Entrepreneurship Initiative Approved Projects: Kentucky
PROJECT: Appalachian Development Alliance Strategic Plan
Description: The Appalachian Development Alliance is a new non-profit corporation composed of eight community development organizations that have historically served Kentucky's Appalachian counties. ARC funds will be used to retain a management consultant to assist in the development of a strategic plan. Projected outcomes include the involvement of 100 participants and the creation of 100 new jobs. Additionally, the grantee will serve 8 businesses.
Description: The grantee will provide entrepreneurial training for the staff and clients of the three (3) satellite offices of the Innovation and Commercialization Centers (ICC) located in Eastern Kentucky. The mission of the ICC offices is to be a "virtual incubator," working with investors and service providers to provide the training, technical assistance and related support needed to create and grow entrepreneurial companies in Kentucky. Specifically, the KSTC will provide the ICC offices with: information and materials on the specific needs of rural entrepreneurial companies; on-site entrepreneurial training programs for the three (3) ICC satellite offices located in Eastern Kentucky; a process to enable the ICC offices to have access to electronic follow-up information; remote consulting assistance workshops on valuation, business planning and strategy, finance and capitalization. A summer internship will also expose college and university students to entrepreneurship. The grantee plans to serve 16 businesses.
PROJECT: Appalachian Kentucky Entrepreneurship Initiative
Description: Technical assistance services for entrepreneurial companies will be provided by a contract consultant procured through a competitive selection process. The contractor will work with entrepreneurs to maximize their ability to engage in additional business activity. Support will be provided in the following areas: management, workforce skills, facilities and equipment, product development, and financing. Ten to twelve of these firms will receive a detailed market analysis of their products. Four to six of the firms will receive intensive consulting support. These services will be complemented by the training and business assistance services offered by the State of Kentucky. Approximately 24 to 30 entrepreneurial firms will be solicited for participation in the program, and fourteen to eighteen firms will be selected to participate based on criteria developed by the contractor and the state of Kentucky.
Description: The grantee will develop a comprehensive regional marketing plan to increase the sales of Appalshop art-related products to Appalachian residents, out-migrants and tourists. Specifically, the granteee will hire a marketing consultant who will develop a strategy for Appalshop to reach out to new and existing customers and retailers. During Phase II, the grantee will provide the funding needed for the consultant to design new packaging for Appalshop products, create new display units that will showcase Appalshop products, and produce new Appalshop promotional materials.
PROJECT: Eastern Kentucky Entrepreneurial Institute
Description: The grantee was unable to complete the scope of work because of staff turnover and change of the organization's work program. Consequently, the grantee did not draw upon any ARC funds for this project. Despite the early closure of the project, the grantee was able to assist a group of 6 teen entrepreneurs in their creation of a web design service for dozens of businesses throughout the nation. They were recognized in Young Biz Magazine as #84 out of the top 100 youth entrepreneurs for 2001.
Description: The grantee undertook a range of activities to promote entrepreneurship education among member ACA schools, including: development of an on-line college entrepreneurship resource center; hosting of 12 colleges participation in three business symposiums / technology summits; and the ultimate formation of the Appalachian Collegiate Business Programs Association. This new group plans to continue the dialogue opened among 17 participating private business programs in the region.
Description: This project will create a major new gateway attraction on I-75 by developing a driving tour to cultural/heritage attractions and artisan businesses in the target area. This pilot project will result in the distribution of information on regional cultural and heritage locations through three mediums: an interactive Geographic Information System (GIS) kiosk located at the Berea visitors center; 2) a web site providing access to area crafts businesses; and 3) a hard copy map set of cultural and heritage attractions. The grantee will work with local communities and business associations to identify sites and businesses of interest. The Kentucky Cabinet for Tourism Development will promote the final products. Projected outcomes of the project for the grant period include the participation of 175 residents in the program development process, 8 new businesses started, 12 new jobs, and 15 business expansions.
Description: The Kentucky Artisan Heritage Trails (KAHT) will expand to 12 new counties (11 of which are distressed) from the existing four county program. This Phase will also include implementation of a web-based training program for KAHT participants. The program has created a major new gateway attraction on I-75 by developing a driving tour to cultural/heritage attractions and artisan businesses in the target area. The project distributes information on regional cultural and heritage locations through three mediums: an interactive Geographic Information System (GIS) kiosk located at the Berea visitors center; 2) a web site providing access to area crafts businesses; and 3) a hard copy map set of cultural and heritage attractions. The grantee works with local communities and business associations to identify sites and businesses of interest. The final products are promoted by the Kentucky Cabinet for Tourism Development. Over 300 businesses will participate in Phase II of this program, and 20 new businesses are projected to be created. ARC funds will be used to support staff costs, web site development, production of promotional materials, program evaluation and community involvement.
PROJECT: KY Artisan Heritage Trails, Phase III
Description: The grantee will add seventeen new counties to the sixteen counties currently operating in the program. Phase I and II of the program has created a major new gateway attraction on I-75 by developing a driving tour to cultural / heritage attractions and artisan businesses in the target area. The project distributes information on regional cultural and heritage locations through three mediums: an interactive Geographic Information System (GIS) kiosk located at the Berea visitors center; 2) a web site providing access to area crafts businesses; and 3) a hard copy map set of cultural and heritage attractions. The grantee works with local communities and business associations to identify sites and businesses of interest. The final products are promoted by the Kentucky Cabinet for Tourism Development. ARC funds will be used to continue support for staff costs, web site development/expansion, on-line participant training courses, marketing of the web-site and program, production of promotional materials, program evaluation and community involvement. The grantee plans to serve 112 businesses.
PROJECT: Kentucky Highlands Business Planning Center – The Launching Pad
Description: The Launching Pad offers two levels of business planning and technical assistance to entrepreneurial or small business entities. The grantee works with newly created businesses, guiding them through the business planning process. In addition, the grantee provides technical assistance for business planning to existing entrepreneurial businesses for a maximum of two years. Technical assistance is also provided to community based, non-manufacturing start-up businesses, as a strategy to create stable employment opportunities. This project also uses grant and matching funds to create a seed capital revolving loan fund to provide financial capital to start-up and expanding businesses participating in the Launching Pad program. Start-up firms have priority access to funds.
Completed outcomes of the project for the grant period include: providing support to 15 different businesses, four of which were startups, and helping to create a net of 33 new jobs. In addition, $1M in revolving loan commitments has been directly provided to developing businesses by the grantee.
PROJECT: Kentucky Wood Products Training Program
Description: A collaboration between the State of Kentucky, Harlan County Fiscal Court, and the private sector developed a targeted training program for a new advanced manufacturing components company, Kentucky Wood Manufacturing Inc. This new firm provided cost effective supply inputs to struggling upholstered furniture manufactures in the region, improving the industry's competitiveness in national markets. The Kentucky Wood Products Corporation (KWPCC—a non-profit entity), provided targeted training of new employees and marketing support for the new company, Kentucky Wood Manufacturing Inc (KWM). ARC funds were used to support the marketing and training costs of KWPCC, which will be leveraged by investments from Bluegrass State Skills training program, the Kentucky Welfare to Work program, and the Kentucky Development Authority. Once employees are sufficiently trained, they will be hired by Kentucky Wood Manufacturing Inc. During the grant period Kentucky Wood Manufacturing trained and hired 22 employees (retaining 16), shipped over $250,000 in furniture components, and booked over $1M in orders. KWM anticipates expanding the workforce to a staff of 47 persons within the next two years, and has acquired an option on an industrial site in Harlan County to accommodate this expansion.
Description: The Appalachian Regional Commission (ARC), in partnership with the U.S. Department of Education, developed the Appalachian Youth Entrepreneurship Education "springboard" Awards competition to recognize outstanding youth entrepreneurship education programs. Youth education programs—targeted to rural areas—often serve as a "springboard" for Appalachian residents to launch their own businesses, creating jobs in their communities, and further diversifying and strengthening the Region's economy. Six awards were provided to the best youth entrepreneurship education programs in Appalachia. Finalists have been recommended by an independent review panel, and were selected by ARC to each receive a $2,000 grant award. The grant awards will enable the winning teachers to support continued work in youth entrepreneurship, and the school or parent organization receives a commemorative plaque. A teacher and a selected student from each finalist received these awards in Washington, DC, at the March 17, 2003 Annual Meeting of the Development Districts Association of Appalachia.
Description: The grantee will implement and expand an entrepreneurship program throughout the Monroe County School District. Specifically, ARC funds will be used to support a coordinator to organize the instructors and manage the program. Projected outcomes include the involvement of 100 participants, the creation of 5 new businesses, and the creation of 5 new jobs.
PROJECT: Next Generation Entrepreneurial Schools (Next Generation)
Description: Two Appalachian school districts will be selected to test and infuse Next Generation strategies into the operations of their districts. Districts will become eligible to apply through participation in a region-wide awareness program for Kentucky ARC counties. Entrepreneurial problem-solving mechanisms (developed and tested for Appalachia) will be available to Appalachian school districts to help students compete in the global marketplace. Two pilot Appalachian school districts will benefit from the infusion of an entrepreneurial environment into their curricula.
Description: The Owsley County Fund for Excellence assists and supervises Owsley County High School students in establishing and running a mini-mall with four entrepreneurial businesses: a consignment store with used toys, games and software; a school and office store; a store stocked with decorative items from another student run business, Teenagers' Dream Company; and desktop publishing. Teenagers' Dream Company was started last year by the Class of 2003 and has had modest success selling in regional craft shops and local retailers. The school and office store stock items generally not carried by any of the local merchants, such as printer cartridges and copy paper. Students will staff the store, monitor inventory, keep books, and calculate and pay salaries, all under the supervision of the Owsley County Fund for Excellence. The Fund for Excellence also works with the local schools in implementing the EDGE entrepreneurship curriculum, training teachers as well as providing instruction of students. The project saw a dramatic increase in the high school graduation rate, from a four-year average of 61% to 77%. This increase is likely due in part to student participation in this project. Additionally, several of the store employees have found other employment as a result of their experience at the store.
PROJECT: Small Farm Entrepreneurial Development in Appalachian Kentucky
Description: This project involves six elements: develop materials for training; deliver 6-7 training sessions on both feasibility analysis and business plan development in each of two locations (one in the Morehead area and one in the London/Somerset area); provide follow-up consultation with participants; provide leadership and group skill training to participants (linked with the Kellogg Foundation-funded Learning Communities Project); organize an "Ideas Marketplace" to showcase and promote results; and prepare an analysis of support needed to assist farm-based entrepreneurs.
Completed outcomes of the project included the creation of 7 new business start-ups by 7 farm-cooperative extension agent teams, with 17 total participants. This business creation included the preparation of feasibility studies, development of business plans, and ongoing business counseling from the extension agents.
Purpose: This activity will support critical industrial sectors in Southeast Kentucky; value added wood products and houseboat manufacture.
Description: The Center has formed a consortium of industries, economic development organizations and existing associations to provide support to the value added wood products and houseboat industries in the target region. The grantee produced an instructional customer education video, in partnership with 12 regional boat builders, that is now in use by most members of the industry. In addition the grantee held two training seminars for industry members, one on tax management and one on plant safety. The grantee also invited the national trade association (National Marine Manufacturers Assn) to form a local chapter in the area, resulting in 10 of 13 local manufacturers participating in a national certification program.
PROJECT: Southern Appalachian Fund New Market Venture Capital Company
Description: The grantee will invest the grant funds in the Southern Appalachian Fund (SAF), a conditionally approved SBA New Markets Venture Capital Company. SAF is a community development venture capital fund providing equity for seed, early stage, and growth companies in distressed areas of Appalachian Alabama, Georgia, Kentucky, Mississippi, and Tennessee. The General Partners for the fund are the Kentucky Highlands Investment Corp and Southeast Community Capital (the finance affiliate of Technology2020). ARC funds will be used to capitalize the corpus of the Fund. The Fund anticipates investing in 27 businesses resulting in the creation of over 500 jobs. The Fund expects to leverage $18M of other financing for these portfolio firms.
PROJECT: Strategic Capital Fund
Description: The fund seeks to attract commercial capital to business deals, marry equity with debt, and take positions smaller then those frequently taken by venture capitalists. An Investment Advisory Board composed of individuals knowledgeable in the field of equity investing was formed to review Fund investments. MACED's business development program finances development projects which provide jobs and housing to low income people in Central Appalachia. MACED and companies it manages have loaned or leveraged $23.5M over the past 10 years to 18 enterprises, creating more than 1,600 direct jobs.. The grantee hosted a two-day conference on community venture capital conducted by Josh Learner, Harvard Business School, involving attendees from developing VC funds from the Appalachian region.. The grantee assisted / mentored the Natural Capital Investment Fund (NCIF) in West Virginia throughout its start-up phase. Twenty requests for investment were identified in Kentucky and seven were identified in West Virginia (in partnership with NCIF). Three investments were made, two in Kentucky and one in West Virginia. These three investments of $450,000 leveraged an additional $7.8M and are projected to create 193 jobs. The grantee has undergone significant managerial change over the last two years, and is currently reviewing its organizational strategy, including future directions for equity investing.
PROJECT: Strategic Capital Fund, Revision
Description: The Strategic Capital Fund provides needed capital to developing businesses in Appalachian Kentucky and West Virginia, and serves as a model to demonstrate the use of strategic equity for creative deal structuring. The fund finances working capital needs, inventory, receivables, marketing support and other operating needs. This project involves a unique partnership between MACED in Kentucky and the Freshwater Institute in West Virginia, a partnership in which MACED acts as a mentor to development finance programming at Freshwater. The grantee hosted a two-day conference on community venture capital conducted by Josh Learner, Harvard Business School, involving attendees from developing VC funds from the Appalachian region.. The grantee assisted / mentored the Natural Capital Investment Fund (NCIF) in West Virginia throughout its start-up phase. Twenty requests for investment were identified in Kentucky and seven were identified in West Virginia (in partnership with NCIF). Three investments were made, two in Kentucky and one in West Virginia. These three investments of $450,000 leveraged an additional $7.8M and are projected to create 193 jobs. The grantee has undergone significant managerial change over the last two years, and is currently reviewing its organizational strategy, including future directions for equity investing.
PROJECT: Student Entrepreneurship Center
Description: The Student Entrepreneurship Center of Forward in the Fifth provides services to schools and communities to teach youth entrepreneurship and workforce skills. This project complements a wide array of programs that Forward in the Fifth provides, including; leadership curriculum for eighth grade students; professional development opportunities for teachers; information to regional schools regarding existing programs/organizations in their area; and an after school entrepreneurship curriculum for high school students.
Completed outcomes for the grant period include: 170 eighth grade students from nine schools participated in a Student Leadership Initiative Program led by 20 adults, 18 students attended a summer leadership program designed for rising ninth graders, and three schools participated in a high school entrepreneurship education program, EDGE. Additionally, more than a dozen student businesses were formed, including businesses selling gifts, make-up, jewelry, and candles.