Working With Entrepreneurs: Supply Side or Demand Side Approach?

By Don Macke, RUPRI Center for Rural Entrepreneurship

As we try to find solutions to challenges or exploit opportunities we often tend to focus on supply side approaches.  For example in health care if we only had more preventive care services.  Or in the area of education we might focus on the need for more teachers.  In the area of transportation the supply side solution might be more commuter lanes on the freeway.  No doubt supply side solutions are important and our intent with this article is not to dismiss them.

In the arena of entrepreneur-focused economic development we might suggest first focusing on demand side solutions before moving too fast to supply side answers.  Supply side answers might include greater access to capital, more training for entrepreneurs, market intelligence resources provided through Economic Gardening programs, and the like.  All of these resources are very important, but in and of themselves are unlikely to create meaningful economic development (e.g., new private business investment, job and career creation and tax base expansion). 

Consistent with our learning from the field, we are increasingly focused on demand side elements associated with entrepreneur focused economic development.   As is the case in K-12 education where buildings, curriculum, computers and teachers are essential, we also know that other factors are important, including family stability and engagement, poverty, and the experience of great teachers and supportive administrators.  Drawing on this example from everyday K-12 education we can make the leap to lessons being learned about how to strengthen our economies and communities by focusing on demand side considerations as we work with area entrepreneurs.

First and foremost, entrepreneur-focused economic development is all about “people development” as much as it is about business development.  Our economic development intervention is with the person (or persons) that is the entrepreneur.  How we engage with that entrepreneur is potentially as important as the development resources we have to offer them like financing, training, or market research.  This process of engagement is comparable to a great teacher who can assess where a specific student is, their learning style, issues that are getting into their learning progress, and how to coach them effectively.

The connective piece between the entrepreneur and all the development resources is the person or persons interacting with that entrepreneur and providing networking to the right resource at the right time that is strategically important to their particular process.  At the RUPRI Center for Rural Entrepreneurship we have increasingly focused on business or entrepreneur coaching as a promising practice to meet this critical need.  Effective coaching (not necessarily business counseling) can ensure greater value is being provided to the entrepreneur.  Additionally, sound coaching that evolves agreement around what is really important to venture success and growth, can also ensure more effective use of development resources.  Bottom line, in this scenario the entrepreneur sequences and focuses on strategically important building blocks that prepares them to be ready for securing financing, more effectively using market intelligence, or employing marketing technical assistance.

Key elements in working with entrepreneurs include:

• Entrepreneur Talent Mapping & Targeting
• Outreach, Intake & Screening of Potential Clients
• Referral & Tracking of Clients
• Client Portfolio Development based on Opportunity & Targeting
• Customized & Strategy Assistance
• Economic Development Impacts
• Impact Capture & Communication back to Stakeholders

The Center for Rural Entrepreneurship in partnership with development groups across North America is aggressively exploring, developing, and testing a new generation of “tactics” we call “Working with Entrepreneurs.”  These protocols and promising practices are not generic, but specific to different kinds of entrepreneurial talent ranging from bright-eyed startups to seasoned veterans now ready to growth from a regional to a national market.  We have found that this kind of entrepreneur client segmentation adds sophistication and contributes directly to effectiveness and impact.

Our journey into the demand-side of the entrepreneur development equation is emergent and there are challenging issues and room for additional learning.  But we are encouraged that this piece is essential to optimal success and the effective use of development resources.  We are now working in a wide range of landscapes ranging from larger communities like Missoula, Montana and Fond du Lac, Wisconsin to very rural places like Rawlins County, Kansas or Chase County, Nebraska.

If you would like to learn more about this practice check out www.energizingentrepreneurs.org or contact Don Macke at don@e2mail.org.  We would be happy to share some no-cost resources with you.