Small Business
Wind
at Your Back
A
surprising number of state agencies offer
free resources to help businesses stay afloat
Who to call for more specific help
By Lawrence Bivens
When
the General Assembly considered removing the sales tax cap on
luxury items last summer, alarm bells went off in a small but
increasingly important sector of the state’s economy — the more
than 70 businesses in the boatbuilding industry.
After being decimated by a
1980s-era federal luxury tax, the industry has rebounded in watery
communities like Beaufort and other not-so-obvious locations farther
inland. With price tags for many of their products extending well into
six figures, elimination of the $1,500 state sales tax cap would have
spelled disaster for the many small boatbuilders in the state. It also
would hurt the larger companies like Hatteras Yachts and Grady White
Boats, which employ 1,100 and 500 workers, respectively.
Boatbuilders knew they
needed help to convince the legislature that the action would do much
more harm than good, and they got it from NCCBI, which lobbied against
any budget-balancing moves by the General Assembly that singled out
any specific industry. Help also came from an unexpected source —
the N.C. Small Business and Technology Development Center (SBTDC).
“Most people don’t
realize boatbuilding in North Carolina is as big as it is,” says
Mike Bradley, whose Beaufort-based Marine Trades Association operates
under the auspices of SBTDC’s office at UNC-Wilmington. “We have
boat-builders here whose craftsmanship has been handed down through
many generations. It is definitely one of our earliest industries.”
At the request of
boatbuilders, Bradley researched the impact that similar legislation
has had on other states’ marine industries. Armed with evidence
showing that removing the cap would devastate the industry in North
Carolina and those who relied on it for their livelihoods, builders
went to Raleigh and succeeded in getting the proposal dropped.
With support from the SBTDC,
Bradley’s group has been there before to help boatbuilders stay
afloat by advising them on a host of business issues that are unique
to the industry — personnel, financing, regulatory compliance, R
& D, marketing and more.
“The needs of our industry are sufficiently unique that we
need our own specialized organizational resources,” says Bill
Naumann,
president of Hatteras Yachts in New Bern. “The Marine Trades
Association clearly plays a valuable role in disseminating information
that’s been helpful to us.”
While it may initially be
puzzling that the SBTDC, whose funding partially comes from the state,
would help businesses rise up against the state, it does make sense
when you look at the big picture. And in North Carolina, more so than
in most states, helping small businesses succeed is a top priority.
“We consider the SBTDC a
key part of our business and industry strategy,” says state
Secretary of Commerce Jim Fain, He recognized the value of the SBTDC
while serving as assistant secretary for economic development in the
late 1990s. He reorganized the department to pull the center closer to
Commerce’s existing industry program. “They are an important
resource for any number of industries, but their work in the marine
trades has truly been groundbreaking.”
There are many other
valuable resources available to small business owners, many of them
offered for free or at minimal cost through state government agencies.
Officials at these agencies say they would be happy if small business
owners called more often for help. But the SBTDC offers the greatest
variety of resources to the widest assortments of small businesses
Encouraging
Entrepreneurship
Organized in 1984 under the
umbrella of the 16-campus University of North Carolina General
Administration, the SBTDC is the state’s most tangible mechanism for
providing consulting and technical assistance to the business
community. Its mission is to support economic growth and development
by encouraging entrepreneurship, assisting in the creation and
expansion of small and medium-sized enterprises and facilitating
technology development and commercialization. website (www.sbtdc.org)
or by calling the SBTDC at 800-258-0862.
It does this primarily
through business counseling, educational programs and technical
assistance, all of which leverage a network of university-based
professionals such as Bradley and others. In that regard, the center
is doing for today’s entrepreneurs what the agricultural extension
service did for farmers a century ago.
Nationwide, there are 58
small business development centers operating in all 50 states, the
District of Columbia and U.S. possessions. “We’re the only center
in the country with a “T” in its name,” explains Scott
Daugherty, executive director of the SBTDC, which is headquartered in
downtown Raleigh. That’s because technology, in some form or other,
plays such a central role in the small businesses of today.
Since its founding, the
SBTDC has blossomed from a relatively modest counseling program into a
comprehensive business support network that helps small and mid-sized
firms with issues ranging from government procurement to international
trade and venture capital formation.
“We’ve certainly evolved
the focus of our services over the past 18 years,” Daugherty says.
The center’s total full-time staff now numbers 80. Its $5.8 million
dollar annual budget comes from sources that include the university
system, the N.C. Department of Commerce and the U.S. Small Business
Administration (SBA). It maintains collaborative arrangements with
organizations that include the U.S. Department of Defense, the
Export-Import Bank and the N.C. Biotechnology Center.
“We’re constantly
looking for ways we can make a greater impact with the dollars that we
have,” Daugherty says.
In the case of its work with
marine trades, SBTDC helped leverage corporate and philanthropic funds
to design a campaign encouraging existing boatbuilders to expand in
North Carolina and other companies to relocate here. Having secured
financial support from Progress Energy, Electricities and the N.C.
Electric Membership Corp., SBTDC’s marine trades program received a
$175,000 grant from the Golden LEAF Foundation, the Rocky Mount-based
group funded through state proceeds from the 1998 tobacco settlement.
“A significant portion of the award is going into efforts to keep
existing jobs, and promote the growth of new jobs and businesses in
and for our industry — especially in rural counties,” says
Bradley.
Key to the promotional
effort is eye-catching upgrades to the web site that Bradley maintains
(www.ncwaterways.com) in support of existing firms. The site offers a
searchable database that potential customers use to zero in on the
product or service they need. The site also promotes visitation to
North Carolina boating destinations, as well as the state’s appeal
as a re-location destination for businesses in the industry. Bradley
is particularly eager to promote North Carolina to firms that supply
builders. “When you look at the hardware and components that go into
the boats built here, most of it has to be brought in from outside
North Carolina,” he explains.
SBTDC services often are
purely informational. When word that U.S. Coast Guard inspectors were
making unannounced visits to area boatbuilders, Robin Mann, co-owner
of Paul Mann Custom Boats in Manteo, knew she needed accurate
information about what inspectors would be looking at. “Everyone
here was kind of nervous,” recalls Mann. An e-mail to Bradley
requesting clarification soon got Mann and other builders the
information they needed. “Mike made calls to Washington, D.C., to
find out what the inspections were all about.”
Available to Help Anyone
The SBTDC is available to
help any small business, not just boatbuilders. Its staff includes 50
management counselors working out of 17 offices across the state.
There is also a plethora of graduate business and professional
students who advise and assist North Carolina businesses under the
banner of the SBTDC. The center is currently analyzing the legal
aspects of small business in North Carolina, a project that is
utilizing eight law students. There also are ongoing business
consulting projects that involve MBA students from the state’s
business schools. “That’s one of the best ways for small
businesses to have access to some really high-powered support,” says
Dr. Ron Ilinitch, regional director for the SBTDC’s central office
in Chapel Hill.
Two- and three-member
student teams from graduate business programs across the state are
assigned by the SBTDC as management consultants to local companies.
The teams identify and analyze problems confronting the company and
then recommend solutions to management. For Theresa Walker, an MBA
student at Elon University, the experience working as part of a team
on a real-world project for a local apparel firm marked one of the
most valuable experiences of her business education.
“It was great to be able
to work with this particular client,” says Walker, whose SBTDC team
assisted T.S. Designs Inc., a Burlington textile screenprinter whose
clients have included Adidas, Nike and Tommy Hilfiger. The company
invited the SBTDC team to help re-orient its marketing strategy in
order to survive in the ultra-competitive textile industry. “The
owner saw his business going overseas with the rest of the industry
and knew he needed a new approach,” recalls Walker. She and her
teammates organized focus groups and distributed consumer surveys to
current and potential customers. From that feedback they designed a
marketing strategy that focused on a carefully considered niche
market: high-end children’s clothing.
“We knew we needed a
market where quality is more important than price,” says Walker, who
reckons that she and her fellow students put in 350 hours between
them.
Walker and other business
students are now awaiting results from a statewide competition among
all SBTDC teams. For the past 15 years, the SBTDC has co-sponsored,
along with RSM McGladrey and Wachovia Bank, an annual Graduate
Business Student Competition, which evaluates each project based upon
case reports, oral presentations and client evaluations. The top teams
receive cash awards.
“The reason I love this
program is that everyone wins,” explains Ilinitch, who served as
adviser for the Elon team. “The company gets top-notch expertise,
students get credits, experience and, potentially, prize money, and
the state gets a better environment for growing small businesses.”
What’s more, Ilinitch sees
the solution developed for T.S. Designs as one that might be
replicable for other firms in the state’s ailing textile industry.
“They have tackled an issue that, if resolved, can have an enormous
impact across the entire industry.”
Global economics is an
opportunity for other small businesses in the state receiving SBTDC
advice. For Swiss Artex Group, a unit of Arden-based ICHA Inc., SBTDC
assistance helped cultivate a business model that relies on raw
materials shipped in from foreign suppliers. The company makes
embroidered patches for customers ranging from Boy Scout troops to
NASCAR drivers, but also designs and makes advertising specialty items
— caps, shirts and assorted apparel items with corporate or
association logos. Placing bulk orders for its supplies meant becoming
familiar with the operational aspects of global commerce. “I
didn’t know anything about importing,” says Brian Fuchs, the
company’s vice president. His banker recommended contacting the
SBTDC at Western Carolina University in Cullowhee, which dispatched a
Charlotte-based trade expert to help Fuchs deal with ports, shipping
agents and other import matters.
Swiss Artex has also relied
on SBTDC advice on how — indeed whether — to grow the company,
which employs 15. The center helped organize a recent management
retreat for the company that pulled in outside business development
experts. “Growth is definitely an issue for us,” Fuchs says. In
such a highly niche oriented business, he feared that growing too far
too fast might ultimately destroy the company. “We came away from
the retreat knowing a lot more than we did going in.”
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