Enterprise Facilitation®:  Building Local Economies One Business at a Time

 

Prepared by Ruth St. Amour, Development Specialis

Alaska Department of Commerce, Community & Economic Development

Division of Community Advocacy

Based on visits to Enterprise Facilitation projects in:

Fannin County, Texas

Baker City, Oregon

Luna County, New Mexico

Great Bend, Pawnee Rock, & Kinsley, Kansas

March & April 2005

 Kinsley, Kansas, population 1,658, is home to a growing accounting and tax practice that has just hired a second employee.  In Halfway, Oregon, population 337, a funeral home has just opened a second location in a nearby, larger community.  A renowned seamstress with a talent for custom bridal gowns has opened her own shop in downtown Great Bend, Kansas

.  What these businesses have in common is that they are clients of their local Enterprise Facilitation (EF) projects.

 

 

 

 

The Prairie Enterprise Project serves five counties in central Kansas, with 56,310 people spread out over communities ranging in size from 136 people in Lorraine to 15,345 in the regional hub of Great Bend.  In less than two years, Enterprise Facilitator Linda McCowan has met with 200 clients and assisted with the formation of 23 new businesses. 

 

The Baker Enterprise Growth Initiative serves Baker County, Oregon, population 16,741.  In just under five years, Enterprise Facilitator Ruth Townsend has met with 774 clients and assisted with the formation of 56 new businesses ranging from a coffee roaster to a floral shop to a ranch selling organic lamb and beef.  Even more impressive than the rate of business start-ups is the rate of business closures:  from July 2000 to March 2004, only 7% of the project’s start-up clients closed their businesses.

 

As more fully explained on the website of the Sirolli Institute, www.sirolli.com, “Enterprise Facilitators work with a community-based board to provide free, confidential, business management and networking advice to aspiring entrepreneurs and existing businesses.”  An Enterprise Facilitation project employs an Enterprise Facilitator to serve a locally-defined area that includes at least 5,000 and typically 15,000 – 20,000 residents.

 

Outreach

 

In general the process is initiated by the Sirolli Institute founder, Ernesto Sirolli, speaking at a conference, Chamber of Commerce meeting, or other gathering of local leaders and economic development professionals.  His message, that “the future of every community lies in capturing the passion, imagination, and resources of its people,” is embraced by a local champion.  On average, anywhere from nine to fourteen months later an Enterprise Facilitation project gets underway. 

 

 When asked why they got involved in their local project, board members talk about wanting to grow their local economies from the inside out, of a desire to preserve and enhance the small-town qualities they treasure, and of supporting economic growth that is locally-directed.

According to Ernesto Sirolli, the local champion is typically someone who “gets” the nurturing aspect of Enterprise Facilitation and is not seeking to make a name for themselves with a big, splashy project.  Enterprise Facilitation requires a fundamental belief in the intelligence and creativity of ordinary people - not just economic development professionals or elected leaders.

Sirolli believes that the quality of the initial local champion sets the stage for the success of a project.  One approach that has worked is for a reputable agency to present Enterprise Facilitation to local leaders and invite proposals for funding.  New Mexico’s Economic Development Department and the McCune Foundation partnered to provide matching funds for three counties to enter into thirty-month contracts with the Sirolli Institute to start EF projects.  Oregon’s Economic and Community Development Department has contracted for an outreach program to be conducted by a team that includes a successful Oregon Enterprise Facilitator, to develop new Enterprise Facilitation projects. 

To truly test Enterprise Facilitation, and determine its viability in Alaska, the Sirolli Institute recommends starting two or three projects at the same time.  Any one project may get off to a slow start, have trouble finding the right Facilitator, or run into any number of possible glitches.  The proof lies in the dozens of projects, in Canada and Australia as well as in California and Texas and South Dakota, in communities of all sizes and characteristics, that have worked over the years. 

 

 Community Assets One of the guiding philosophies of Enterprise Facilitation is, “if people do not wish to be helped, leave them alone.”  Accordingly, Enterprise Facilitation projects are initiated where local people want them.  Government agencies may provide funding for the start-up costs, but the Sirolli Institute looks for evidence of commitment from local people before working with a new project.  In addition to financial contributions to the project, commitment is demonstrated by the willingness of local people to work together and accept responsibility for the project.

 

 Enterprise Facilitation requires the willingness of local people to embrace private enterprise.  The underlying assumption is that profitable, locally-owned businesses are good for a community.  A certain amount of “business-mindedness” is needed on the part of local people to believe that the business success of others will benefit them.  That benefit may be in the form of new goods and services being available in the community, or that someone else’s business might create opportunities for a business of one’s own. Local leaders should consider how well the cultural values of the free enterprise system fit the attitudes and values of the community or region.

Enterprise Facilitation requires a willingness by local people to break the cycle of dependency on government programs.  Rather than waiting for a local economy to be created (or saved) by using tax incentives to lure large-scale employers, or by government programs creating subsidized jobs, Enterprise Facilitation is about local people nurturing the intelligence and creativity of their neighbors in pursuit of entrepreneurial goals.

According to Sirolli, a community or region generally needs to go through some pain before embracing Enterprise Facilitation.  Interest in EF is generally preceded by economic hardship, and experience with the limitations of typical large-scale economic development projects.  While EF does not take the place of traditional economic development projects – an economic base is still required – local leadership must have an interest in an alternative to an employer from “outside” that has no roots in or loyalty to the community.

Something that is not required is an extensive history of successful business start-ups.  According to the Sirolli Institute’s Ned Webb, in the five Kansas counties served by one of the EF projects, many communities had not had a business start-up in the five years prior to EF.  In determining whether the geographic area served by a project is home to adequate entrepreneurial spirit, Ernesto Sirolli advises, “trust people’s intelligence and creativity.”

A key ingredient of EF is the local board of directors.  The board is comprised of 25 to 50 people and meets once a month to help the Enterprise Facilitator help the clients.   The board members in attendance brainstorm ideas and resources to help clients start or nurture their businesses.  The board members sign a pledge of confidentiality at the start of meeting.  Board members can be anyone with a willingness to help their neighbors with their businesses.  They may be retired teachers, city council members, local business owners, or homemakers, but they all share a willingness to support the development of local businesses.

Leadership is needed to develop an Enterprise Facilitation project.  A local champion must believe in the program enough to seek funding and organize a local board of directors.  Leadership is needed to keep a project going year after year, and to be there to help clients when they choose to start businesses and to support local businesses to grow and prosper over time. 

Based on my visit to communities served by the Prairie Enterprise Project in Kansas, some of which are small, remote, and economically depressed, I observed that there are certain community assets not needed for the success of an EF project.  That project is serving clients in communities that lack business infrastructure – no bank, no insurance agency, no copy shop, no Small Business Development Center or Department of Labor office.  Access to such services might require a drive of many hours on back roads, in seasonally hazardous conditions.  In one community, the school had closed because of low enrollment.  In short, not much different from many small communities in Alaska.  The critical factor for success was the willingness of local people to nurture the business ambitions of their neighbors.

 

Local Leadership Initially, local leadership is needed to organize a project – recruit a board of directors, secure funding for at least the thirty-month start-up phase, select an Enterprise Facilitator, and participate in training sessions.

 

Once the Facilitator is in place, each board member commits to introducing the Facilitator to at least ten people.  The ten people may be friends, neighbors, co-workers, or family members.  The purpose of the introductions is to create a network of people who are aware of the Facilitator, and serves as a supplement to other forms of local outreach.  The board member’s credibility in the community lends credibility to the Facilitator and the program.  Using the guiding philosophy of “if people do not wish to be helped, leave them alone,” the Facilitator does not seek clients.  Instead, clients seek the Facilitator.

Board members also commit to participating in monthly board meetings.  The first hour and a half of the board meeting is devoted to brainstorming with the Facilitator.  After all board members present have signed a pledge of confidentiality, the Facilitator will present for discussion the needs or concerns of particular clients.  The board members brainstorm ideas and resources for the Facilitator to share with the client.  For example, a client may be in need of a graphic artist to design a logo or may be looking for someone who can help navigate the process of exporting food products.  The board members themselves need not have the required expertise, but out of a group of 25 to 50 people, there is bound to be someone “who knows someone who knows someone. . . “  The final half hour of each board meeting is devoted to housekeeping items.

From the beginning, the board is advised to form a fund-raising committee.  Generally, a project is started when fully funded for the thirty-month training and support services of the Sirolli Institute as well as the cost of the Facilitator’s salary and expenses.  Thirty months is an adequate amount of lead time for the board to develop on-going sources of funding to support the operation of the project.  This may involve writing grant applications, advocating for funding from local governments, enlisting the support of local banks, or soliciting donations from local residents.

Government funding sources have included state legislative appropriations, U.S. Department of Commerce – Economic Development Administration, U.S.D.A. Rural Development, and state economic development and workforce development programs.

Choosing a Facilitator The Facilitator is the public face of an Enterprise Facilitation program and is the person working directly with clients.  The effectiveness of the program is heavily dependent on the Facilitator, and care must be taken in selecting the right person.

 

While small business experience, particularly as a business owner, is clearly valuable for Facilitators, other qualities are equally important.  In conducting training for a new board, Sirolli Institute’s Ned Webb emphasized approachability and good listening skills as essential qualities for a Facilitator.  The three openings for Facilitators listed on the Sirolli Institute’s website as of this writing all include the following qualification: “Applicants must, above all, have a passion for helping others succeed and be able to work comfortably with people from diverse backgrounds.”

The Sirolli Institute offers assistance with recruiting candidates and selecting Facilitators, but the responsibility for the selection rests with the local board of directors.  Facilitators are employed by the local project, not by the Sirolli Institute.

Facilitators may come from within, or outside of, the region served by the project.  While a local person is able to begin the job with prior knowledge of the region to be served and may get a faster start in serving clients, an outside candidate brings no “baggage” to the role of Facilitator – the person has neither friends nor enemies within the region.  Among existing EF projects, roughly half have hired Facilitators from outside the communities served by the project.

The initial contract with the Sirolli Institute includes on-site training for the Facilitator.  Board members also participate in the training.  Ongoing support for the Facilitator is provided by Sirolli Institute staff, as well as by other Facilitators through participation in master classes.

 Success Stories

Spend a day with an Enterprise Facilitator and you’ll meet people who are pursuing their dreams.  The pride of ownership and sense of accomplishment is obvious in the way the business owners tell their stories and tend to the details of their business.  At least until December 31, 2005, I will not forget Joe’s Printing of Ellsworth, Kansas, and their slogan “You don’t have to be a Fat Cat to afford Quality Printing.”  The owner of Joe’s Printing insisted that I take one of their promotional calendars just because she wanted to know that one of their products had gone all the way to Alaska.