Published in Economic Development

GVSU study confirms gaps in entrepreneurial support

BY Sunday, May 23, 2021 05:30pm

Increasing diversity within support organizations and improving access to marketing resources are among the top concerns for West Michigan entrepreneurs, according to a recent analysis commissioned by Grand Valley State University’s Innovation Hub in Muskegon.

Access to capital also remains an issue particularly for small businesses owned by women and minorities, while “solo entrepreneurs” or sole proprietors could use more attention and support.

The study examined how entrepreneurial support organizations in a seven-county region are viewed by the people they serve. Conducted by Lansing-based Public Sector Consultants Inc., the study largely affirms what’s been known and provides added impetus for improvements, said Kevin Ricco, director of the GVSU Innovation Hub.

“They’re telling us a lot of things that we already know, but it kind of validated it for us,” Ricco said. “At the end of the day, all of our partner organizations, we’re all interested in the same thing. We want to see the entrepreneurs and small businesses become successful.”

The GVSU Innovation Hub and other entrepreneurial support organizations know they need greater diversity within, and better outreach to, entrepreneurs in underserved and under-represented areas, Ricco said.

“Stakeholders felt that (entrepreneurial support organizations) need to make significant efforts in breaking down barriers to reach these communities and gain trust in order to provide better services and support,” according to a report on the study’s findings.

The report indicated that women and minority small business owners who were surveyed “don’t see enough people looking like them working at these support organizations,” including the GVSU Innovation Hub, Ricco said.

“It was striking to hear that,” he said.

Because of a lack of greater diversity, women and minority entrepreneurs “may be lukewarm to actually reaching out for (assistance) and putting their trust in us to help them,”  Ricco said.

“We know that’s a weakness. That’s something we have to address and we have to continue to work at,” he said.

Public Sector Consultants reviewed entrepreneurial support services in the region and conducted online surveys with more than 100 entrepreneurs across seven counties: Kent, Ottawa, Muskegon, Oceana, Newaygo, Lake and Mason. The firm also interviewed and held roundtables with groups. 

Nearly half of the survey responses came from Muskegon County, more than 40 percent were from Kent County, and 16 percent were from entrepreneurs in Ottawa County.

Participants “described excitement and interest at the community level around supporting small businesses and entrepreneurs, with high levels of engagement and support,” according to the study.

‘Lack of communication’

Despite the region’s entrepreneurial success and support organizations, Public Sector Consultants found that there persists a lack of understanding about what’s available across the region for small business owners.

“While many stakeholders felt that there are a large number of resources available to small businesses and entrepreneurs, many agreed that the entrepreneurs in their communities do not know that those resources exist, or how to access them,” according to the report. “There is a lack of communication from business support organizations to individuals who are interested in or are currently starting a small business that prevents them from receiving the support they need. For many individuals, not knowing where to start or where to go to receive help can be a huge barrier to taking the first steps in starting a small business.”

Several respondents also indicated that “the number of resources available are not necessarily equitable between communities,” according to the report.

To address that issue in the Muskegon area, the GVSU Innovation Hub organized the Business Resource Team, a loose-knit group of organizations that works with entrepreneurs. The Muskegon Business Resource Team works to “create, if nothing else, at least a starting point or a landing page for people to get some basic information and they’d be able to click on a link for somebody that they think can help, depending on what they need,” Ricco said.

Marketing, social media

Study participants also said deeper training and coaching that goes beyond the basics in business are among the service improvements that are needed.

Participants want training “with very deep dives and to get really good, informative information from these sessions,” Ricco said.

Specifically, 57 percent of study participants said they welcome more support and training in marketing and on using social media, and half of the participants cited a need for accounting and tax assistance. Nearly 40 percent want more training in financial planning and projections, and one-third need more help with business planning, according to the study’s findings.

The results show that support organizations should look at training programs that go deeper — but may attract fewer attendees — for small businesses as they mature, Ricco said. Training often “casts a wide net” with a larger audience of entrepreneurs at their earlier stages, he said.

“We need to almost change our philosophy a little bit as we think about and do a very deep dive into a specific element, whether it’s marketing or pick a topic that’s relevant,” Ricco said. “We have to think about it differently. The entrepreneurs are telling us, as support organizations, ‘Hey, you guys need to figure this out. We still have some unmet needs and there’s levels and grades and you guys need to sort out who’s going to do that and who’s going to go what.’”

Public Sector Consultants also found that the region’s population growth exceeds the entire state, that revenue for participants declined 20 percent to 40 percent in the COVID-19 pandemic, and that new business applications increased, indicating higher startup activity out of the pandemic.

Entrepreneurs in rural areas in West Michigan also “do not have access to the same funding opportunities, training, physical spaces, and other services that their counterparts in urban areas do,” according to the study. 

A lack of broadband internet access and transportation to urban areas with greater resources “exacerbate these issues in rural areas,” the study’s authors added. 

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