Economic
Development
Frequently Asked Questions
Question:
What strategies for
economic development are appropriate in rural areas?
Answer: Strategies that create and retain jobs, encourage small business development, assist businesses dependent on natural resources such as farming and mining, expand access to the Internet, promote tourism or recreational activities, advance conservation, provide and improve transportation, and further develop the infrastructure are among those that support rural economic development efforts.
Question: I would like to start a business or take over a business in a rural community, where should I begin?
Answer: Contact your local SBA Small Business Development Center. SBDCs are one-stop assistance centers that enhance economic development by providing small business with management and technical assistance. They provide counseling assistance to prospective small business owners to help them with a business plan and with applying for SBA loans. There are more than 1,100 SBDC central and branch offices in the U.S. and territories that can assist rural populations. In addition to their counseling assistance the SBDC has created a Small Business Planner to serve as a roadmap for starting a business. This guide includes several resources and links to supplementary information. Also, the SBA Prequalification Loan Program targets low income borrowers, disabled business owners, new and emerging businesses, veterans, exporters, rural and specialized industries.
Another valuable service for small businesses is the national organization SCORE: Counselors to America's Small Business. They provide an online counseling service with counselors that are retired and working, experienced entrepreneurs and corporate managers/executives. Their volunteer base is 10,500 with 1,200 volunteer counselors with expertise in more than 600 specialty areas. Other resources include training through online workshops, electronic documents/articles from their Learning Center, and a template gallery, which contains real business plans and financial and accounting statements for users to access.
Locally, you should contact your city office and/or the city council. Licenses or permits may be required and zoning restrictions should be reviewed before a business is created. Also, financial incentives are sometimes offered through the city as a motivator for starting up a new business, or rejuvenating an old business. Often at the county level there are economic development organizations that will also provide assistance.
Local county cooperative extension services can serve as invaluable resources to new entrepreneurs, providing assistance and guidance on issues such as legal restrictions, access to financing, marketing strategies and pricing strategies. They can also assist families with the impact of home-based business on family structure and relationships.
Question: How can communities work together to promote economic development?
Answer: Smaller communities interested in participating in regional partnerships with other local governments may need assistance through regional economic development organizations in establishing new working relationships through telecommunication and other technology. These economic development organizations can be found by contacting your county cooperative extension office. County cooperative extension offices can be located through the
Cooperative State Research, Education, and Extension Service (CSREES). As rural communities transition from economies based on agriculture and manufacturing to those based on technology and other industrial clusters they are confronted with the challenges of meeting the digital divide, the gap that exists in the ability to use and benefit from the Internet and other information technologies. Bridging the digital divide provides an opportunity to promote economic and social development along with community and individual empowerment.
Question: What information resources are available for economic development in rural areas?
Answer: The Rural Information Center (RIC), funded through the USDA and produced by the National Agricultural Library, has an extensive list of information resources on the revitalization of rural downtown. This information can be found on RIC's Rural Downtown Revitalization page.
Question: What funding resources are available for economic development in rural areas?
The U.S. Department of Agriculture's Rural Development offers two types of grants to public bodies, private non-profit corporations, and Indian tribes to help finance or assist in the development of small businesses. The Rural Business Enterprise Grants (RBEG) are used for technical assistance, machinery and equipment purchases, revolving loan fund creation, and building construction and the Rural Business Opportunity Grants (RBOG) are used to sustain economic development in communities with exceptional needs by supporting economic planning, technical assistance and business training costs. Information on rural programs is available at your local USDA Rural Development service center. For a directory of USDA Service Centers go to the Office Information Locator at: http://offices.sc.egov.usda.gov/, or by visiting USDA's web site at http://www.rurdev.usda.gov.
The Rural Information Center (RIC) has a list of funding resources on the revitalization of rural downtown. This information can be found on RIC's Rural Downtown Revitalization. Also, the SBA Prequalification Loan Program targets low income borrowers, disabled business owners, new and emerging businesses, veterans, exporters, rural and specialized industries.
Question: What is a business incubator and how can I find one to help me?
Answer: A business incubator is a business support process that accelerates the successful development of start-up and fledgling companies by providing entrepreneurs with a variety of resources and services. These services can include management guidance, technical assistance and consulting tailored to young growing companies. Incubators often provide clients access to lesser expensive rental space and flexible leases, shared basic business services and equipment, technology support services and assistance in obtaining the financing necessary for company growth. Business incubators are emerging in rural America. To find out about business incubators in your area contact the regional or local Small Business Development Center. You may also contact the National Business Incubator Association (NBIA) and
Gaebler Ventures for links to business incubators by state.
Question: How would I start a business incubator in our rural community?
Answer: Rural communities have successfully created these support facilities to promote economic development in their communities. Some small rural incubators consist of empty office space in a city building, while other incubators may reside in vacant warehouses. For information on how to start a business incubator contact your local economic development organization, the job development authority in your city or town, and/or the regional planning council in your area. For help finding these organizations in your specific area contact your local Small Business Development Center (SBDC).
Question: Are there grants to help fund a for-profit business?
Answer: Generally funding organizations do not provide grants to help fund a for-profit business, however several agencies including the Small Business Administration have low interest loan programs. Of the few grants that may provide funding to for-profit businesses they are for a very specific purpose and not for general business operating purposes. Small Business Development Centers (SBDCs) recommend that time generally would be better spent in working on improvements to your business rather than investing time in applying, performing the work required and reporting on the use of grant funds.
There is a federal grant program for small businesses titled the Small Business Innovation Research (SBIR) Program. It is reserved for companies doing research and development and not intended to fund the operations of a company. Many states have programs that provide assistance in applying for SBIR grants.
Question: Where can I obtain a loan to help start or grow my small business?
Answer: The Small Business Administration has a number of programs to financially and technically assist developing small businesses. The SBA may be reached by phone at 202-205-6600, or toll-free at 1-800-UASKSBA. The Department of Commerce also has programs to assist small businesses. They may be contacted by phone at 202-482-2000.
Question: Does a woman-owned business qualify for minority programs?
Answer:
The federal government has stated that women are not considered a minority group, however women may qualify for programs designed for economically or culturally disadvantaged groups. Several organizations have programs targeted for women in business: Business Women's Network, Count Me In, Digital-Women.com, Wachovia Women Business Owners, National Association of Women Business Owners, Center for Women's Business Research, and SBA Women's Business Centers. The SBA Prequalification Loan Program targets low income borrowers, disabled business owners, new and emerging businesses, veterans, exporters, rural and specialized industries.
Question: Where can I find information regarding wages, benefits, workplace safety, hiring of veterans, and other labor issues?
Answer: The U.S. Department of Labor
has an extensive web site of consistent and accurate information
regarding employment practices and regulations including wages,
benefits, workplace safety, veterans, training, worker's compensation,
and people with disabilities. The Department's Compliance
Assistance Home Page helps
small businesses learn of applicable labor laws and regulations.
The Department's
National
Call Center identifies telephone contacts
for specific questions. Live assistance
is available Monday through Friday from 8:00 a.m. to 8:00 p.m. Eastern
Time by calling, 1-866-4-USA-DOL, TTY: 1-877-889-5627.
Question: Wind energy is a popular economic development project in rural communities. Where can I find out more information on bringing wind energy to my community?
Answer: There is a variety of information on wind energy for rural communities on the web.
• For general information about wind energy visit Wind Powering America.
• To determine the feasibility of a wind energy project in your community access the Wind Energy Finance (WEF) calculator, a free online cost of energy calculator that provides a quick and detailed economic evaluation of potential utility-scale wind energy projects, or visit Wind Powering America and click on Wind Energy Finance Calculator. You can also access the latest state wind resource maps at the Wind Powering America's State Wind Resource Maps.
• To learn about the economic benefits of wind energy projects to your community access the Job and Economic Development Impact (JEDI) model, a free online easy-to-use tool that provides an approximation of the economic impacts to the local county and state generated from wind project development, during the construction phase and throughout the 20 to 30 year life of the project.
Question:
How can rural communities bridge the digital
divide?
Answer: For rural communities to remain economically viable they will be required to implement or utilize existing or improved technology for a wide range of electronic information sharing and commerce, that includes Internet learning, institution building, community organization, and economic development. Discussion should begin at the local level with individuals and community organizations, but also with broader levels of government. Local leaders and residents need to fully understand the potential the technology can provide to their communities and be encouraged to take advantage of the technology. State and federal government may bridge the divide through regulation, reform, access, improvement, information gathering, and financial assistance. Rural communities that expand and utilize current operations and capacity for electronic initiatives will be the most effective in overcoming this divide.
Credits
Pamela Friedman, The
Finance Project
Last revised 12/17/2007
