Western Colorado Business Development Corporation Grand Junction, Colorado
Western Colorado Business Development Corporation Grand Junction,
Colorado
The Western Colorado Business Development Corporation (WCBDC) is a place for tenants to operate businesses. It is a source for small business loans. It provides consultation, training and classes for incubator tenants and other small businesses. It offers access to financial, legal, marketing and management expertise. This wide range of business support services under one roof is a unique feature of WCBDC, and the organization has received national recognition for its excellence.
COMMUNITY ISSUES:
What factors in the community have produced a need for WCBDC?
What kept those needs from being met by the private sector?
The crash of the oil business in Western Colorado in the early 1980s, followed by the pullout of a major oil corporation, created a crisis that led to the formation of WCBDC in 1986. There was very little diversity of employment in the region, and an estimated 7,000 jobs were directly or indirectly affected. Neither private business nor the public sector was able to provide the jobs or training needed in the wake of the oil bust.
The incubator was initially established to provide space and support for small businesses that could provide jobs and diversify the economy in Grand Junction. The scope has gradually been expanded as needs for services have been identified and consolidation of existing services has taken place. The center's service area now includes all of Mesa County and the Grand River valley.
By participating in the revolving loan fund, lenders are able to help make loans to small businesses that, because of their size and the level of counseling and support that small new business owners often need, they could not make on their own. While attorneys and accountants can provide pro bono work for clients of WCBDC, they too would find it too time consuming and difficult to screen applicants and structure such assistance on their own. Successful entrepreneurs serve as mentors for new businesses, and WCBDC creates the link through which these relationships can be formed.
A cautious approach toward using government funds for business intervention kept the pace of growth moderate. Leaders who were initially skeptical about WCBDC have become supportive since a strong track record has been established and the organization has demonstrated how resources can be leveraged to meet needs in the community.
PARTNERS AND RESOURCES:
Who was the visionary?
A group of community leaders initiated plans for developing the incubator, with leadership from the county. Now, executive director Thea Chase carries the banner of that vision, with support from the WCBDC Board of Directors, other community volunteers, and staff of the development corporation and other cooperating agencies.
Chase had been involved in small business most of her life, beginning with work in her family's florist business. She accepted the position at WCBDC after completing a masterÕs degree in business administration at the University of Colorado in Denver. When she arrived in 1993, there were only five tenants in the WCBDC building, there was no lease, and she discovered--once a budget was developed--that the organization was operating at a deficit.
"Initially, we focused on survival," she said. With support and growing confidence from the community, the building was full within a year, and services were redesigned to meet customer needs. "With a mission to help small businesses grow and be successful," Chase said, "we feel it's important to practice what we preach. We work hard to run efficiently and maintain a customer focus."
Along with maintaining clarity about the vision and mission of WCBDC, Chase coordinates the provision of services and explores potential new projects and services at WCBDC. She hires staff who are responsible for activities in the different programs under the WCBDC roof, and when other expertise is needed, she contracts with consultants. Who are the resource partners? What resources does each bring to the project?
(photo) Grand Junction's Main Street features sculpture by local artists.
Private sector:
Bankers, attorneys, accountants and business owners serve on the board of directors, provide pro bono consultation and assistance for potential and new business owners, and provide financial support for WCBDC.
Public sector:
The cities of Grand Junction, Fruita and Palisade, Mesa County, the Small Business Administration, and the U.S. Economic Development Administration provide funding and technical assistance.
Were there potential partners who did not participate? If so, why?
Mesa College gave up support of the SBDC in 1992 and the Research Bureau in 1994 because they felt these activities fit better with the business development goals of WCBDC than with the educational mission of the college. However, student interns and professors actively participate in training and on the WCBDC Board of Directors.
What is the cost of the center and what percentage is covered by each partner?
1997 Budgeted Expenses $388,913
1997 Projected Revenues $389,087
1997 WCBDC budget figures are based on projections from 1996 experience and 1997 commitments. Program income covered 70 percent of expenses in 1996, and the 1997 goal is to increase that amount to 72 percent.
HOW IT'S DONE:
What issues or problems have been encountered and how have they been overcome?
In 1992, the county completed construction of a new jail next door to the incubator and acquired the property and buildings around it for use as a justice center. The plan included demolition of the incubator building, and when the WCBDC Board of Directors was not able to find suitable other space, new tenants were not recruited for the incubator. County elections resulted in new members on the commission with new ideas about priorities, and the immediate plans for demolition of the WCBDC building changed. In 1993, the board and staff restarted the WCBDC program.
Also in 1993, WCBDC began sponsoring the Small Business Development Center. "Not being a traditional host such as a community college presented challenges for WCBDCÕs relationship with the state," Chase said. "The synergy of the model was new and hard to defend." Since then, however, the SBDC has won statewide and national recognition for its effectiveness in leveraging community resources. It has the lowest cost per client for business consulting in Colorado.
A market for space and equipment to be used as a kitchen incubator was identified, to be used by orchard growers to process fruit that is too ripe to ship, by caterers, and by small manufacturers of food products such as jams and jellies. Equipment was donated for a kitchen incubator, but it was not the type of equipment needed, so negotiations are under way to trade it. Space that meets food preparation regulatory standards is not available in WCBDC's facility, so agreements are being discussed to share space with a group that already has kitchen facilities, such as a lodge or church.
GOALS:
When talking about goals for the future, Chase said she wants to "keep doing what we've been doing, only better." Goals for 1997 have been set by the board and staff for WCBDC and for each of the programs under its umbrella.
For the Western Colorado Business Development Corporation, 1997 goals include using technology to enhance services and create efficiencies, and increasing awareness of WCBDC services.
Goals of the Revolving Loan Fund include expanding the portfolio of loans 25 percent by loaning $400,000 to 18 business, helping to create or retain 35 jobs, leveraging an additional $800,000 in private funds, and maintaining a delinquency rate below 12 percent. Other goals are to explore the economic feasibility of new loan products, and to consider how to work with lenders to "graduate" borrowers from the Revolving Loan Fund to a bank.
The Research Bureau's 1997 goals include increasing revenues from publications and fees, increasing volunteer involvement, and developing a computer laboratory with work stations that will offer word processing, spreadsheets, data base applications, accounting software, Internet access, and electronic data resources such as telephone books on compact disc.
The Small Business Development Center goals include developing a strategy to track the effectiveness of the SBDC program.
The Incubator Center plans to formalize admittance criteria and establish technical assistance contracts with clients. Establishing a kitchen incubator, where costs of equipment and of meeting strict regulatory requirements for food processing facilities can be shared, will give small business owners access to resources they could not afford on their own.
With the knowledge gained from experience, will WCBDC operate differently in the future?
Thea Chase wants to continue to forge strong partnerships within WCBDC and in the community, and to continue to respond to the needs of the small business community. She believes WCBDC programs are on track and working well at this point. The economy in Grand Junction is healthy and diversified, and WCBDC is recognized for its role in helping to make that happen. Tenancy in the incubator is stable and close to capacity, training classes are full, and 80 percent of the graduates of the incubator remain in business.
When describing new activities, such as development of the kitchen incubator, Chase often said, "We'll try this and see what happens." She would not change that approach to getting things done.
"One of the greatest pieces of economic wisdom
is to know what you do not know."
-- John Kenneth Galbraith