Economic Gardening: A New Tool Helping Businesses Grow and Expand

Economic Gardening WorkshopPenny Lewandowski

Vice President, EntrepreneurshipEdward Lowe Foundation

[email protected]

Imagene HarrisManager, Economic Programs

Network [email protected]

Edward Lowe Foundation copyright 2015

mailto:[email protected]

Introductions

• Name• Organization,

location, your role


Session Objectives

• Getting to know each other• The importance of second-stage companies• What is Economic Gardening• Practical applications from rural Kansas• Investigating the Commodity Trap• Starting a pilot program


Guidelines

• Cell phones off or on stun• Step away from email and voicemail• Manage your own biological functions• We’re here as peers to learn from each other• Speak from experience rather than giving

advice



Unique Things

Stating the Case

Growth companies are absolutely critical to the success of our economies, and it is

time to develop policies that drive towards a more balanced approach in

economic development to ensure these companies have their fair share of

resources to grow.


Nationally recognized expert in understanding growth companies

• Operating Foundation– National – 42 States– SW Michigan HQ 2600 acres– Retreat and Conference Center– Land stewardship

• Approach to entrepreneurship– Entrepreneur Support Orgs– Second-stage Entrepreneurs– Economic Gardening


EG Philosophy

• Loving those who loved you first

• Growing your economies from the inside out

• A balanced approach between start-ups/recruiting and growth companies


• Past startup – with proven model

• Intent and capacity for growth

• Privately-held• 10-99 employees

• 1-50 Million in revenue• Includes high growth, high potential and steady

growth

Increaseattention on growthcompanies


Not all Businesses are Created Equal


Why Second-Stage Companies?Because we believe they have the greatest positive

impact on the economy

• Create jobs• Increase volume of income into the region• Attract outside capital • Attract companies and talent• Drive culture• Affect philanthropy


Monroe MSA, Louisiana 2009-2013

Percentage of Companies Jobs Represented


Monroe MSA, Louisiana 2009-2013

Percentage of Companies Sales Represented


What Causes Growth

It is not industry and location that

cause growth. It’s what happens

inside the company.


Company Stages Don’t Look Alike

• Second-stage companies require different services

• Need to feel loved• They thrive on

information – the new incentive



Questions?

Economic Gardening

An entrepreneurial approach to economic developmentfocused on growing local stage-two companies

with external markets

Copyright Edward Lowe 2015

Proven Model With Deep Roots

• 28 year roots in Littleton, CO

• 28 networks in 23 states


What is it?

• Hosted at state or regional level• Delivered virtually by national team of experts• Provides critical strategic information in

– Market research– Geographic Information Systems– Digital marketing– Core business model


What it is Not

• No operational issues

• No consultants• Not an ongoing

subsidy


Results

• Alpha Precision Aerospace– 700 potential customers– 10 new jobs– Double 2013 revenue by fall 2016

• B&F Fasteners– Two new locations– Cut time to open by 50%


Testimonial

Porch SwingNetwork Kansas


Who’s On the National Team?

• Team Leader: Helps identify core issues and coordinates specialists to find information

• Specialists: Private-sector experts across the country

Copyright Edward Lowe 2015

Training and Certification

• All specialists must have past experience• Trained in the EG process• Team Leaders must have proven past working

with entrepreneurs• Online training• 4 day in-person training• 6 to 12 month mentoring process


Let’s Get SpecificWhat Do Companies Have Access To?

• Industry trends• Competitor intelligence• New product releases• GIS computer maps of

customers, competitors, potential markets, trade areas

• Search engine optimization, social media, digital marketing


Examples

• HED Cycling– Business model– Commodity versus innovation

• Applied Energy Systems – New customer– 30% revenue increase– 4 new jobs


What Actually Happens?

• Initial call with team leader• Team clarification call• Tasks assigned to specialists• Information accessed online• Specialists call to discuss and ensure clarity• Team leader conducts check-in calls• Team leader conducts close-out call


How Much Time Will It Take?

• Engagements run at the speed of the CEO

• CEO will spend about 8 to 12 hours.


Post Engagement Follow UpMissing Puzzle Piece

• Assistance in sifting through information and implementing

• Connections to essential service providers

• Second-round engagement


Not a Silver BulletBut we are very good at what we do!

• 28 year roots • Structure in place• NSRT works

together• Quality control


ROI• Kansas (2 years)

– Revenue grew 16% compared to 2% and .5%– Jobs grew by 19% compared to 2.5% and 2%

• Minneapolis (2nd program year)– 36% increase in job creation

• Florida (2 years)– 3,745 jobs and $588M to the economy– $7.58 for every $1

• Rochester (18 months)– 20 companies – 177 new jobs -- $1,700/job

• Michigan (2 years)– Increased external market activity by 45%


"That's a fantastic return by any economic development measure. In fact, it's probably a better ROI than almost any economic development incentive package in the country.”

…Mark Peterson, CEO Greater Rochester Enterprise



Questions

Core StrategyWith Chris Gibbons



Discussion & Questions

NETWORK KANSASECONOMIC GARDENING

Imagene HarrisManager, Economic Programs

Network [email protected]



Questions?

Developing a Pilot Program

• Great way to test drive the concept or launch a program!– Immediately serves local

companies– Low infrastructure costs– Sub contractor

agreement with ELF/National Center


Pilot Program

• Great way to test drive the concept or launch a program!

• Immediately serves companies• Low infrastructure costs


Contracting For a Pilot Program

• License with the Edward Lowe Foundation• Five company minimum• Typical engagement – 36 hours at $115 per

hour• $150 set up fee per company• Total of $4,290 per company


Roles and Responsibilities


Funding a Program


The Power of Partnerships

• More companies• More money• More visibility• More success

stories• More excitement


PartnershipsSuccess Lies In The Ideal Match

• Access to money does not always means access to the right companies.

• Access to the right companies does not always means access to money.



“Those who cannot change their minds, cannot change anything.”

… George Bernard Shaw

Thank You!

Additional Questions?


Government & Nonprofit

Economic Gardening: A New Tool Helping Businesses Grow and Expand