WHAT CAN POLITICIANS DO FOR YOU? Democrats push small-business initiative BY AMY TETREAULT

In 2000, Katherine Palmer decided that Portland needed a contemporary pet store. Charged with creative ideas, Palmer stood unsure how to approach the more technical problems of opening a business. She sought help, was lucky to find a few local economic resource centers, and was soon on the path to building a business plan, seeking out loans, and constructing her dream pet store. Five years later, Palmer’s imaginative business venture is now a successful small enterprise called Fetch that many Portland dog owners couldn’t imagine living without.

It is this type of small business help that legislative Democrats are looking to maximize with their Small Business Initiative.

Democratic state representatives have been convening for the past year in efforts to design a plan for the improvement of the small business atmosphere here in Maine. Now, in the last week, it seems as if this plan may be falling into place.

Led by House Speaker John G. Richardson (D-Brunswick), state Democrats have constructed this Small Business Initiative with a series of action steps, many of them pieces of legislation that have been recently in committee. According to Richardson, "the plight of small businesses has been largely ignored before and we now need to focus our attention on these businesses."

As a result, Richardson and the Democrats also created a Bill of Rights that affirms what they consider to be the fundamental importance of Maine small businesses. The actual Initiative steps speak specifically of the measures that the Democrats feel need to be taken: easing the official formalities that confuse and confound, mobilizing state resources, and creating a healthier business environment.

According to the Maine Small Business Bill of Rights, 97 percent of businesses in Maine are considered small, so this Initiative affects more Mainers than just your local grocer.

There are a large number of Maine small businesses not only due to the prevalent commerce of traditional industries that tend to foster small business, such as tourism or agriculture, but also because of the many economic resource centers in the state slated specifically to help small businesses. While Maine may lend itself to small-business creation, it is these centers that often help enthused people take the next step beyond an idea, into entering the independent workforce. One-hundred-fifty of these resource centers are found within the city of Portland and throughout the state.

The Economic Development Center Resource Hub on Congress Street in Portland is one such publicly funded center. Prospective business owners just need to walk in the door to be provided with an almost endless source of support. The walls are lined with computers, fax/copy machines, offices, and conference rooms, which clients can actually use as if it were their own, and the fees rarely amount to more than just 10-cent copies. With cheap tools like this, and available software like Business Plan Pro that provide mock business plans, clients can learn by example. This calm environment is more productive than it seems at first glance; the Hub has helped start 190 businesses in just six years.

Slightly older and more well known is the Maine Small Business Development Center (SBDC) as partnered with the University of Southern Maine. SBDC, also found in Portland, focuses on both business startup and growth. Palmer, owner of Fetch on Commercial Street, relied heavily on SBDC both when she was originally starting her contemporary pet haven and after its development.

"The Development Center is like the voice of reality," says Palmer, who says that often her spirit and passion is balanced with the conservative logic and business ideas of SBDC. "All the work through the Development Center forces a business owner to become diligent and resourceful and logical," she says. "It is a great training ground."

Palmer’s success with Fetch over the past five years is certainly a venture to be proud of, considering that one-third of businesses fail within their first year and two-thirds of businesses fail by their third year. According to SBDC, many of these businesses fail because it is difficult for potential business owners to comprehend how maintaining a business is a massive undertaking. Entrepreneurs often do not take enough time beforehand to analyze and understand the market for their business. And entrepreneurs also need to gain sufficient capital to ensure later success.

According to John Entwistle, Center Director and Counselor of SBDC, without adequate cash business owners cannot work to gain customers and also maintain a day-to-day healthy business.

You may have to spend money to get money, as everyone knows, but people like Entwistle can tell you how much you have to spend in order to make what you need to survive. Organizations like the Hub and SBDC provide business owners with more opportunities to beat the statistics and create successful business ventures. Entwistle loves to see people working to fulfill a dream by opening businesses, but he also admits that those people must be willing to work hard and sacrifice a lot to see a dream come true, and some of the people who walk through his door might not be quite willing enough.

And while all of these local centers are helpful for independent business owners, it may soon be possible for small businesses to look outside the city of Portland for aid. The Small Business Initiative bills are still in stages of drafting, referrals, and public hearings, but the effects are already being anticipated by Mainers.

The state’s economy is in decline because of the decreasing traditional jobs in fields such as textiles, logging, or manufacturing. With the loss of such jobs, Maine is scrambling to find a way to boost its economy. This Initiative seeks to encourage business ventures in many different respects, such as An Act to Create and Encourage a Culture of Entrepreneurship in Maine and in Maine Government. This would establish a legislative study committee to plan ways to help businesses; many of the other acts are much more specific in their goals.

Developed by Representative Thom Watson (D-Bath), An Act to Establish "3-1-1" as a Statewide Business Assistance Line looks to simplify the process that already exists for Maine Business Answers, a toll-free hotline for business owners with questions concerning starting and maintaining a business run by the Department of Economic and Community Development. The hotline service is planning for improvements if it is developed into "3-1-1," a change that seems quite likely. Watson received nothing but support when he presented the bill at a public hearing on April 26, and "3-1-1" is fast becoming one of the most popular bills in the Initiative. The work session is scheduled for May 5.

Many of the acts focus on education by establishing internships, loan repayment, and statewide entrepreneurship curriculums. Just recently, An Act to Develop Statewide Entrepreneurship Curriculum from Kindergarten through College was also heard at a public hearing on April 26, was fully supported by those present, and is now awaiting the work session on May 5.

As part of USM, John Entwistle from SBDC voices his opinion about these initiatives. "Right now, the education system is oriented towards students entering college and working to become employees. We overlook entrepreneurship. But if students are taught the skills and given the opportunities, they may be more apt to start their own businesses."

One such school is Machias High School in Washington County, which offers the only educational entrepreneurship program in the state. After a survey of students last year demonstrated that entrepreneurship curriculum was their number one request for the school, Machias implemented the program for this school year. The program focuses on both classroom teachings and hands-on experiences. Brian Leavitt is the entrepreneurship education instructor at Machias and is psyched about this opportunity for students: "It’s great to be able to actually take students out into the real world and show them what its really like to run a business." While this year students only get these hands-on experiences through field trips, Leavitt hopes to expand the program next year to include internships.

It is these types of programs that the package of bills is working to encourage. By attaining entrepreneurship skills at a young age, those students will be more equipped later to incorporate this knowledge into work. The next step just might be An Act to Recruit and Retain College Graduates through Loan Repayment. This proposal would offer up to $20,000 in loan repayment for college graduates who live and work in Maine after graduation. Currently, only 24 percent of Maine workers hold a Bachelor’s degree. According to Initiative leader John Richardson, "This act may be an ambitious goal, but Maine cannot afford not to do it. We need to make a stable commitment to our young people." The bill has broad-based support and is a favorite among many who aspire to see the Maine’s youth remain in the state.

So, with multiple initiatives focusing on so many different areas, will this Initiative be effective?

According to Entwistle, many of these acts hold the possibility of being quite effective, especially the education acts. "A shift towards independence will help open students’ eyes, and all the skills we can teach them now will be incorporated into their later work." Another targeted area that may succeed according to Entwistle are the acts concerning bond money, such as An Act to Authorize a General Fund Bond to Stimulate Maine’s Economy. "While the bond may be expensive," he says, "I am confident that the dollars will be spent effectively through the means of direct support. Flat-funded programs become less effective with time because there is no room to maintain or grow." Although still anticipating a work session date, this bond seeks to provide more direct support for small businesses through funding in areas related to research, development, and infrastructure improvements.

But according to Palmer of Fetch, the best support a small business can have is straight funding. A business-owner may be able to accomplish many creative feats, but without the necessary cash, it all goes unnoticed. Palmer received this necessary cash when she obtained a micro-loan through working with the SBDC. Many small business incubators provide small sums of money in loan formats to micro enterprises because commercial banks often refuse to lend this essential money to small business owners. Without aid, Palmer wouldn’t have achieved success with Fetch.

Of course, she also wouldn’t have achieved success if she weren’t providing a service and products that Portland-area consumers wanted. It’s a delicate balance between encouraging a small business and throwing good money after bad, everyone agrees. So this government-issued jumpstart for small business growth could provide the education to make sure the entrepreneurs are developing sustainable ideas along with the seed money to get them started. The rest is up to the small-business owners themselves.