CSU's Levin College validates what every NEO entrepreneur knows...

Submitted by Norm Roulet on Thu, 07/21/2005 - 15:44.

A resounding theme among entrepreneurs in NEO has for a long time been "I don't get respect". Now, a new study by Stuart Mendel, Assistant Dean of the Maxine Goodman Levin College of Urban Affairs at Cleveland State University and Co-director of the college's Center for Non-Profit Policy and Practice, validates that "Cleveland could foster small-business growth as a way to erase the "Poorest Big City in America" distinction it earned last year".

The study is called "An Assessment of Business Support Services
Available to Existing and Start-Up Small Businesses in the City of
Cleveland". Read Staurt's report here(.pdf file). Stuart will join the NEO Excellence Roundtable Tuesday, August 2nd, to discuss his findings and recommendations... please read about this Roundtable here, and feel free to join us.

The study finds, while there are 37 business service providers dedicated to developing and nurturing
businesses the providers aren't organized around a central
concept so they often don't work together to give the right kind of
help to small or start-up businesses

It is hopeful that business support service providers, foundations, colleges, non-profits and government entities that are the subject of the report will see it as a roadmap to improve the local economy. An article in the Plain Dealer discussing the study is posted and linked below.

Some points pulled from the PD write-up include:

  • to succeed in Cleveland, small businesses need more leadership from city policy makers and more teamwork among local service providers
  • identified 37 business service providers dedicated to developing and nurturing businesses. But the providers aren't organized around a central concept. So they often don't work together to give the right kind of help to small or start-up businesses
  • "Everybody's working in a silo," Robinson said. "There's no coordination. That's the culture of Cleveland."
  • The culture of nonprofits also might be working against business development in the city, researcher Mendel said.
  • Local business service providers get their financing from many different sources. This helps to create fiercely independent organizations that serve a narrow group of businesses but that can fail to create a generally friendly environment for entrepreneurs, he said.
  • "We are as large as the 29th state, as a region," Mendel said. "You have to conclude that there's money and talent here. We may be able to grow out of our own problems, if we get organized."

Problems identified and solutions proposed include:

Problem: There are too few businesses - specifically minority-owned businesses - to serve residents.

Solution: Neighborhood and market studies could identify opportunities for small businesses and entrepreneurs. The Greater Cleveland Partnership could lend its research and planning expertise to develop a roadmap for low-technology business start-ups.

Problem: Some business service organizations can't offer the long term, intense help that undercapitalized business owners need, partly because the organizations themselves are underfunded or understaffed.

Solution: Policy makers and business service organizations could develop a common model to help small and start-up businesses. They also could agree on a common way of measuring success in starting, nurturing and sustaining businesses.

Problem: Cleveland's many business service providers don't work together.

Solution: Public leaders, grant makers and other funding agencies could offer financial incentives for organizations to collaborate rather than compete.

Problem: There is no organizer of business service providers, public policy makers or funding agencies.

Solution: The Cleveland mayor's office could convene service providers, appoint leadership and empower leaders to develop a unified strategy to support businesses.

Problem: Local college and university resources are underused and represent potential for incubating business ideas.

Solution: Create a micro-enterprise fund for graduating MBA and business students who have strong business plans

Problem: Few venture capital firms have invested in small or service businesses in Cleveland.

Solution: Create a micro-enterprise venture capital fund with contributions from the venture capital firms. In addition, banks could give more authority to neighborhood lenders who are close to borrowers

The PD write-up follows - we'll add more on this study and vision after the Roundtable.

Small businesses need help to play a vital local role
Thursday, July 21, 2005 - Mary Vanac - Plain Dealer Reporter

Cleveland could foster small-business growth as a way to erase the "Poorest Big City in America" distinction it earned last year, according to a researcher at Cleveland State University.

More small-business ownership in the city would mean more wealth for residents.

But to succeed in Cleveland, small businesses need more leadership from city policy makers and more teamwork among local service providers, said Stuart Mendel, author of "An Assessment of Business Support Services Available to Existing and Start-up Small Businesses in the City of Cleveland."

Mendel is assistant dean of the Maxine Goodman Levin College of Urban Affairs at Cleveland State and co-director of the college's Center for Nonprofit Policy & Practice. His research is expected to be made public during a morning news conference today.

The Urban League of Greater Cleveland asked Mendel to study the city's business support services in the wake of Mayor Jane Campbell's Summit on Poverty last year, said Myron Robinson, league president. Robinson chairs the city's jobs and business development committee that was created during the summit.

Relying on U.S. Census Bureau data from 2000, Mendel estimated that Cleveland residents have "buying power" of $6.1 billion a year. Yet the adult-to-business ratio in Cleveland is only 9 percent, compared with 13 percent in both Cincinnati and Columbus.

"The businesses that are here are really producing. It's just that there aren't enough of them," Mendel said.

That means the door is open to new small businesses in Cleveland, he said. But few residents may have the desire or ability to be business owners. And this reality can't be controlled by the city or its business service providers.

Mendel found plenty of talented people working hard for small businesses in the city. He identified 37 business service providers dedicated to developing and nurturing businesses.

But the providers aren't organized around a central concept. So they often don't work together to give the right kind of help to small or start-up businesses.

Partly as a result, the number of Cleveland businesses is not rising, and in fact, is falling, relative to small business growth in peer cities.

"Everybody's working in a silo," Robinson said. "There's no coordination. That's the culture of Cleveland."

Steve Millard disagrees with the study's description of the Greater Cleveland Partnership as an exclusive membership organization that does little to help the general business community.

"Our model is a membership model. Our members give us dues. In return, we provide services in excess of those dues," said Millard, executive director of the Council of Smaller Enterprises, a partnership member.

"Then we take the dollars we don't use to serve our members directly and write checks for things that no one else will pay for," he said.

For instance, COSE paid for the startup and operation of NEO411.biz, a small-business referral service that is available to all community members.

"The resources are available. People need to access them," he said.

The culture of nonprofits also might be working against business development in the city, researcher Mendel said.

Local business service providers get their financing from many different sources. This helps to create fiercely independent organizations that serve a narrow group of businesses but that can fail to create a generally friendly environment for entrepreneurs, he said.

Then there's Cleveland's image problem. Ohio legislators don't understand the economic importance of Northeast Ohio, which produces nearly 30 percent of the state's gross product, he said.

"We are as large as the 29th state, as a region," Mendel said. "You have to conclude that there's money and talent here. We may be able to grow out of our own problems, if we get organized."

To reach this Plain Dealer reporter:

mvanac [at] plaind [dot] com, 216-999-5302