Entrepreneurship is a quickly and steadily growing trend in the world of business today. However, many people that would like to start their own business do not feel that they have the resources or knowledge to do so. Luckily, there are many resources that can be found right here in the Bryan/College Station area. These resources include, but are not limited to, the Center for New Ventures and Entrepreneurship, the Research Valley Partnership, and the Small Business Administration. These resources can help entrepreneurs get their business off the ground with professional guidance and assistance in gaining financing for the business.
One of the most readily available local resources for an entrepreneur is located right on West Campus at Texas A&M. The Center for New Ventures & Entrepreneurship can be found on the fourth floor of the Wehner Building at Texas A&M University. It was founded in 1999 as a part of Mays Business School’s Department of Management to aid young entrepreneurial minded Aggies in developing ideas, obtaining resources, and learning the ins and outs of starting or obtaining their own business. The center holds a wealth of knowledge led by Executive Director Richard H. Lester, Ph.D. and Assistant Director Lenae Huebner. It hosts many diverse programs and is home to plenty of great resources.
Although the staff is extremely helpful and the resources are extensive, the core of the center seems to be its many programs that is has to offer. The first of these to be noted is the Envision: Entrepreneurial Vision conference. Envision is a three day conference held in San Antonio, Texas that is designed to help young entrepreneurs along in taking the “next step”. The conference is used by many to identify the next big opportunity and to help develop effective strategies to make it over the real life hurdles that many of them will face as they grow.
Perhaps the most famous program, considering it is one of a kind on a collegiate level, is the Aggie 100. The Aggie 100 identifies and recognizes the fastest growing Aggie owned and operated businesses around the world. This program defines achievement as growth, job creation, product acceptance, and entrepreneurial vision, and recognizes the Aggie success stories that represent these traits. An Aggie 100 newsletter is available at the Center for New Ventures & Entrepreneurship. Another special recognition of the center is the Conn Entrepreneurial Leadership Award. The Conn Award was established by the Conn family, C.W. and Dorothy Conn, to recognize exceptional business leaders.
The program most readily available for students at the Center is the Ideas Challenge. Each spring, the center challenges the students of Texas A&M by asking “What’s your big idea?” The competition invites freshmen, doctoral students, and any classification in between who will eventually be narrowed down into 40 finalists who will have to present their idea to judges from around the nation. Besides cash prizes, participants can receive the knowledge and valuable experience in developing business concepts and pitching their idea to others. Another challenge Aggies are invited to participate in at the Center is the MBA Tech Transfer Challenge. It challenges students to assess the business feasibility of an A&M invention or innovation. Students are given seven days to assess a technology that they know nothing about, determine if the applications are feasible, and assess the market appeal for the invention. Past winners and finalists have received job offers for their display of amazing ingenuity and talent.
Some other opportunities available for use at the Center are the Prospective Speaker Series and Start-Up 101. The Prospective Speaker Series events team up two A&M colleges and features speakers of interest to both colleges who are involved in the local business community. Start-Up 101 is an annual, two-day workshop event established in 2007. This one of a kind Aggie workshop introduces prospective entrepreneurs to foundation issues about how to convert an idea into an operating business.
Along with the plethora of useful programs and opportunities available for an Aggie at the Center for New Ventures & Entrepreneurship, there are many resources available for the general public as well. The faculty is well known and will greet anyone who walks through the door with a smile. They will give an interested party plenty of useful materials to read and their website hosts a long list of useful links, a sign up page for the newsletter, and survey opportunities. Any student from Texas A&M, past or present, would be missing an excess of potentially great local resources if they turned a blind eye to Mays Business School’s very own Center for New Ventures & Entrepreneurship.
The Research Valley Partnership, another great resource, identifies five reasons to open and run a business in the Brazos Valley. They are as follows:
- World Class Community – Higher education and being at the center of the Texas Triangle draw global resources to our region.
- Young Minds – Easy to recruit and retain talent.
- Innovation and Research – $600 million in annual R&D flows through our region.
- Critical Mass – Where talent, innovation, and opportunity converge.
- Business Friendly – A cohesive local team ready to assist.
The Research Valley Partnership website is a one stop shop for new, innovative businesses. Navigating the website can almost be overwhelming because it is packed full of information and publicity ideas to bring in business. The website has information about resources that the Research Valley Partnership can provide as well as resources that the Bryan/College Station area can provide. The next section of the website is all about innovation, followed by Aggieland, and finally The Partnership. A business can find whatever information they would like, but it may take them a few clicks to wade through all of the information.
The Resources tab on the Research Valley Partnership website takes you to a page full of information about RV’s resources as well as the resources of the Bryan/College Station area. On the left side of the screen, one may choice between twenty options, ranging from Customized Reports to Emerging Clusters (emerging industries), and from a Data Center to Maps and Real Estate for your business. The Data Center is full of all kinds of information about the area. There are demographics about the people in the city, information about transportation, business costs, the government, utilities and telecommunications and the list goes on. The two most interesting parts under this tab are the Incentives and the Factoids. The Incentives for businesses to come to the Research Valley are extremely attractive and could help advanced or growing companies thrive. Some of the most attractive incentives are Land Grants or Reduced Prices, Cash Incentives, Financing Programs, Utilities, Fast Track Permitting Process, and Training. The Fast Track Permitting Process helps to cut through “red tape” and have permits approved faster with the permits being reviewed in 20 days or less. The Factoids are ten facts about the area. They are a mix between facts about leisure activities, living in the area, and more of what the Research Valley has to offer.
The Innovation section of the website is full of helpful tools for entrepreneurs, ways to get Access to Capital, Research and Development Companies, University Research, and a link to the Innovation Center. Entrepreneurs may get help with a planning a business, getting help from subject specific experts, learn about real estate, or learn about Professional Networking and Education to help them with their ideas. Access to Capital includes grants, Angel Investors, competitions, and emerging technology funds. The R&D page has the list of companies that are working on the Emerging Clusters from the resources page. These include energy, IT, Homeland Security, and Life and Health Sciences. The University Research area describes some of the resources of Texas A&M research. Part of the Research Valley is the Innovation Center. The Innovation Center is where technologically advanced companies can incubate a new business. Here the business will be nurtured and given advisory services, a service provider network, and a physical space to do business. The down side of the program is they are only looking for science or technology companies to participate in the incubator program.
In the Aggieland section, outside companies can learn more about Texas A&M and its Health Science Center. There is a short description of the Texas A&M System, Texas A&M, the Health Science Center, and Campus Life. There is information about how many majors are offered at A&M and about the Aggie Network. There is also information about the $558 Million in Research Expenditures that Texas A&M boasts.
The Partnership section offers a list of the Board of Directors of the Partnership as well as a contact list of staff. The Partnership is also launching a new investor relations program that promises even more benefits for their current “Alliance members.” On this page there is a list of the different companies that are investors for the Research Valley.
One of the most important parts of the website has to be the Contact Us tab. On this page, there is a map showing where the Partnership is located, phone numbers for different contacts, fax numbers, and an e-mail address. The Research Valley is a great place for new businesses to thrive. The companies that will benefit the most are technologically advanced and have resources to offer back to the community.
Another of the largest information resources for small businesses, in any phase of their life cycle, is the Small Business Administration, or SBA. With the idea that small business is vital to the U.S. economy in mind, the government created this agency in 1953 to help small businesses start, grow, and succeed. Although the SBA has drastically grown and evolved since its inception, the agency continues to aid, counsel, assist, and protect the interests of small businesses. To help in their quest, the SBA has an extensive network of field offices all over the United States that provide more area specific information to small business owners.
Perhaps the easiest way to tap into the SBA’s vast amount of information is its website. At ‘www.sba.gov’, one can find a wide range of information for everything pertaining to small business. It is not only easy to access, but also easy to navigate and read. For Spanish speaking small business owners, the entire website can be switched to Spanish. Such a feature is important to note because it shows SBA’s continuing commitment to help small business, even through changing national conditions. On the homepage, under a ‘Spotlight’ section, the agency has a variety of links to national issues currently affecting small business. These issues range from the administration’s loan programs, to scam alerts, to information about the Economic Recovery Plan.
The SBA divides their website into four main sections. First, the ‘Small Business Planner’, provides helpful links to planning at any stage in a business’ life cycle, whether it be planning a business, starting a business, managing it, or exiting. Links like ‘How to write a business plan, step-by-step’, or ‘How to manage employees’ take some of the guesswork out of important aspects of a small business owner’s responsibilities. The second section, ‘Services’, gives links related to assistance in such areas as finance, counseling, online training, disaster relief, laws and regulations, special audiences such as women, Native Americans, 50+, etc., and contract opportunities. Third is the ‘Tools’ section, where one can retrieve information regarding audio/video resources like pod casts, the monthly web chat archives, templates for common business forms, and volumes of compiled information such as law books and statistics. Finally the fourth section is for ‘Local Resources’. This area provides information on the aforementioned field offices. One can search for the closest district, regional, or disaster relief office. As these offices are usually located in larger cities, the closest SBA field office to the Bryan/College Station area is in Houston. The Houston district office has a web page that includes area specific news and regulations, local workshops, and success stories. The page also provides information on local grants, loans and other money obtaining options. In addition to the four main areas of the website, the SBA also has a ‘Contact Information’ section, a ‘Frequently Asked Questions’ area and a ‘Newsroom’ section that provides the general public, as well as the media, with information about the SBA. This includes press releases, press kits, and upcoming events. It is important to note the shear depth of information provided by the SBA’s website. A small business owner or prospective owner can rest assured that if they need information, this website can provide it.
Among the many other services that the SBA offers start-up and currently operating small businesses, one of the most important and utilized services is financial assistance. The SBA offers Surety Bonds and many other types of financing, but loans are the most utilized types of financial assistance offered by the SBA and used by small businesses in America. The SBA offers five different types of loans and they are as follows: Basic 7(a) Loan Guaranty, CDC/504 Program loan, Micro-loans, Office of Disaster Recovery loan, and Special Purpose loans. Although all these loans offer great benefits to small business owners, the 7(a) Loan Guaranty is the most widely used of the loans offered by the SBA.
The name for the 7(a) Loan Guaranties is derived from section 7(a) of the Small Business Act which authorizes the SBA to provide loans to American small businesses. 7(a) loans present a very interesting and exciting opportunity for new and existing small business owners. The fact that these loans are only offered on a guaranty basis makes these types of loans safer for lenders, therefore, making the loans more readily available for small business owners. The guaranty portion of the loans stems from the fact that the SBA backs the lenders who offer the loans. A stipulation of this guaranty is that the loan must be structured by the SBA’s requirements. Lenders that offer a 7(a) loan may apply and receive a guaranty on a portion of the loan. Thus, the lender and the SBA share the risk that a borrower will not be able to repay the loan. The guaranty only covers payment default, and does not cover imprudent decisions by the lender or misrepresentation by the borrower. Through this system, the SBA does not directly offer the loan but does back the private lender that is offering the loan. Lenders’ confidence in the SBA makes the lender more likely to offer financial assistance to a small business owner which in turn opens up more potential for a small business owner to obtain credit.
To obtain a 7(a) loan, a small business owner or partners in a small business, apply to a lender for financing just like would normally occur in the pursuit of financial assistance. The lender may offer the loan outright without seeking backing from the SBA. However, if the lender feels that the application has some weaknesses, then they may apply for a guaranty from the SBA. If the lender is unwilling to provide the loan, with or without the SBA’s backing, the SBA can not force the lender to change its mind. Also, the SBA may not make the loan itself as it does not have money to lend directly.
The SBA guidelines for 7(a) loans are intentionally broad so that this lending program may accommodate the most diverse variety of small business financing needs. All businesses considered for financing must meet SBA size standards, be for-profit, not already have the internal resources (business or personal) to provide the financing, and be able to demonstrate repayment. Repayment ability from the cash flow of the business is a primary consideration in the SBA loan process but good character, management capability, collateral and owner’s equity contribution are also important considerations. All owners of 20 percent or more are required to personally guarantee SBA loans. Special purpose programs identify any additional criteria. Finally, the SBA must determine if the principals of each applicant firm have historically shown the willingness and ability to repay their debts and whether they abided by the laws of the community. Therefore, a “Statement of Personal History” is obtained from each principal.
7(a) loans have a maximum amount of $2 million. SBA’s maximum exposure is $1.5 million or 75 percent. Maximum maturity for real estate and equipment loans is 25 years. Generally, the maximum maturity for working capital is seven years. This maturity can be extended to up to ten years to ensure repayment.
The aforementioned resources can provide great help to anyone wanting to start a small business and continue to offer assistance to existing small businesses. These resources can be found in many communities across America. But there is help available virtually everywhere. The guidance and knowledge that can be provided by these different organizations and contacts make the transition into owning a small business easier and less risky for an entrepreneur. Due to this, aspiring entrepreneurs should use the local resources in all phases of starting and running a small business. They will not only aid in the creation, but will help mend when needed and keep the business afloat for as long as the entrepreneur wants it to be.
Resources used in compiling this paper include:
- Center for New Ventures and Entrepreneurship at Texas A&M University