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One-Stop Shopping for Entrepreneurs
In his new role, consultant Schwenzer wants to be at the center of new business development
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Business New Haven
9/22/1997
By: BNH
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Richard W. Schwenzer of Hamden is director and lead business consultant of the new Regional Business Resource Center in New Haven, which opened September 9 to provide resources and solutions to foster the development of small businesses in New Haven and 13 surrounding communities. Schwenzer previously owned and managed a business-management and personnel-placement business and served on the extension faculties of the University of Connecticut and Cornell University.
Describe the Regional Business Resource Center and what it will do.
The center is to act as a clearinghouse - sort of a one-stop center - for small businesses in the New Haven region. It provides resources including a business reference library; a computer lab equipped with ten PCs, which have on them a number of types of business software to create a business plan - Dun & Bradstreet Market Data, Business Locator and basic data from D&B on all types of businesses around the country. We also have software that allows people to design everything from a personnel policy handbook to business forms, etc. Use of our computers as well as our reference library and all our other services are free to small businesses in our region. In addition we have videos on a number of marketing topics as well as how to start your own business, how to develop a business plan.
Who will use the center, and for what?
We are geared toward both prospective and current business owners. Prospective business-owners are often looking for help on how to start a business, how to create a business plan, where to get registered, tax laws, loan resources, that type of thing. Current business owners are looking for help to stabilize their businesses by looking at better cost-control, developing new marketing approaches, initiating new product development, undertaking a cost analysis or even computerizing a manual accounting system.
Where did the impetus for creating this center come from?
In terms of this particular center, some of the key players were BankBoston, the New Haven Enterprise Communities, the [Regional] Workforce Development Board, the Community Economic Development Fund [CEDF]. Later on in the process SCORE [the Senior Corps of Retired Executives] got involved and will provide volunteer consultants as needed. SNET is one of our partners.
Who is paying for this, in addition to your 'partners'?
Federal funding is HUD money coming through New Haven Enterprise Communities - that's $50,000. In terms of corporate support, I'm not sure they'd appreciate my revealing [the extent of their financial participation]. The Workforce Development Board gives us space and access to personnel; the dollar value of their contribution probably exceeds that of the other partners. The U.S. Small Business Administration [SBA] has donated our entire business reference library and software. BankBoston gave us dollars. SNET gave us an Internet connection, connectivity and maintenance for one year.
Is the city's Office of Business Development involved?
Not as a partner. Not at all.
How is it similar and different from Hartford's Business Information Center (BIC)?
We are probably going to do a lot more hands-on technical assistance where we actually track and have an ongoing relationship with a business client. I view the Hartford BIC as more of a physical resource center with preliminary counseling but without as intensive a long-term [relationship] with clients.
What are the biggest challenges of starting a business in an urban area? Access to capital?
That's one of the biggest concerns for start-ups. We've already begun to do some consulting for clients in the city of New Haven. I think I can say that these are people who have very limited capital and in some cases very poor credit histories - and yet have the basic skills and personal characteristics and perhaps a product idea that has a lot of merit. But they have to overcome that hurdle of finding a loan source. There are other things unique to most any urban situation: security and crime rate - and the drug problems that create them - which are a deterrent to doing business in most urban areas in the U.S. One of the things we need to do is to create more service-oriented businesses. In New Haven, many neighborhoods have very minimal consumer services - food stores, drugstores, dry cleaners. And many times [residents] don't own a car and it's not handy to go halfway across town. You're keeping cash within the neighborhood; you're also creating jobs. That's why we need to establish more businesses in the city.
But it's also more difficult to get skilled workers in cities.
Exactly. That's why we interface with an agency like the Workforce Development Board [which trains and retrains prospective workers], and then we work with the potential employer - to establish an economically viable business and in turn work with the [RWDB] to establish, for instance, a retail workers training program. That's the way it ought to work. The more businesses you create, and the more of these blocks become filled rather than vacant storefronts, the less likely it is for crime to proliferate. And it enhances the tax base of the city.
Where might you direct a budding entrepreneur with a good idea but no money?
One place might be the Community Economic Development Fund, depending on what their capital needs might be. One of the things they specialize in is loans that are unbankable.
CEDF lends up to $100,000?
I think so. Generally they are not huge loans. Sometimes you can work other kinds of joint projects where, if you had several businesses you were trying to establish in a given area, you might work with DECD [the state's Department of Economic & Community Development], which has now established a permanent office in New Haven. They might do some of these projects where they make available funds to do a whole commercial block. Plus, one of their major thrusts is manufacturing.
Are there banks will to come in with second-tier financing once a business has gotten some funding from a quasi-public agency such as you've described?
Sometimes they will get involved - for instance, through some of the SBA pre-qualifying programs that they have now. Two of them are for women-owned and minority-owned businesses. There's a pre-qualification program in which [borrowers] can go directly through the SBA process and get a letter of approval to walk into a bank. It then guarantees that SBA will back that loan to that individual without the person having to go through the bank. Some of these programs will take a person who might have a questionable credit record but doesn't have terrible credit. Also, the New Haven Community Investment Corp. will do SBA 'micro-loans' [of less than $50,000]. My evaluation at this point is that we don't lack for loan programs. I think what we need [to provide] is technical assistance to help that businessperson be ready with a fundable, bankable business plan that will get them the capital they need.
How do you plan to get prospective clients in the door, other than by talking to people like us?
One of the ways is to begin to touch bases and have personal meetings with merchants' associations, of which there are a number in New Haven. Also by meeting with the various economic-development corporations and enterprise communities. Thirdly: meeting with the economic-development commissions in the 13 surrounding towns to let them know what our services are and inviting them to visit the center.
If I come back a year from today, by what criteria will you have measured your success or failure in your first year?
How many people came through our doors and used our computer lab, used our reference library? How many people actually were clients and were consulted here? Probably more important is: How many business plans were completed, and how many businesses actually were started up as a result of this? How many businesses did we help to expand by helping them develop a new product, or a new marketing plan? Were we able to help an [existing] business improve its bottom line, or reduce its operating costs? In the ten-plus years I was a management consultant, that's how I measured my success.
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