Agenda - Economic Development Authority - 08/02/2012

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EcoNomIC[i.AR )1,,N1NG Edward Lowe Foundation development orgaruaadons that serve startups and small businesses by providing assistance with operations and manage:xnen issi:rr such as business -plan rev n, (Hsi) -flow analysis annd sucicssinn planning. In contrast, economic gardening deals with gri wtln- oriented companies and strategic issues like penetrating new markets, refining business models, developing CCArns and embracing new leadership roles. Economic gardening pmkides information and decision -making assistance to companies that are txansitioning from small to large, with services customized to meet the jlrst-in-time needs of this aildience• Corninunities currently nurture their economies through recruitment, wogkfcrce development and small- business devcicpinent. "But there is a fourth dimension we need to add," Lange says. "Gro uth-cotnpa,.ry development is the missing piece, which is why the Edward Lowe Foundation is an advocate for economic gardening" Small Business Development Business Attraction & Recruitment r Second -stage benefits Soule of the greatest ratans of economic gardening coine from working with second -stage entrepreneurs — companies that have advanced heyonct the startup stage with the intent and potential for additional growth. (Second -stagers typically have 10 to 99 employees and generate shoat Si million to 350 million in anrtual revenue, depending on their industry.) Many people Associate second stage with gazelles (companies with extremely high growth). Although gazelles piss through second stage, which snakes it €t good ,lace to find therm, they're only part of the story. Second stage also includes- 1) companies with potential for high growth and 2) companies generating steady gtcwth that may be less dramatic than gnrcllcs but remains uaiprc: s siee. This growth orientation is a critical *ru ti distinction chat Separates growth companies from other types of small businesses. For example, some individuals may be self-employed because they life being their own boss, but job creation isn't part of their game plan. Then there are small businesses that provide jobs in a community, but their growth is somewhat restricted by the local trading area they serve. In contrast, second -stage entrepreneurs are significant job creators because of their focus on growth. And because they often have mitt rrnal nr giant markets, they bring outside dolla-s into the community, "It's time we treat growth -oriented entrepreneurs differently than small businesses giving them their own place in the overall scheme of economic diaeIopmcnt," says Lange. ""floe foundation can play an important role by helping community organizations collaborate more effectively to serve this audience." According to Doug Tatum, author of -No Man's Land," Entrepreneurs face bur key challenges as their companies transition from small to big: • Market adjustments` • Outgrowving early management teams and their sole as founders, 146.14444.4, i * wilil.d GrO Wt f) De Ve fPafl eat , * Soling business models to handle growth. ■ Understanding capital requirements. "Its hard for entrepreneurs to resolve these issues on their owti — or even identify them accurately," says Dino Signore, manager of program development at the Edward Lowe Foundation. "For one thing, moving E_oin Stage 1 to Stage 2 brings on an entirely new set of challenges. Entrepreneurs face more. ICspcnsibilities, and evezything becomes magnified. 1Txeir core coriapeteticies become stronger, but so do their weaknesses." Making things even more difficult, changes in markets, management, business model and moriev arc interrelated, Signore continues, 'Being out of sync in one area can cause you to be out of sync in others." These conditions manifest themselves in a saariety of whys. Some common symptoms: not being able to fulfill commitments to ciaoiners; duality problenns become more