
Network
Bioenergy Value Chain
Manufacturer
of Micro-
Refinery
©alt.Consulting 2011
www.altconsulting.org

5. Demand for biofuel
Local municipalities, school districts, farmers, truckers
Regional companies - Valero, FedEx
Local
and
State
Policy
Support
MSCC Mini Refinery Micro Refinery
Spring-
board
Diesel
Mfg
Dist
Gir
Ener
gy
Mfg
Angel
Investor
Net
work
Loan
Funds
Waste Vegetable Oil
Collection Businesses
Source of WVO:
restaurants,
convenience stores,
schools,
hospitals,prisons,ca
sinos, etc.
Community
Mktg
Strategy
Ed/promo
materials
Community
Recycling
Programs
Progressive
Community
Leadership
Trans-
porta-
tion
Camelina Seed
Processing Company
Growers of
Camelina:
Minority, Non-
Minority
Farmers
Camelina
research
ASU, PCC
UA
Camelina
Agronomic
Service
Business
USDA
Support
Programs:
NAP, Cover
Crops, Crop
Insurance
ADTEC
RET
Train
ing
Fuel
Blend
er
Distri
butor
Animal Feed
Composting
Cosmetic mfg
By
Prod
uct
Meal
By
Prod
uct
Gly
ce
rol
AGEN Opportunities for Entrepreneurs

6. Step 2: Identifying Gaps in the Value Chain
 Use meeting with entire value chain
o Creates sense of ownership
o Allows each member to see whole picture
o Creates problem solving relationship
 Be prepared to revise and revise again
 Be intentional about principles when
identifying gaps
o Agronomic services business
o Means of engaging minority and low resource
farmers

7.  Key Questions:
o Can someone make a profit
by performing this service
or making this product?
o Should this gap be filled by
a non-profit value chain
partner and need to be
subsidized? By whom?
Step 3: Determine Link Between Gaps and Business
Opportunities

8. Step 4: Feasibility Studies
 Start with business that will be selling directly to
consumer
 Determine market size and competitive pricing
 Determine costs of production or service
 Determine equipment needs and costs
 Risk Analysis
o Market risks
o Financial risks
o Operational risks
o Human resources risks
o Regulatory risks
 Develop clear mitigation strategies for each risk

9.  One page
 Based on information and data gathered through
feasibility study process
 How will this business make money?
 Discuss steps from inputs to delivering to consumer
 Stage business model to ensure early success
 Keep in Mind: Businesses are interrelated. All should
be launched at same time. Reality: Who is first?
 Example: Seed Crushing Operation. Diversify inputs and
services from the start.
Step 5: Business Model

10.  Integrated model:
o Profit and Loss Projections
o Balance Sheet Projections
o Cashflow Projections
 Determine capital needs
o Create asset listing and anticipated costs
o Use cashflow model to determine working capital needs
throughout first 3 years
o Develop Sources and Uses Table
Step 6: Financial Model

11.  Ask community leaders and bankers to identify
potential investors and make introductions
 Secure initial interest /commitment from investors
 Identify potential entrepreneurs through investors
 Encourage investors to raise additional questions to
test feasibility of ventures
 Triple Bottom Line: financial, social, environmental =
impact YOUR community
 Do not overpromise!
 Don’t force investors into your intended structure
Step 7: Meeting with Potential Investors

12.  Beginning with first meeting in community, ask for
entrepreneurs. Start creating the “buzz”
 Ask investors to identify entrepreneurs. They would
rather invest in their “friends”
 Publish stories in the local paper about opportunities
 Hold community meeting to discuss entrepreneurial
opportunities and results of feasibility studies
 Be intentional and creative about including interested
entrepreneurs from all parts of the community
 Too many interested entrepreneurs?
Step 8: Identify Entrepreneurs

13.  During value chain construction, engage financing
partners and gauge interest
 Equity = patient capital
o Friends and family
o Investment holding company to secure out of state
investors
o Angel investor network
 Bank finance = interest only for 6 months
 Seek out alternative lenders (CDFIs)
 Exit Strategy: Create strategy that will allow
entrepreneurs to buy out investors after 3 to 5 years
Step 9: Capitalization of Entrepreneurs

14.  Soft launch = ensure everything is working according
to plan
 Celebrate: Engage the press and community
 Support: Provide intensive technical assistance
throughout launch phase
 Collect data and document so business can be
replicated in other communities
 Revise feasibility study, business model and financial
model to reflect reality
Step 10: Launch, Celebrate and Support

15.  You are only laying the ground work for the
private sector
 Be aware when you need to get out of the way
 Continue to be the keeper of the values!
The Pitfall: Playing Value Chain “God”

16. Thank you!