Founder Focused Economic Development: 5 Keys to Small Business Success
5 Keys to Small Business Success
Almost every city in America—large and small, rural and urban, coastal and inland—is looking for new and creative ways to attract and grow new small businesses in their communities. Small businesses are the backbone of the American economy and provide several critical resources to the health of a city including job creation, revenues to pay for city services, and creating a high quality of life through quality goods and services. But small businesses need support to survive and thrive; and, most cities are failing to provide the key support services that are needed to grow their local small business economy.
5 Keys to Small Business Success
Although I am now a venture capital investor in the private sector, I spent the last 20 years of my professional life in public service, most recently as the Director of Economic Development for the City of Long Beach, CA where we launched several new initiatives to attract and grow dozens of new technology startup companies to our city through the Long Beach Accelerator. Here are 5 Keys to small business success that every city can implement:
- Talent: talent is the most important resource in the information economy. Every city must partner with their education system—elementary, high school, community college, or university to develop the talent that new and existing companies need to feed their growth. The largest and most successful companies cluster around talent.
- Capital: new and existing businesses need financial capital to survive and grow. Cities can form partnerships with both government, non-profit, and private sector lenders to make capital—both debt and equity—more accessible to small businesses.
- Navigation: the licensing and permitting process can be very confusing for new and existing small businesses to start and grow. Providing a business ombudsman in city hall can streamline the process of registration, licensing, permitting, or other approvals for small businesses and make it easier for them to get started or to grow.
- Coaching: often, starting or growing a business is something that we only do once in our lives. Creating a network of experienced business owners to mentor, coach, and support new or existing small businesses is an incredibly valuable resource that often comes for free through federal and state-funded programs or volunteer business associations.
- Partnerships: each sector of the economy—public, private, and non-profit—play different roles and provide different resources for small businesses. By forming public-private-education partnerships around small business development, cities can leverage resources across sectors and support new and existing entrepreneurs in new and creative ways that they can’t deliver on their own.
Through innovative public-private-education partnerships between the city government, local university, and private venture capital investor, we were able to attract over 40 new technology startups in just three years in the City of Long Beach. Each sector plays a different role in talent production, navigational support, mentoring, and capital investment to meet the needs of new and existing small businesses. Working across sectors creates leverage to strengthen the chances of success.
How Can Business and Government Partner to Growth the Economy?
In a previous week, I shared more about how business and government can work together to create economic development (read more at How Government & Business Work Together). Not surprisingly, state and local governments that invest in top tier education, research, and development strategies also attract and develop the best students, faculty, and investors from around the world. These economic leaders provide a roadmap of how governments can partner with business to drive innovation and economic growth. A true public-private partnership.
Public-Private Partnerships will Shape the Economy
At Sunstone Management, we believe in the powerful combination of government AND business to create economic growth. As demonstrated by the public-private partnerships we are building with the publicly-funded California State University (CSU) system (see CSU Demo Day Powered by Sunstone), we intends to donate $1M over 5 years to programs that support early-stage entrepreneurs, help students start new businesses, and grow job opportunities for the California economy.
Economic development is a partnership between both government and the private sectors. As demonstrated by the growth in GDP per capita, connecting public universities with private sector investment is a time-tested strategy to stimulate economic development and create a higher standard of living for the community.
More About Sunstone Management
Sunstone Management is an early-stage venture capital investment firm located in Southern California dedicated to building great companies through creative public-private partnerships. If you believe in a similar investment philosophy, we encourage you to join the Sunstone Community today. We are always seeking great Founders, Funders, and Friends to advance our vision for the economy and the world around us. You can visit our website at sunstoneinvestment.com for more information or follow us on social media for upcoming events and announcements at LinkedIn, Twitter and Facebook.