Microenterprise development programs (MED\u27s) have expanded in recent years as an economic development strategy in rural areas. The sluggish economy coupled with an acknowledgement that small businesses create many rural jobs are the main drivers behind this expansion. In the rural county of Van Wert, OH, the local Extension Community Economic Development office demonstrates how MED programs can also increase the relevancy of local services while generating funding to support Extension

Bowen-Ellzey, Nancy

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The Journal of Extension Volume 52 Number 2 Article 10 4-1-2014 Microenterprise Development Program Encourages Entrepreneurship While Supporting Extension in Van Wert County, Ohio Nancy Bowen-Ellzey Ohio State University Extension, bowen-ellzey.1@osu.edu This work is licensed under a Creative Commons Attribution-Noncommercial-Share Alike 4.0 License. Recommended Citation Bowen-Ellzey, N. (2014). Microenterprise Development Program Encourages Entrepreneurship While Supporting Extension in Van Wert County, Ohio. The Journal of Extension, 52(2), Article 10. https://tigerprints.clemson.edu/joe/vol52/iss2/10 This Ideas at Work is brought to you for free and open access by the Conferences at TigerPrints. It has been accepted for inclusion in The Journal of Extension by an authorized editor of TigerPrints. For more information, please contact kokeefe@clemson.edu. April 2014Volume 52Number 2Article # 2IAW5Ideas at WorkMicroenterprise Development Program EncouragesEntrepreneurship While Supporting Extension in Van WertCounty, OhioAbstractMicroenterprise development programs (MED's) have expanded in recent years as an economicdevelopment strategy in rural areas. The sluggish economy coupled with an acknowledgement thatsmall businesses create many rural jobs are the main drivers behind this expansion. In the rural countyof Van Wert, OH, the local Extension Community Economic Development office demonstrates how MEDprograms can also increase the relevancy of local services while generating funding to supportExtension.IntroductionRural communities are challenged as never before to revitalize and sustain their local economies,especially in light of the recent recession, but also due to increased global competition, corporatedownsizing, and persistent workforce development constraints. At the same time, local Extension isfacing challenges of its own—sustainable funding and doing more with less while maintainingrelevancy. These challenges can be addressed through targeted and innovative programming, suchas microenterprise development, that meets local needs while helping to fund Extension.The Microenterprise Development (MED) movement has grown in response to unemployment andpoverty in the United States (Schmidt, Kolodinsky, Flint, & Whitney 2006). The basic premise of thisapproach is that microenterprises, that is, firms with fewer than 10 employees, can be provided withsmall loans that allow them to start or expand productive activities and thereby increase incomesand escape poverty. (Christy, Wenner, & Dassie, 2000). Rural communities, a sizable faction withinthe MED movement, seek to offer education and financing programs to encourage entrepreneurs tostart new businesses and create jobs.Extension can play an important role in strengthening local economies through supporting andenhancing community-based entrepreneurship (Bassano & McConnon, 2008). An Extension-basedNancy Bowen-EllzeyField Specialist,Community EconomicsOhio State UniversityExtensionLima, OhioBowen-ellzey.1@osu.eduMED program is useful in meeting the needs of communities while creating a new funding stream tosupport local Extension activities. Effective MED programming can lead to long-term growth andprosperity in rural areas, and it can start with creation of a loan fund embedded with technicalassistance to encourage entrepreneurship.How the MED Program Works in Van Wert County, OHFor a MED program to be successful, there must be access to capital and technical assistance, andlocal Extension staff has the capacity to provide both. Extension is a key player in identifying thesmall business community and providing education and support to further develop that segment ofthe local economy. (Muske, Woods, Swinney, & Khoo, 2007). Extension can effectively startup andmanage MED programs, as is the case in Van Wert County, OH.The Extension Community Economic Development (CED) office in Van Wert County started a MEDprogram in 2000 with the goal of creating and retaining private-sector job opportunities principallyfor persons of low-and-moderate-income. The program is also intended to encourageentrepreneurship in sectors that diversify the local economy and to encourage the redevelopment ofblighted or deteriorated areas.The program was initiated by applying for grant funds through the Ohio Department of Housing andCommunity Partnerships Economic Development Program (OHCP) on behalf of the City and Countyof Van Wert. Five grants totaling over $600,000 were received between 2000-2006 to seed andsustain the loan fund program. After 5 years the program had reached a critical mass, requiring nonew infusion of capital and becoming self-sustaining. Principal and interest payments hadcontinuously revolved back into the fund, building an adequate balance for future loan projects.Once the program became self-sustaining, administrative fees began to be assessed for staff timespent operating and managing the program. According to OHCP rules, up to 20% of the loan balancecan be used for administrative or other community purposes. Beginning in 2006, the Extension CEDoffice assessed the program $3,000 for administration. By 2010, administrative reimbursement hadgrown to $19,000, allowing the office to become less and less dependent on other funding sources.Within a dozen years, the program has expanded to 65 loans, with 500 jobs created or retained. Asthe loan fund continues to grow, the CED office also continues to increase reimbursement forservices in administering the program, easing dependency on other sources of funding andstrengthening the community economic development program. Certainly, Extension needs somethinglike a small business program, as much as small business needs something like Extension. (Johnson& Fisher, 1991).Education and Training as Components of a Successful MEDProgramEducation and training is key to the success of rural MED programs. In Van Wert, all potentialborrowers are required to take a course, Starting Right, which is offered once per month. Table 1provides a complete list and description of the variety of technical assistance venues and methodsoffered to accomplish the program goals and objectives.Ideas at Work Microenterprise Development Program Encourages Entrepreneurship While Supporting Extension in Van Wert County, Ohio JOE 52(2)©2014 Extension Journal Inc. 2Table 1.Technical Assistance Venues and MethodsType of TA Description FrequencyOne-on-onecounselingThe Extension CED office offers one-stopservices to clients on starting a business. One-on-one meetings include advice and referrals.As needed– average3 meetingsper weekClassroom "Starting Right" class offered once per monthprovides an overview of the steps involved instarting a business and how to apply forfinancing.MonthlyWorkshop orSeminarFinancing workshops are held bi-annually toprovide an overview of financing toolsavailable for small businesses in the region. Avariety of workshops on other topics are alsoheld.As needed– at leasttwo peryearEvent Annual Entrepreneurship Fair and businessplan competition is held to introduceindividuals, particularly displaced ordisadvantaged, and students to theopportunity of starting a business.AnnuallyIncubatorProgramOngoing technical assistance provided toclients and tenants of a small businessincubator administrated by the Extension CEDoffice.OngoingMobileworkshop/modulesEntrepreneurship modules have beendeveloped through both OSU Extension andthe Wright State University BusinessEnterprise Center to provide mobile trainingservices in locations throughout the region.MonthlymodulesPeer to PeerRoundtableDiscussionsThe Extension CED office and Chamber ofCommerce hold quarterly roundtablediscussions with small businesses on currentissues and concerns.QuarterlyConclusionRestructuring and reduced public dollars, especially at the local level where economic conditions havebeen severely stressed, have been a reality for Extension for over a decade. Extension must maintainIdeas at Work Microenterprise Development Program Encourages Entrepreneurship While Supporting Extension in Van Wert County, Ohio JOE 52(2)©2014 Extension Journal Inc. 3or increase its relevance to society if it is to expect continued support. Small business andentrepreneurship programming represents an opportunity to substantially increase our relevance andsupport. (Johnson & Fisher, 1991).Although the number of local Extension offices has declined over the years and some county officeshave consolidated into regional Extension centers, there remain approximately 2,900 Extensionoffices nationwide. Increasingly, Extension serves a growing, increasingly diverse constituency withfewer and fewer resources ( http://www.csrees.usda.gov/qlinks/extension.html#yesterday). Despitediminishing resources, Extension is strategically positioned to develop and deliver MED programmingto rural communities nationwide.ReferencesBassano, L., & McConnon, J. (2008). Strengthening entrepreneurship and building leadership capacityin rural communities. Journal of Extension  [On-line], 46(2) Article 2FEA1. Available at:http://www.joe.org/joe/2008april/a1.phpChristy, R., Wenner, M., & Dassie, W. (2000). A microenterprise-centered economic developmentstrategy for the rural south: Sustaining growth with economic opportunity. Journal of Agriculturaland Applied Economics , 32(2), 331-344. Retrieved from:http://ageconsearch.umn.edu/bitstream/15489/1/32020331.pdfJohnson, T., & Fisher, D. (1991). Rural small business development. Journal of Extension [On-line], 29(3) Article 3FEA6. Available at: http://www.joe.org/joe/1991fall/a6.phpMuske, G., Woods, M., Swinney, J., & Khoo, C. (2007). Small businesses and the community: Theirrole and importance within a state's economy . Journal of Extension  [On-line], 45(1) Article 1RIB4.Available at: http://www.joe.org/joe/2007february/rb4.phpSchmidt, M., Kolodinsky, J., Flint, C., & Whitney, B. (2006). The impact of microenterprisedevelopment training on low-income clients. Journal of Extension  [On-line], 44(2) Article 2FEA 1.Available at: http://www.joe.org/joe/2006april/a1.phpUSDA. (n.d.). Extension introduction and history . Retrieved from:http://www.csrees.usda.gov/qlinks/extension.html#yesterday Sources of Further AssistanceMicroenterprise Organization of Ohio (MOO). Formed to provide assistance to microenterprisepractitioners and support organizations. Information retrieved from: www.microenterpriseohio.orgOhio Department of Development, Housing and Community Partnerships. Grant funds availablethrough the Microenterprise Business Development Program. Information and requirements retrievedfrom: www.odod.state.oh.us/CDD/OHCP/edp.l.htm.United States Department of Agriculture, Rural Enterprise Development. Provides grant and loanfunding opportunities for organizations, businesses and individuals in rural communities. Informationretrieved from: www.rurdev.usda.gov.Ideas at Work Microenterprise Development Program Encourages Entrepreneurship While Supporting Extension in Van Wert County, Ohio JOE 52(2)©2014 Extension Journal Inc. 4Copyright © by Extension Journal, Inc.  ISSN 1077-5315. Articles appearing in the Journal become theproperty of the Journal. Single copies of articles may be reproduced in electronic or print form for usein educational or training activities. Inclusion of articles in other publications, electronic sources, orsystematic large-scale distribution may be done only with prior electronic or written permission of theJournal Editorial Office , joe-ed@joe.org.If you have difficulties viewing or printing this page, please contact JOE Technical SupportIdeas at Work Microenterprise Development Program Encourages Entrepreneurship While Supporting Extension in Van Wert County, Ohio JOE 52(2)©2014 Extension Journal Inc. 5

Microenterprise Development Program Encourages Entrepreneurship While Supporting Extension in Van Wert County, Ohio

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Microenterprise Development Program Encourages Entrepreneurship While Supporting Extension in Van Wert County, Ohio

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