The New York State Small Business Development Center (NYSSBDC) has identified and developed a number of innovative positions to meet the needs of the changing small business environment across New York. These issues, identified below, build upon the current capabilities of the SBDC program and address issues which are of significant importance to the state’s small business sector. By providing the SBDC program with appropriate resources, New York can target specific segments of the small business population which are being challenged and provide critical assistance applicable to sustaining business growth in a wide variety of business sectors. The intent of this effort is to better utilize the SBDC statewide network by expanding the variety of services to meet individual state/regional priorities. All the programs identified will not necessarily be of high importance to all geographic areas, however, it is envisioned that regions will implement those programs having the most strategic value to their constituent base. In aggregate, six issues represent major funding over several years to the National SBDC program. It is recognized that this is an aggressive position that is none-the-less appropriate for the support of the economic engine that is propelling the state’s economy. Together, the SBDC network, our partners and the small business sector can achieve the sustainable growth necessary to ensure our future.

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Capital Access……………………………………...…………...…….……………..…. 2

Disaster Recovery……………………….…………...…………...….…………….…..... 5

Innovation and Competiveness………………………...…………....………………….. 8

Small Business Sustainability…………………………...…………….………………... 11

Older Entrepreneur………………………………………...……….….…………..…… 15

Veterans…………………………………………………………...…..………..……… 17

Table of Contents

New York State Small Business

Development Center

EDUCATION. ENTREPRENEURSHIP. ECONOMIC DEVELOPMENT.

NYSSBDC

STATEMENT/JUSTIFICATION OF NEED:

Access to capital is one of the most dynamic and challenging components in establishing and growing a business. The majority of small business entrepreneurs find the process confusing and often discouraging, and when funding is not obtained due to lack of knowledge about the proper role of capital, it is not just the entrepreneur who loses out but rather the larger economy to which the small business contributes. The small business entrepreneur has ready access to information about debt based capital because loan options are widely advertised in the commercial marketplace. However, the entrepreneur may have little or no access to information about other options. The Small Business Development Center Capital Access Assistance would give the entrepreneur access to all the options, and then support the entrepreneur to achieve a best outcome in raising capital for their individual circumstance. This is becoming increasingly important in Rural New York. Capital sources range across a wide spectrum of risk. Debt-based capital is evaluated to minimize loan risk, by focusing on available cash flow and collateral. Venture-based capital or equity, manages venture risk by focusing on market advantage, scalable markets, strong management teams and deep industry knowledge and relationships. There are many other alternatives between these two extremes. Some of these capital alternatives are well established and some are just emerging. Small business capital alternatives include sub-debt, mezzanine financing, royalty financing, private equity, angel financing, convertible notes, other debt and equity arrangements as well as local, state and federal quasi-public capital offerings.

Capital Access Assistance

SBDC clients are assisted to be strategic in exploring all opportunities for raising capital in order to assure the probability of achieving their company’s growth plan while maintaining acceptable risks. Through direct, hands on experience, Small Business Development Center Business Advisers have identified the gaps in financing options available to entrepreneurs and have stepped in to explore, educate and provide access to alternative sources of capital, pointing out the potential risks and rewards. Proactive SBDC programs in Rural New York can facilitate new private equity alternatives by the creation of new angel investment groups while helping to analyze existing private and public offerings.

SMALL BUSINESS DEVELOPMENT CENTER NETWORK IS PREPARED:

The SBDC record of assisting small to medium-sized businesses in marketing, financial management, strategic planning, personnel, capital formation and overall business planning, provides a gateway for expanded service delivery. Entrepreneurial SBDC programs around the country have established sophisticated offerings that utilize

EDUCATION. ENTREPRENEURSHIP. ECONOMIC DEVELOPMENT.

New York State Small Business Development Center

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the capabilities of other existing service providers, it is proposed that SBDC programs focus on areas where there is a gap or a lack of resources necessary to meet the needs of small business that is complementary…. not duplicative of available services.

TARGETED NEED AREAS:

Four distinct areas, where the SBDC program can provide added support to capital access include; 1. capital education, 2. assessment of company potential, 3. preparedness to request capital, and 4. submission. Once capital is secured, the SBDC program is well positioned to assist the company with growth and assessment advisement.

1. Capital Education

Capital alternatives have increased over the years, and the small business owner requires education, more than ever, to understand the wide array of financing options, and how those choices will impact the future of the business. SBDC business advisers have worked closely with the banking community for decades by assisting clients in preparing for traditional loans that have a high probability of a successful outcome. The tools advisers have used to support the debt-based capital options should be expanded and translated to the broader capital offerings. The financial and management concepts have wide applicability across the capital spectrum. Numerous SBDC Business Advisers across the state have broken new ground in the area of capital education, and these best practices would be incorporated into a model template used to develop a broader initiative for all SBDC programs.

their statewide network to deliver specialized services in areas such as; technology, commercialization assistance, economic/demographic analysis, regulatory compliance, energy efficiency, and international trade to name a few. The SBDCs are well positioned to meet entrepreneur’s needs in a cost effective manner. Strengths of the national SBDC network include:

Fully established infrastructure with 23 regional centers throughout New York State.

Proven credibility with the business and economic development community for the ability to deliver new and innovative programs.

Expertise of the staff; fully accredited and certified Business Advisers

SBDC networks are well established in the banking community.

Strategic partnerships through institutions of higher education, SBDCs access the most current and valuable sources of information and expertise.

SBDC staffs work across industries in critical areas, assisting more than most other federally funded assistance providers

SBDC staffs have a proven, demonstrated record of improving the managerial and financial performance of firms across industries.

SBDC staffs are explicitly engaged in educational activities which increase the management capacity of the firms; therefore, the benefits are sustainable over time.

SBDC staffs have established high quality standards of continuous improvement programs in place and have the ability, on a national basis, to quickly identify and implement best practices.

SBDC staffs have a history and “culture” of engaging multiple partners to meet their clients’ specialized needs.

The Capital Access Assistance proposes to utilize the existing SBDC network and its resources to effectively expand its capabilities to better support small businesses in seeking, achieving and maximizing capital. After analyzing

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SBDCS - CREATING NEW SOURCES FOR CAPITAL ACCESS

The SBDC program should play a key role in promoting private capital alternatives by driving the creation of new investment groups. Angel investment groups can be created to focus on specific regions, industries, or areas of special need. These groups can be started with a few people, and with careful cultivation of opportunities and investments, they grow and seed new businesses and attract new investors. Creating and facilitating an angel investment group assists SBDC clients in gaining entry into the larger investment community. SBDC programs already have models that work and exemplify the strong partnerships that develop with the broader spectrum of funders. Importantly, angel investment groups may choose not to focus solely on equity; offering debt alternatives, royalty, equity, and other types of investment.

Partnerships

The SBDC Capital Access Assistance would rely on support from key national associations and organizations. Potential Partners could include:

Center for Venture Research Angel Capital Association Regional development groups Angel groups founded by SBDCs Other regional angel groups SBICs Economic Development Zones Banking institutions other

Managing the labyrinth of financing options can be a daunting task for small business owners and one of the top reasons they seek assistance. The Small Business Development Center network has the expertise, knowledge and talent to guide small businesses through this process and has taken the lead in facilitating greater access to capital.

2. Assessment of Company Potential Once a solid understanding of capital options has been established, the adviser can assist the business owner by engaging in an assessment of company potential. That assessment would include a risk analysis, along with a mapping of best capital opportunities for the business. The outcome of the assessment would allow the owner/entrepreneur to gain knowledge about the capital markets and give indications about the likelihood of favorable access outcomes.

3. Preparedness to Request Capital

This critical step aligns well with the skills SBDC Business Advisers are known for: adaptive and insightful one-on-one business advisement. Capital managers across the spectrum lament that business owners are under prepared and not properly versed in the process of accessing capital. The majority of funding requests are declined prior to serious consideration due to lack of preparedness. SBDC Business Advisers prepare the business owner by advising on the business plan, the financials, the projections, the presentation, and the approach for the request. During this process, the SBDC adviser prepares the business owner to correct areas of weakness that must be resolved prior to submission.

4. Submission

The submission decision includes the; when, how, where and to whom the submission should be made. SBDC Business Advisers have established relationships in these key areas. By knowing and teaching the rules of access engagement, who and which organizations are involved and available, and which approaches are most likely to result in success; the adviser tailors an approach that maximizes the successful results. Once capital is secured, the SBDC program delivers ongoing assistance the owner with growth and business advisement – an area of proven success for SBDCs.

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STATEMENT/JUSTIFICATION OF NEED:

The major devastation wrought by the terrorist attacks of 9-11 (September 2001) in New York City overwhelmed the federal disaster recovery system. Nearly two years later, the recovery efforts in Lower Manhattan’s small business sector still lagged. The 2005 disaster in the Gulf Coast and New Orleans underscored the continued inability of the federal disaster recovery efforts, especially as they relate to small business. This recovery delay is reflective, in part, of the massive extent of damages. However, the delay may be equally due to the failures of the recovery system itself. The nation’s disaster recovery system is driven by the Federal Emergency Management Agency (FEMA). The U.S. Small Business Administration (SBA) plays a lead role in recovery efforts. Through its Disaster Assistance Center, SBA is responsible for providing disaster loans to businesses (of all sizes) and to homeowners and renters who suffer economic loss. SBA’s disaster assistance role has been largely disconnected from SBA field operations (the Districts) and substantial SBA resource partners, such as the Small Business Development Center (SBDC) program, even after the New York State SBDC proved its importance in delivering services to 8,300 small businesses after 9-11, facilitating $289,000,000 in federal disaster lending known as Economic Injury Loans. SBA disaster assistance efforts began largely disconnected from state-based interests in business disaster response efforts. Indeed, there is abundant evidence that state-response efforts often have been rebuffed by the lead FEMA personnel and SBA’s

Disaster Assistance Center staff. States that are directly impacted have the most vital interest in business recovery efforts be timely and successful. These interests increasingly highlight a willingness to engage and coordinate support from their own resources as a part of a recovery process. In doing so, the states want to be fully engaged and be viewed as a partner with the disaster recovery initiatives in their states. Recognition of this potential for partnering between FEMA, SBA and the states, especially in business recovery efforts, makes plain sense. It is a partial answer to the diminished capacity of the SBA to provide the human resources necessary for an appropriate response to larger disasters and multiple disasters that strain the resources. The New York State SBDC has the distinction of being the first non-SBA personnel approved to disseminate and assist in federal loan applications. Historically, the dissemination of loan applications was the approved method of managing the relief efforts, limiting the distribution of applications allowed the federal agencies to manage the process but frustrate the impacted citizens. Additionally, natural disasters tended to result in over 90% of disaster assistance loans being applied for physical damages, including homes, that resulted in under-writing similar to mortgage lending, a vastly different experience than 9-11. Initially, 90% of all small business economic injury loans were denied near ground zero primarily because SBA reviewers did not have the skill set to review those loans, they were mortgage lenders, not business lenders. The SBDC appealed all declined and ended with

EDUCATION. ENTREPRENEURSHIP. ECONOMIC DEVELOPMENT.

Disaster Recovery Assistance and Services

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WHAT CAN BE DONE? A more effective federal-state partnership response to small business disaster recovery is urgently needed. The NYSSBDC program, with 23 regional service centers, provides the linkage to SBA disaster recovery efforts and the state response. This bridging mechanism would work because the SBDC programs are the leading resource partner of the SBA and are the leading state endorsed (and connected) business assistance resource in each locality. State acknowledgement of the importance of engaging the resources of the SBDC program, in response to critical disasters, has been recognized in New York in response to 9/11 Terrorist Attack (2001), in Florida in response to a series of hurricanes (2002-2004 and current tornados), and recently in New Orleans and the Gulf coast states impacted by Katrina (2005). In each of these major disasters, there was an expectation by the states that “their” SBDC would be a key component of the small business recovery process. Noteworthy examples of this expectation are reflected in the State of North Carolina’s “Disaster Recovery Guide”: http://www.osbm.state.nc.us/disaster/DisasterRecoveryGuide011707.pdf which designates the state’s SBDC as the “first responder” to business recovery and details the role that the SBDC will play; the State of Florida’s Comprehensive Emergency Management Plan through implementation of “Emergency Support Function 18 - Business and Industry”, identifies the role of its SBDC Network as a statewide support agency for immediate and long-term business recovery. Nationally, SBDC staffs have volunteered to rotate into the disaster area for immediate response on the ground, processing applications, developing and evaluating recovery business models, and distributing accurate information. Using the past experience of SBDCs in disaster recovery confirms that there is the need and opportunity to formalize an expanded disaster recovery role for the nation’s SBDC program. The SBDCs bring significant pre-qualified and pre-committed resources to businesses to help meet small business disaster recovery needs.

an approval rate of approximately 80% for economic injury loans.

Over the past decade, continued staffing reductions within SBA and its Disaster Assistance Centers have achieved budgetary goals at the expense of disaster service. This reduction in staffing has purportedly been offset by significant consolidation of loan processing functions and new IT solutions that improved efficiency without loss of customer service. This trade-off has not been documented in recent disasters. With diminished staff capacity, SBA’s disaster response has had to rely upon increasing use of contract employees, many of whom have to be trained, transported and housed in scarce space within the disaster area. The post Katrina experience confirms that consolidated loan processing and IT solutions have not lived up to their promise. Impacted citizens have been frustrated and expressed increased dissatisfaction with the experience.

The net effect is that today, we have less direct capacity through SBA to respond to the business side of disasters across the nation. And, in response to future disasters, we should expect that unless something is changed to improve the small business disaster response system, our capacity to respond will be ineffective and delay needed recovery efforts.

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This approach would allow for a quicker response capability and be more cost-effective than the reliance on contractual employees to supplement SBA’s direct disaster response resources. Furthermore, it provides the added benefit of increasing levels of services to the small business community post-disaster and improves the positive return on the investment in the SBDC network when the SBDC resources are engaged in a “first responder” disaster role.

The SBDC unique advantages include:

A broadly distributed geographic presence; Strong connection with all sectors of the government

and non-governmental communities;

Unrivaled, empathetic business counseling skills

Expertise in disaster loan requirements, business planning and loan packaging;

Capability of continued interaction, over time, with businesses which are recovering (SBDC Business Advisors remain, after temporary disaster efforts conclude);

The SBDC network provides a platform for sharing of disaster expertise, training and surge of added human resources

An investment in the SBDC program would strengthen day-to-day business service capacities across the state. POSITION DESCRIPTION: The SBDC network represents a human capital resource base which can be more effectively leveraged and engaged in disaster assistance efforts in New York State. SBDC personnel have the requisite skills and experience to partner with SBA Disaster Center response teams, serving as a locally based “first responder” resource. SBDC staff engagement in this role also will leverage the extensive state and local community contacts and provide immediate access to added local and state-based resources. The SBDC program has been strengthened through the specific understanding that all of the SBDCs volunteered to participate in ongoing disaster training, develop specific state-level disaster response plans and assume a “first responder” role. This prepared role would provide a pre-positioned business disaster assistance resource base in each state, ready and able for immediate response to disasters.

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EDUCATION. ENTREPRENEURSHIP. ECONOMIC DEVELOPMENT.

STATEMENT/JUSTIFICATION OF NEED:

We live in an increasingly competitive global marketplace characterized by increased access to markets by low-cost producers, near instantaneous transfer of knowledge and information, dramatically shortened product life cycles and very rapid introduction of new products and services for the world marketplace. The impact of globalization on the New York marketplace has been most dramatically felt by manufacturing. Over the past decade, thousands of manufacturing jobs have been lost; many of these lost jobs were lower-wage, lower-skill jobs that will never return. Better paying manufacturing jobs have been lost in industries which were not willing or able to innovate in order to stay competitive in the changing world marketplace. The Council on Competitiveness in Washington, DC has stated that “innovation will be the single most important factor in determining America’s success through the 21st Century.” The Council’s work on Innovate America is seminal in its look at the new realities of global competitiveness and in setting forth a blueprint to unleash America’s innovation capacity. A number of initiatives have been proposed by the Council to accomplish this.

Build a pipeline of innovators

Stimulate high-risk research

Energize the entrepreneurial economy

NYSSBDC Innovation and Competitiveness Services to Manufacturers

Focus on innovation growth strategies

Strengthen America’s manufacturing capacity The recent work of the Council and of other leading organizations have addressed the need to meet the global challenges to America’s economic future, however, those initiatives have gone largely unheeded at the federal level. There has not been a sense of urgency or engagement among national policymakers. There has been a lack of leadership and no national program initiatives launched to enhance business innovation and competitiveness. The NYSSBDC could play a role in supporting small to mid-sized businesses with innovation-based growth strategies. Although budget and staff reductions, over the past decade, have made it difficult for the SBDC to assume this leadership role, the SBDC’s constituency make-up the core of American innovation. The capacity constraints of the SBDC’s entrepreneurial development resources have made it difficult to deliver new initiatives. Given the challenges to New York’s future, there is a clear need for a meaningful initiative to support the innovation capacity and competitiveness of our small to mid-sized companies, particularly those in manufacturing.

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There has been a steady increase in the number of SBDC programs that have been accredited as Small Business and “Technology” Development Centers. New York being accredited in 2007. Experience shows that the SBDC network has the capability, with appropriate support, to carry out initiatives which are responsive to the changing needs of small business. The growth of technology clients of the SBDC program recognizes the increased emphasis to be given to technology-based economic development and innovation. Multiple training provided the basis upon which SBDC program developed technology standards and commercialization competencies leading to the accreditation designation. The SBDC program is positioned to respond to the need for enhanced levels of innovation and competitiveness services to small manufacturers. The advantages of the national SBDC network include:

Over 23 offices throughout New York State.

A network based in local institutions with established ties to the local business and economic development communities.

The proven confidence of the business community in the ability of the network to deliver new and revised programs has already been established.

Partnerships through institutions of higher education (many of which host SBDC locations) providing access to the most current sources of information and expertise.

SBDC staffs work with large numbers of these manufacturers in critical areas, assisting in providing access other federally funded manufacturing assistance.

SBDC staffs have a proven, demonstrated record of improving the managerial and financial performance of manufacturing firms.

SBDC staffs are explicitly engaged in educational activities which increase the management capacity of the firms to sustain those benefits over time.

WHAT CAN BE DONE?

State leadership, in support of enhanced competitiveness for manufacturers through innovation, is necessary. This leadership is necessary to ensure our economic future. The State has the authority and responsibility to develop and support programs targeted at meeting the innovation and competitiveness needs of New York’s small businesses.

Small businesses in New York represent over 96% of all businesses and include over 80% of the manufacturing firms. The leading firms of tomorrow are among the smaller firms of today. The SBA has the principal responsibility, among federal agencies, to serve this constituency. SBA serves the small business sector through resource partners, like the SBDC, that leverage state, local, private and critically higher education in that effort. The SBDC program, with 23 regional partners serving the region, is New York’s leading resource partner. The SBDC program is the leading state-endorsed (and connected) business assistance resource in locality throughout the state. The SBDC broad presence and extensive local connectivity to colleges and universities, local and state economic development resources and the private sector provides the foundational platform upon which to build an innovation and competitiveness strategy for New York’s manufacturing sector. SBDC offices serve a substantial number of small businesses each year, including a growing number of manufacturing and emerging technology-based businesses.

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PARTNERSHIPS:

The SBDC is well positioned to meet the needs of New York’s small to medium-sized manu-facturers while networking with existing federal, state and local servicing organizations. Overall, the SBDC is dedicated to enhanced and expanded cus-tomer service without unnecessary duplication.

SBDC staffs are linked to relevant public and private sources of assistance (financial as well as managerial) in their service areas.

SBDC staffs have established high quality standards of continuous improvement programs and have the ability, on a national basis, to identify and implement best practices.

PROGRAM DESCRIPTION:

The SBDC Manufacturing Innovation and Competitive Initiative would be built upon the following program foundation:

1. National training institutes that provide training to all

SBDC staff to facilitate their qualification for technology accreditation designation.

2. Best practices ‘toolkits’ developed, disseminated and regularly updated. Included would be; resources, training programs, consultative approaches and support resources for building a world class initiative.

3. Significant local assets and resources (colleges, universities, economic development organizations, trade associations, etc.) would be recruited and engaged in the state.

4. A locally based but common themed marketing program, targeted at small manufacturers, would be launched nationally.

5. Aggressive outreach, to increase the levels of innovation and competitiveness, would focus upon business advisement and training for manufacturers would be undertaken.

6. Ongoing professional development would be provided to SBDC staffs and other resource partners.

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OVERVIEW:

A number of factors underscore the importance of sustainable business practices for the U.S. economy. The World Wildlife Fund’s 2006 Living Planet Report found that the Earth’s resources are currently overused by 25%. The authors projected that demand for resources in 2050 would be twice as much as the Earth could provide. They noted that the U.S. has the second largest per capita ecological footprint in the world and that exhaustion of ecological assets and large-scale ecosystem collapse become increasingly likely as further international development occurs.

In February 2007, the Intergovernmental Panel on Climate Change (IPCC) released its Fourth Assessment which found that it was "very likely", or more than 90 percent probable, that human activities led by burning of carbon based fuels and land use explained most of the warming in the past 50 years. In addition, global events have resulted in significant increases in the cost of oil and natural resource commodities, underscoring the importance of energy policy and resource efficiency to our security. Within our borders, limited availability of natural gas, electrical generation and distribution capacity also has contributed to increases in energy costs. Small businesses are disproportionately impacted by increased energy, materials, and finished goods costs. Small Businesses typically operate on lower margins and smaller capital resources, unable to absorb increased costs. A recent PNC Economic Survey found that increasing energy costs are the top concern of young entrepreneurs. A 2006 NFIB Small Business Poll of expenses found that 10

percent of businesses reported energy costs as their top expense. 59 percent reported energy costs as one of their top five expenses. A 2006 Energy Survey by the National Small Business Association, 65% of small business reported that they were responding to increased energy costs by increasing prices, while 18% reported they were cutting workforce. These impacts on small businesses are significant and startling because:

Half of New York’s consists of small businesses America’s 25 million small businesses produce 51% of the nation’s private sector output and make 47% of all sales. Small business employs half of all private sector employees.

Small business consumes 48% of all electricity and 39% of all natural gas used for commercial and industrial purposes in the United States. One-third to one-half of this energy is needlessly wasted.

America’s capacity to actually reduce greenhouse gas emissions relies on small businesses that make, sell, install, and service the products that the task requires.

Technology innovations to combat global warming come mostly from entrepreneurial small businesses, and

Small business is by far the chief creator of new jobs

As awareness has grown about global climate change and the impact of human activities, a number of sustainability

EDUCATION. ENTREPRENEURSHIP. ECONOMIC DEVELOPMENT.

NYSSBDC Small Business Sustainability

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therefore, the benefits are sustainable over time.

SBDC staffs are linked to public and private sources of assistance (financial as well as managerial) in their service areas.

SBDC staffs have established high quality standards of continuous improvement programs in place to quickly identify and implement best practices.

SBDC staffs have a history and “culture” of engaging partners to meet the clients’ specialized needs.

The SBDC record of assisting small to medium-sized businesses in; marketing, financial management, strategic planning, personnel, capital formation and overall business planning, provide a gateway for expanded service delivery. Entrepreneurial SBDC programs around the country have established sophisticated offerings that utilize their statewide network to deliver specialized services in areas such as; regulatory compliance, pollution prevention, energy efficiency, technology/commercialization assistance, economic/demographic analysis, and international trade to name a few. This initiative proposes to utilize the existing SBDC network to efficiently and effectively expand capabilities to better support market transformation to sustainable

initiatives have been launched. Corporate Social Responsibility (CSR) has become widespread in corporations and is becoming a requirement for investment and access to capital from financial institutions. Yet, the small business community has been largely ignored. It is vital that small business be engaged in this market transformation. Energy savings achieved by small businesses represent billions of dollars that can be redirected into economic growth, saving and creating jobs, and controlling prices. Increased efficiencies in resource utilization can further contribute to global competitiveness and the economy. To respond, small businesses need help. SMALL BUSINESS DEVELOPMENT CENTERS (SBDC):

The SBDC is positioned to help meet this need, in a cost effective manner. The advantages of the SBDC network include:

Over 40 offices throughout New York State.

The SBDC network local institutions have established ties to the local business and economic development communities.

Proven confidence of the business community allows the network to deliver new and revised programs quickly and efficiently.

Partnerships through institutions of higher education allow SBDC staffs to access the most current sources of information and expertise.

SBDC staff work with large numbers (15,000) small businesses annually.

SBDC staffs have a proven, demonstrated record of improving the managerial and financial performance of small businesses.

SBDC staffs are engaged in educational activities which increase the management capacity of the firms;

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Commercial and residential buildings being constructed today will impact their occupants and communities for the next thirty years. Through an integrated design and construction process green buildings can provide healthier indoor environments that reduce healthcare costs, absenteeism, and improve productivity. The high performance characteristics of these buildings reduce energy demands and strengthen energy security. These buildings (and their grounds) use water more efficiently, incorporate recycled materials in design, and recycle and reuse construction and demolition wastes to conserve natural resources. Integrated design will incorporate storm water infiltration mechanisms that provide enhanced groundwater recharge, and minimize potential for flooding, and pollution of surface waters. The SBDC program can play a significant role in the adoption of green building practices by architectural, engineering, and construction contracting firms, assist in transformation of small business construction materials and furnishings, and encourage construction of “green” high performance buildings by clients engaged in financing new construction through the SBA 504 loan program.

The SBDC program can provide the necessary support to smaller to medium-sized firms to:

evaluate energy efficiency/green building

opportunities,

understand the cost benefits of the efficiency measures or green building,

secure financing to achieve energy efficiency or construction of green buildings,

empower management to implement energy efficiency projects.

This approach will provide an array of SBDC-delivered services to improve the energy management of small businesses, and engage small businesses in constructing high performance buildings: making them more competitive and reducing energy demands

small businesses, and develop clean technology entrepreneurs. It is proposed that SBDC program focus upon areas where there is a lack of resources to meet the needs of small businesses and provide services that are complimentary…. not duplicative.

TARGETED NEED AREAS:

Four distinct areas where SBDC programs can support sustainable businesses in New York State include Energy Efficiency, Green Building, Environmental Performance, and Clean Technology Entrepreneurial Assistance. Energy Efficiency/Green Building

One of the constraints small businesses have to deal with is the rapid escalation in the prices of energy (electricity and natural gas). Utility companies have introduced demand-side management programs, but those efforts have been concentrated on medium to larger companies. The reach and impact upon smaller firms, with incentives (rebates, discounted products and technical assistance)

have met with little success. Many small businesses occupy leased space, usually excluded. The SBDC program is uniquely situated to provide individual assistance to help these businesses and the property owner/manager to work together to implement energy efficiency improvements. The SBDC program, with the existing statewide network and through local partnerships, have the capability to engage small to medium-sized firms in identification and implementation of energy efficiency actions.

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electrical and electronic equipment containing lead, mercury, and cadmium, plus certain brominated flame retardants in the European Union, and the Waste Electrical and Electronic Equipment Directive (WEEE) which establishes producer financed "take-back" systems for demanufacture and reuse of equipment components are shifting the environmental landscape. International standards for Hazardous Substance Process Management have been adopted, and with other countries, and New York is working to establish chemical use legislation, additional restrictions on hazardous substances in products are expected. To be competitive in the future, small businesses will need to move beyond the focus on complying with environmental requirements to adapting the materials use, the processes they operate, and the products and services they produce. The SBDC program has proven effectiveness in helping businesses improve environmental performance by shifting to less hazardous materials and reducing waste and emissions at the source. The network of SBDCs and the established partnerships are well positioned to enhance the coordination and cooperation of these programs to minimize duplication, maximize the effectiveness of services and allow clients to operate more efficiently, at reduced or benign environmental impacts with cost-savings.

PARTNERSHIPS:

The SBDC Sustainability initiative would rely upon support from key associations and organizations. Potential partners would include the existing service delivery network and its educational institutions as well as associations of small and medium-sized businesses organized to promote the long-term success of the business sectors.

Clean Technology

By virtue of SBDC locations within institutions of higher education, SBDC programs are ideally positioned to assist entrepreneurs with clean technology development and sophisticated business management related to technology commercialization. Specific programmatic assistance provided in areas such as technology assessment, intellectual property, market assessments, SBIR submissions, strategic alliances, business model development, and preparation for investors. A number of SBDC programs have established technical assistance programs to support commercialization of new technologies. New York SBDC is well positioned and prepared to provide assistance in these areas with additional resources. The SBDC is well prepared to assist with the development of new businesses or transformation of existing small businesses, needed for installation and operations of clean technologies.

ENVIRONMENTAL PERFORMANCE:

Cumulatively small businesses consume significant natural resources as they produce 51% of the nation’s private sector output. Together they significantly impact the environment from wastes and emissions generated from their operations. However, these same businesses have significant opportunities to improve efficiency of materials utilization and reduce the amount of wastes or emissions generated through use of environmentally preferable purchasing policies, eliminating use of persistent, bioaccumulative and toxic chemicals, improving environmental management systems and deployment of clean technologies.

International chemical use policies such as the Restriction on Hazardous Substances Directive (RoHS), prohibit the sale of

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THE NEED: The changing age structure of the population of the United States is creating two significant challenges for the U.S. economy. First, as the baby boomers retire, a large proportion of them will be interested in starting full or part-time businesses to supplement their retirement income and to keep their lives more active. The continuing trend of corporate mergers and acquisitions leading to the shrinking of the manufacturing sector, will produce additional layoffs in the ‘boomer’ sector. In this context, middle and upper management and older workers, having difficulty finding comparable employment, often find self-employment an appealing alternative - perhaps the only alternative. Second, as older “boomers” who currently own a business retire, they will require assistance in developing exit strategies, succession or transition plans. This will be important, not only for the owner, but also for the business survival and the employment of those businesses. Especially in rural areas, the closure of these firms results in job losses and the loss of essential rural services, making the rural area less economically viable. The dimensions of these issues are significant. In 2005, 5.6 million workers age 50 and older were self employed, a 23 percent increase over 1990. By 2020, the number of Americans 50 and over will increase to 118 million. The rate of self employment increases with age, so at 50, the self-employment rate for males is 20 percent, and rapidly increasing for females. At 66, 39 percent of males are self employed.

THE PROGRAM: To address the problems related to the new entrepreneurial activities within the aging population, the SBDC network proposes the following:

Loss of Business or Employment Due to Owner Retirement

The SBDC is ideally positioned to address these needs due to the following The SBDC program provides quality services in rural as well as urban areas.

The SBDC staffs have expertise in providing assistance on exit strategies, succession planning, valuation, business transition and other disciplines required to affect a successful transfer of a business from the original owner/manager to the successor.

SBDC programs are part of local institutions and have the in-depth knowledge of the local business community to identify firms needing assistance.

The SBDC program is thoroughly networked with other public and private systems that support business development and retention.

SBDC staffs are knowledgeable of state, local and federal resources that might be employed in the acquisition/transition of an existing business.

The SBDC program operates complimentary programs to support continuing prosperity of transitioning firms (market development, international trade assistance, strategic planning, and manufacturing process improvement).

EDUCATION. ENTREPRENEURSHIP. ECONOMIC DEVELOPMENT.

Older Entrepreneur Assistance Program

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The SBDC program will identify and extend outreach to the firms and higher impact areas perceived to be in need of this type of assistance.

Dedicated SBDC advisors and training resources will be targeted toward business owners to assist in recognition and development of transition plans designed to keep the business operating profitably.

SBDC staffs will link the business owner with additional resource service providers to prepare the business for transition.

SBDC program will act to identify “business opportunities” for those interested in acquiring businesses. In this context, SBDC programs will take incremental and extraordinary steps to avoid conflict-of-interest.

SBDC staffs routinely help parties identify and acquire financing for acquisition.

SBDC programs provide continuing support once the transition has occurred.

Assistance in Self-Employment for Older Americans

The SBDC program is ideally positioned to serve this population. In addition to the excellent geographic coverage, certified skill sets, local recognition and acceptance, SBDC staffs have extensive knowledge of the service networks:

The SBDC staffs are the nationally recognized experts in small business.

SBDC staffs have the expertise to evaluate individuals and business models to determine if business ownership has a reasonable chance of success.

The SBDC staffs already have expertise in most areas projected to be of interest, such as; evaluation of franchise opportunities, business feasibility, business planning, recordkeeping and accounting, marketing, financial management, finance and other disciplines required to build a business.

The survival rates for businesses assisted by SBDC programs are significantly (80 percen) higher at five and

eight years than for firms started without SBDC assistance.

SBDC programs are known for their success in helping to prevent the loss of assets as they help individuals make the determination to start or purchase a business.

The SBDC programs, through their current networks and working very closely with associations such as the AARP, seek to provide outreach to older Americans to make them aware of the assistance available. The SBDC staffs would deploy training and educational screening processes to introduce this mature population to the potential benefits and hazards associated with self-employment, seeking to prepare the target older entrepreneurs for effective consulting engagements.

SBDC staff will develop courses, consulting processes (specifically for this age group) and highly targeted resource materials to facilitate understanding and preparation of these late-blooming entrepreneurs. It is anticipated that many of these businesses will be less than full-time enterprises and many will be small, intended only to generate a supplemental income. Specialized educational materials and specialized consulting/advisement skill sets will be developed and deployed throughout the SBDC network. This population also will have access to all the existing specialized programs and assistance available through the SBDC network.

SBDC programs will seek to provide logistical support and program management for those SCORE Chapters which choose to participate in this program. Increased partnering opportunities will be encouraged, SCORE staff will be sought to conduct outreach and training activities in agreement with SBDC educational planning.

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EDUCATION. ENTREPRENEURSHIP. ECONOMIC DEVELOPMENT.

Veterans Assistance and Services

STATEMENT/JUSTIFICATION OF NEED:

The Uniformed Services Employment and Reemployment Rights Act (USERRA) guarantees activated reservists the right to return to their pre-activation job following activation, providing the job still exists (emphasis added). It is estimated by the CBO that 6 percent of all business establishments employ reservists. CBO points out that smaller firms, the self-employed, and firms employing reservists with highly specialized skills are vulnerable to the negative economic impact attributable to activations. CBO (2005) estimates that about 6 percent of small businesses and 0.5 percent of self-employed individuals could be affected by the loss of a crucial employee (or owner) to activation. In addition, USA Today, July 14, 2006 ran an article detailing how young veterans, returning from Iraq and other tours of duty, aren't always coming back to a welcome from employers. The jobless rate for veterans between ages 20 and 24 was a startling 15.6%, more than three times the national unemployment rate of 5.1%. The jobless rate for all 20- to 24-year-olds that year was 8.7%. No one claims to know all the reasons behind the employment travails of returning veterans.

But some theories include:

Veterans want to take a break and either accept unemployment benefits or take advantage of GI Bill educational assistance to enroll in college or trade schools.

Some recent veterans are entering the workforce for the first time and aren't prepared to explain their military skills to civilian employers.

Some that saw combat in Iraq or Afghanistan suffer from post-traumatic stress disorder, which makes it difficult for them to work and makes employers leery of hiring them.

For all of these unemployed veterans (estimated at 28,000 in New York) and for the nearly 1,000 veterans in New York that were employed by small business when activated (defined as fewer than 25 employees for recent studies) or self-employed, this probable low estimate constitutes approximately 30,000 current veterans who will be re-entering the domestic economy that are potentially in need entrepreneurial and small business assistance as an option to successfully transition to civilian life.

DESCRIPTION OF TARGET AUDIENCE:

The ongoing Global War on Terrorism has resulted in the largest deployment of American service personnel since the Vietnam War. Large numbers of active-duty forces have been deployed overseas; large numbers of reservists have been activated and deployed overseas as well. These activations and deployments have an effect on the local economies and the personal economic well being of the service personnel involved. The overall effects of activations and deployments on total U.S. employment are not large. The U.S. economy employs about 126 million workers. The number of reservists activated or deployed for the Global War on Terrorism in 2003 (most recent date for confirmed numbers) at about 160,000, roughly 0.13 percent of the U.S. workforce. While the aggregate impact to the national economy is not large, the impact upon select communities in New York State and the individual service personnel are often significant. As noted earlier, an estimated 900 (probably an underestimate) deployed reservists from New York are self-employed, meaning that during their deployment their businesses are either not functioning or operating at greatly reduced levels due to their absence. There are another 100 reservists who are

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WHAT CAN BE DONE?

Given the historical interest of transitional military, those active duty service personnel who request entrepreneurial assistance during the final military assignments prior to discharge, it can be projected that between 15% and 35% of de-activated reservists and regular active duty departing military personnel may choose to explore entrepreneurism as a post-military career choice. The Small Business Development Center (SBDC) program has, since 1999, participated in a pilot program known as VBOP (Veteran’s Business Opportunity Program) to provide a combination of outreach, training and business advisement to veterans. Under VBOP, the SBDC program has developed targeted outreach to Veteran’s organizations, hospitals and military bases to seek out interested veterans and offer them dedicated assistance. This specialized and dedicated effort has generally increased the representation of veterans within the SBDC service delivery mix by 20% to 50%, depending upon geographic location, and resulted in the development of unique assistance tools that highlight the various veteran support groups and any targeted veteran service products such as procurement preferences and special loan products (the Military Reservist Economic Injury Disaster Loans).

Veterans interested in starting a business experience difficulty in obtaining financing and lack access to small business programs to assist them. The services the SBDC program provides to meet the needs of the veteran small business sector are similar to any client who comes into the center. Evaluate business ideas

Help veterans focus on the details of their plans

Assist veterans to write a business plan, to be shown to financing entities

Provide veterans with research on their business ideas

Introduce veterans to financing opportunities

Build the veteran’s capacity to benchmark operations for long-term survival of the business

The special challenges for service-disabled veterans of business ownership and the importance of Internet use in business to these veterans.

More than one third of the new veteran entrepreneurs gained skills from their active duty service, i.e. technological training, that are directly relevant to business ownership

key employees within small businesses, whose absence places extra burden upon the smaller firms. These two primary groups, along with the 28,000 unemployed veterans who may be motivated to create their own employment opportunities through entrepreneurism round out the target market for veteran assistance. Given that 5% of Americans in general are entrepreneurial and own or operate their own small business with employees (1,400), and an additional 14% are sole proprietorships (3,900), an estimate of the number of these unemployed veterans that would be added to this primary target market would be 5,300. These potentially veteran-owned businesses would be very important to the unemployed veterans because veteran-owned businesses with employees (1,400) tend to be more veteran ‘friendly’ employment opportunities and could be estimated to hire approximately 3.5 (4,900 new employment opportunities) veterans from the unemployment roles for each business started. Additionally, the primary target group of service-disabled veterans would be identified for services. Based upon a recently released study by the SBA’s Office of Advocacy, service-disabled veterans are self-employed at a rate significantly lower than the veteran population as a whole. The Office of Advocacy study indicates that the discrepancy is at least 25% and up to 50% lower, with the only discernable differential being service related disability. Finally, reservist veterans from New York’s smaller and often rural communities suffer economic injury in a much more significant manner than more urban areas, largely due to the relative proportion of veterans in the community. A Los Angeles Times article (Mehren, 2005) described the impact of reserve activations on local communities in Vermont, a state with an unusually high proportion of its population serving on active duty as reservists. The story describes the effect of having 88 men deployed from the rural town of Enosburg Falls, Vermont which, at the time the article was written, had a population of only 1,437; those 88 men represent about a quarter of prime-age males. This impact, when coupled with the oft publicized youth drain from rural America, helps multiply the adverse economic conditions experienced by returning veterans.

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Many veterans will require special accommodations to take advantage of services. By placing a greater emphasis upon technology-assisted online counseling and distance learning technology, the special needs of those disabled veterans and those on active duty overseas (who have access to a computer and have down time to work towards opening a small business) can be met. SBDC programs have been slowly implementing these technologies as resources permit. Finally, greater coordination among organizations seeking to assist veterans should be proposed. There needs to be more of a one-stop point of contact for veteran entrepreneurs and small business owners. This integration of service providers and offerings can be virtual as long as we ensure that a veteran entering the system at any point has access to all assistance points.

KEY PARTNERSHIPS:

There are several key partners that should be enjoined in this effort. The banks, (commercial lenders) must be a part of the partnership to provide a broad financial infusion in the form of loans and other banking instruments to veteran small businesses. Agencies, such as the Department of Veterans Affairs, the Veterans Administration, Veteran Organizations, the Department of Labor and the Department of Defense can be critical in transmitting information to veterans that highlight the place to go if the veteran wants to open or expand a small business.

The unique SBDC selling points

A onal network of dedicated and certified advisors

Strong connections with all sectors of the government and non-government communities.

Expertise in evaluating business ideas, providing direction and guidance and monitoring the business growth and development.

A research network, tied to higher education, which assists in the business’ marketing and development

Assistance in government procurement, marketing and certification.

A commitment to work with the veteran, until their business needs are met.

Existing special resources and a history of proven service delivery (Veterans Resource and Business Planning Guide. The document includes a survey of basic business concepts as well a step-by-step template for writing a successful business plan. The Guide is used in tandem with one-on-one business advisement.)

PRODUCT DESCRIPTION:

There is a need to create a major marketing campaign; targeting veterans, disabled veterans, military units, government agencies (i.e. Veterans Administration, Department of Labor and the Department of Defense as well as veteran organizations) to make these organizations aware and educated about the business services available to through the SBDC. Consistent with the SBDC effort to meet the veterans’ community special needs, there should be an initiative to provide state assisted loans for veterans to start, restart or expand their businesses or help finance improved profitability for existing business. The parameters of these loans should be more character-based, reduced interest, and higher guarantee rates to ease credit requirements while lessening equity and collateral requirements. Veterans who wish to create, manage and grow their own small businesses are disadvantage because of the demands of military service, including frequent moves, sometimes for significant periods of time, often at remote locations and at sea, making it difficult to maintain business and financial relationships within a community.

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