Small Business Development Center

SBDC

Service Area Program Review – Auxiliary Fund

The Office of Economic Development

Finance and Facilities

Human Resources

The Office of Institutional Planning, Research and Assessment

Spring 2005

Small Business Development Center SBDC

Service Area Program Review – Auxiliary Fund

Committee:

List participants

The Office of Economic Development

Finance and Facilities

Human Resources

The Office of Institutional Planning, Research and Assessment

Spring 2005

SBDC Program Review

Table of Contents

Section B…………….……………Mission and Personnel Section B1…………………………History/Overview Section B2……..………….……….Products and Services

Section C…………………………..SWOT Section D………………………..…Recommendations Section D1…………………………Action Plan (Tactical) and Strategic Alignment Chart Appendices #1……………………………………Institutional Budget Data #2……………...…………………….Institutional Assessment Data #3……………………………………SBDC FTSE

#4…………………………………... State SBDC MIS Reports #5…………………………………... Federal Monitoring Visits #6…………………………………... SBDC Annual Report #7…………………………………... SBA/Yavapai College Memorandum of Agreement (MOA) #8………………………………….. SBDC Publicity in 2004

Yavapai College Small Business Development Center

SBDC

B. Mission and Personnel

MISSION

Recognizing small businesses to be the foundation of a healthy economy, the Yavapai College Small Business Development Center concentrates on assisting new businesses in getting started and on helping existing businesses grow and remain competitive. The SBDC helps small businesses succeed

VISION

The Yavapai College Small Business Development Center effectively works in partnership with local businesses, chambers of commerce, economic development groups, SBA programs, and all levels of education and government to help shape the positive economic development of Yavapai County

Overview of SBDC Personnel

Tri-City Office Name: Rick Marcum, SBDC Director Contract Type: full time, paid 57% from college match and 43% from grant Years at Yavapai College: 4.8 Years of Experience: 28 Credentials : Master’s Degree in Business Management; certified facilitator; certified practitioner of Enterprise Consulting; certified national SBDC counselor Awards: SBDC Center of Excellence Award Job Description: Responsible for the management, leadership, and operation of a District-wide Federal Grant Program called the Small Business Development Center (SBDC). This program represents a partnership between Yavapai College and the U.S. Small Business Administration (SBA). The mission of the SBDC is to help Yavapai County small businesses succeed through start-up assistance and retention and expansion services. The methodologies used by SBDC to accomplish this mission are one-on-one counseling sessions, group training seminars, and “for credit” classes through the Small Business Entrepreneurship Certificate Program. The SBDC Director also functions in an economic development capacity by representing the college on a variety of community boards, commissions, and committees aimed at business development in Yavapai County Name: Fred Kennedy, Senior Business Advisor Contract Type: Part time – paid 75% college match, 25% grant Years at Yavapai College: 15 Years of Experience: 20 Credentials : certified national SBDC counselor Awards: 2002 SBDC Economic Impact Award Job Description: Responsibilities include working with existing, mature businesses in the area of expansion, financing, and business planning. Produces seminars in the areas of financing, tax issues, and human resources

Name: Mary Ward, SBDC Office Manager Contract Type: Full time, 100% college match Years at Yavapai College: 26 Years of Experience: 15 Credentials : numerous executive assistant and office management trainings Awards: SBDC 2003 Organizational Effectiveness Award Job Description: Responsible for administrative functions within the SBDC program; data input into the state SBDC MIS system; produces seminar flyers and assists with marketing activities related to seminar; produces quarterly reports from the MIS system; schedules client appointments; functions as the gatekeeper of the SBDC program; supervises student workers Verde Office Name: A. Roy Horn, Center Manager and Business Advisor Contract Type: Full time, 100% grant funded Years at Yavapai College: 8 Years of Experience: 25 Credentials : Bachelor’s of Business Administration; certified national SBDC counselor Awards: State SBDC Star Performer (1999); state SBDC Customer Service Award (2000) Job Description: Functions as the Center Manager of the Verde SBDC Office; counsels clients in the Verde area; teaches seminars and classes; represents SBDC on various boards and commissions in the Verde Region Name: Trudy Elkins, Administrative Assistant Contract Type: Part time, 100% college match Years at Yavapai College: 1 Years of Experience: 15 Credentials : Bachelors of Arts, Speech and Broadcasting Awards: Job description: schedules client appointments, inputs client data in the state SBDC MIS system; general administrative duties Professional Growth Activities SBDC staff attends the following training opportunities:

• Yavapai College staff development days: all staff • State SBDC semi-annual “All Hands” trainings – all staff • National SBDC Conference: counselors and Director • Other local trainings as needed Support From Areas Other areas of the college SBDC relies upon on a regular basis are:

• Repro • BuCs • Business Office (Paula Hammer) • Skills Center • Mail Room

The support from these areas is excellent.

Yavapai College Small Business Development Center

SBDC

Program Overview and Background

The Small Business Development Center is part of a national Small Business Administration (SBA) program, with over one thousand offices across the country. In Arizona, there are eleven SBDC’s, all hosted by the community college system through matching funds provided by each host college. The mission of the SBDC’s is to help small businesses succeed, through one-on-one advisory services, “for credit” classes, and non-credit seminars. The Yavapai College SBDC is in its 15th year of operation, and has a track record of continuous improvement. In 2004, the Yavapai College SBDC received the Center of Excellence Award, one of two SBDC’s in the state to receive this recognition. Program results for 2004 are as follows:

• Capital Formation………………………………$25.3 million

• Clients Receiving Loans……………………………………21

• Sales Increases Reported…………………………$2.6 million

• Business Start-Ups………………………………………….54

• Jobs Created……………………………………………….162

• Jobs Retained……………………………………………...156 • Total Clients Served…………………………………….…995

• Total Counseling and Training Hours…………………...2,551

• Training Sessions Conducted……………………………….44

• Training Attendees………………………………………...608

• FTSE Generating Classes Conducted……………………….20

• FTSE Students Enrolled……………………………………221

The above accomplishments represent an approximate 150% increase in the numbers from Program Year 2001. Statewide, the SBDC network returns over $5.00 to the community for each dollar invested.

Program Outcomes

Products and Services The following products and services are offered by the Yavapai College SBDC Program:

• Strategic Performance Retreats (average 8-10 per year) - Vision and Mission Development - Environmental Scanning (SWOT) - Gap Analysis (identifies operational risk and defines difference between implied and specified business requirements) - Change Management - Continuous Improvement Techniques - Developing and Implementing Action Plans

• Small Business Entrepreneurship Certificate Program

“for credit” classes (SBE Series) - Entrepreneurship - Marketing - Accounting Principles - Accounting systems - Finance - Advertising and Sales - Internet Marketing - Legal Issues - Tax Issues - Retail customer Service - Human Resources - Business Planning

• Non-Credit Seminars (average = 20 per year)

- Arizona Department of Revenue Tax Laws - SBA Lending - Licenses and Registrations - General Owning and Operating Issues - Business Clinics - Business Symposium

- Drug and Alcohol Free Workplaces - Market Analysis and Demographics - Analyzing Financial Statements - Legal Issues (From of Organization) - Business Planning - Cash Flow Management

• One-on-One Counseling Services (no fee)* The individual Counseling services are tailored to the needs of individual business owners. Common subjects are:

- Turnaround services (businesses in financial trouble) - Expansion services (successful businesses needing financing for growth) - Start-up services (novices needing help with planning and start up capital)

Counseling sessions average 2-4 hours in length – how many weeks or months they continue is determined primarily by the client *(SBDC is not legally allowed to charge for counseling services, but the the value of this service is approximately $90/hour

• Client Resource Room

- Both full time SBDC Offices have a library and computer workstation available to clients. This is utilized primarily by start-up clients who do not have access to an appropriate office at first. Materials in the library, as well as Internet access, help the clients perform market research, planning, and other activities.

• How to Start a Business in Yavapai County Resource

Book - Given to all new clients

• The Entrepreneur’s Sourcebooks (demographic information on the Tri-City Region and on the Verde Valley Region) - Given to selected clients and community organizations

Products and Services offered in Program Year 2004

Tri-City Office Counseling Sessions………………….….. 141 Hours……………………………………1,082 For Credit SBE classes……………….……15 Non-credit Seminars………………….……13 Verde Office Counseling Sessions…………………..…….73 Hours…………………………………..…..465 For Credit SBE classes………………..……..5 Non-credit Seminars……………………..…16 Total SBE FTSE generated in 03/04……..5.3 Total SBM/SBE FTSE……………………11.2

Economic Impact Results

Tri-City Office Jobs Created………………………………...145 Jobs Retained………………………………..140 Capital Formation………………..$24.6 million Sales Increase……………………….$2.5 million

Verde Office Jobs Created………………………………….22 Jobs Retained…………………………………17 Capital Formation………………….…$661,000 Sales Increase………………………….$108,000 Alignment With Mission All of the above products and services are in clear alignment with the Mission of the SBDC – to help small businesses succeed. See the SBDC Strategic Alignment Chart in the Action Plan section for a more complete view of how the SBDC program aligns with the mission and the external and internal initiatives of the college.

C. SWOT Analysis

Yavapai College Small Business Development Center SBDC

Strategic Planning SWOT Analysis

SWOT Participants: Mary Ward (Office Manager); Fred Kennedy (Senior Business Advisor); A . Roy Horn (Verde Business Advisor); Trudy Elkins (Verde Administrative Assistant); Rick Marcum (Director) Objective How does our department or division contribute to a quality education for our students and consumers? The SBDC’s Mission is to facilitate countywide economic development by helping small businesses succeed. The SBDC developed and oversees the college’s Small Business Entrepreneurship Certificate Program, providing “for credit” classes to people already in business, or to those wanting to start a business. Training seminars, written information, and one-on-one counseling services are provided to other customers and stakeholders throughout Yavapai County. The SBDC also represents the college on numerous business and economic development groups countywide. In addition to the substantial economic impact of these activities, the SBDC has also generated 73 positive newspaper articles for Yavapai College during the past three years. Strengths: Any internal resource that helps to attain the vision, to capitalize on opportunities, and to defend against threats. 1. Create measurable economic impact within Yavapai County by helping small businesses succeed. a. In Program Year 2004, the Yavapai SBDC helped businesses create 162 jobs; retain 154 jobs; increase annual sales by $2.6 million; and assisted businesses in obtaining $24 million in expansion loans from local banks. 2. Design, Market, and Implement Training Seminars throughout Yavapai County a. In 2004 SBDC conducted 44 training sessions for 609 clients with 96% of these clients rating the training as meeting or exceeding expectations 3. Develop partnerships with Native American populations a. The Yavapai SBDC entered into a $10,000 training and mentorship contract with the Yavapai Apache Nation in 2004, aimed at assisting them to develop an Apache Nation version of the SBDC.

4. Design, Market, and Implement “for credit” classes in partnership with the college in the Verde Valley and the Tri-City area.

a. During the past two semesters, the Small Business Certificate Program filled 21 classes with 93% of the students rating the classes as good or very good.

5. The ability to meet annual State SBA and SBDC goals for direct client services

provided a. The Yavapai SBDC produced 2,551 hours of direct client services last program year,

leading all 11 SBDCs in the state by meeting 138% of the SBA goal

6. Achieving the grant goal of creating at least 65 “Economic Impact” clients (those who create jobs, put money into the economy, etc.).

a. The Yavapai SBDC led the eleven Arizona SBDC’s in this category, by creating 98 such clients, achieving 150% of the SBA goal.

7. Excellent Staff

a. One Yavapai SBDC Business Advisor facilitated more loans ($24 million) for clients than any of the 50+ other advisors in the state; another Yavapai Business advisor was named the “Star Performer”, or the best advisor in the state network in 1999, and the same advisor had the state’s highest customer satisfaction scores in 2003. Furthermore, the Yavapai SBDC as a whole won the state’s “Center of Excellence” award in 2003.

8. Effectively represents the college on numerous business and economic development

groups countywide a. SBDC staff are members of the following groups:

i. Seven Chambers of Commerce in Yavapai County ii. Board Member of the Prescott Economic Council (PEC) iii. Chairman of the PEC Workforce Development Committee iv. NACOG Economic Development Committee member v. Sedona Chamber of Commerce Community Issues Committee vi. Prescott Valley Chamber Business Retention and Expansion vii. Verde Valley Central Basin Regional Council viii. League of Women Voters ix. Women in Networking x. Prescott Valley Economic Development Foundation xi. Embry Riddle University Business Incubator xii. Member of the Board of Directors for the Verde Valley Economic Development

Forum

9. Part of a state network of eleven SBDC Centers, with an integrated Management Information System, and the ability to access counselor expertise from 10 other colleges.

a. leveraged the expertise of other SBDC counselors to assist four clients last program year (partnered with Maricopa, Coconino, Pima, and Northland College SBDC’s)

b. MIS System capable of producing local Yavapai County economic impact data – for example:

i. jobs created by SBDC in 2004 = 162 ii. jobs retained = 154 iii. Loans obtained by SBDC Clients - $24,000,000 iv. Sales increase by SBDC clients = $2,626,000

10. Ability to convert SBDC clients into Yavapai College students a. 76 clients enrolled in FTSE generating Small Business Entrepreneurship classes in

2004.

11. SBDC can assist the college in marketing the Small Business Certificate program a. in 2004, over 10,000 flyers and 8 newspaper ads were produced by SBDC in support

of college “for credit” classe Weaknesses: any internal occurrence or condition that hinders the program from attaining its goals

1. SBDC is driven by quantitative measurements through SBA grant requirements and the state SBDC MIS system, which sometimes conflicts with providing needed client and community services.

a. Improvement needs to originate with national SBA

2. The SBDC program must contend with a dual (out-of-synch) budgeting process involving the State SBDC budget cycle on a calendar year, and the college budget cycle on a fiscal year.

a. the college provides a grant officer from the budget office whose expertise helps minimize the impact of this.

3. The SBDC facility on the Verde campus is plagued with physical issues: roof leaks;

acoustical problems in both the training room and counselor office; and heating and air conditioning problems.

a. working with Verde administration on mitigation efforts

4. Financial compensation for SBDC part-time staff is well below statewide averages of similar positions within the SBDC network.

a. Administrative assistant in Verde is paid $7.50/hour; should be $9.00 at a minimum

b. Tri-City business advisor is paid $15.00/hour; should be $17.50 at a minimum

5. Static resources are preventing SBDC from fully meeting the demand for services in the County. Wait times in the Verde for new clients is 3- 4 weeks, and 2 weeks in the Prescott Office. The part time business advisor in Prescott should be made full time, and there should be a part time business advisor added in the Verde office.

Opportunities: any external factor that offers promise or potential for moving closer to the goals.

1. To gain more clients through referrals by the college a. increase internal marketing activities to explain SBDC within the college community

2. To increase strategic alignment between SBDC and the college

a. to develop recognition within the college that SBDC is a valuable resource – The SBDC should function as an internal management consultant group to the college in areas such as strategic planning, organizational development and systems analysis, marketing, and management and leadership analysis and training. Some of this has happened in the past, such as SBDC assisting the former Provost with strategic planning in the context of the NCA accreditation process; recent SBDC participation in the Verde Valley Medical Center Leadership Training; development by SBDC of the college’s Small Business Entrepreneurship Certificate Program, and future participation with the Office of Instruction to help develop a new online Web Designer Certificate Program.

3. To enhance services to the communities of Prescott Valley and Sedona, and to

partner with other college programs to get SBDC services into smaller communities on a more regular basis.

4. To increase the quantity and frequency of the Small Business Entrepreneurship

(SBE) Certificate classes on the Verde Campus. Threats: any external factor that may limit, restrict, or impede the progress toward goals

1. SBA increased the 2005 goals of all state SBDC’s by 50%, without increasing resources a. to meet these new goals, the SBDC will have to work smarter and faster than ever before. This will include expanded partnerships to produce more seminars; more group counseling/training sessions; and more careful tracking of “information transfers” (short duration discussions with groups, individuals, etc., where SBDC is discussed with non-clients) This must be accomplished without diminishing current one-on-one advisory services.

2. SBDC is often “out of the loop” with major decisions made by the college affecting the program.

a. Example, facility moves, signage on campus, inclusion in college publications, among others.

D. Recommendations

The following improvement recommendations are suggested: Increase FTSE generation by SBDC 75% during the next two years through the following strategies:

• To increase the quantity and frequency of the Small Business Entrepreneurship (SBE) Certificate classes on the Verde Campus.

- Propose giving SBDC functional authority over the SBE program in Verde

• To gain more clients and SBE students through referrals by the college - increase internal marketing activities to explain SBDC within the college

community

• To enhance services to the communities of Prescott Valley and Sedona, and to partner with other college programs to get SBDC services into smaller communities on a more regular basis.

- Increase staff resources and leverage existing college programs going out into smaller communities

• Research the possibility of gaining FTSE generation from the one -on-one

counseling/training time SBDC has with its clients - search out state or national models of this

• Research potential ways of creating FTSE from current non-credit trainings

• The SBDC facility on the Verde campus is plagued with physical issues: roof

leaks; acoustical problems in both the training room and counselor office; and heating and air conditioning problems. - working with Verde administration on mitigation efforts

• Financial compensation for SBDC part-time staff is well below statewide

averages of similar positions within the SBDC network. - Administrative assistant in Verde is paid $7.50/hour; should be $9.00 at a minimum - Tri-City business advisor is paid $15.00/hour; should be $17.50 at a minimum*

* state SBDC compensation data available on request

• Static resources are preventing SBDC from fully meeting the demand for

services in the County. Wait times in the Verde for new clients is 3- 4 weeks, and 2 weeks in the Prescott Office. The part time business advisor in Prescott should be made full time, and there should be a part time business advisor added in the Verde office.

- Submitting 301 proposal to address this opportunity

• To increase alignment between SBDC and the college - to develop recognition within the college that SBDC is a valuable resource – the SBDC should function as an internal management consultant group to the college in areas such as strategic planning, organizational development and systems analysis, marketing, and management and leadership analysis and training. Some of this has happened in the past, such as SBDC assisting the former Provost with strategic planning in the context of the NCA accreditation process; recent SBDC participation in the Verde Valley Medical Center Leadership Training; development by SBDC of the college’s Small Business Entrepreneurship Certificate Program, and future participation with the Office of Instruction to help develop a new online Web Designer Certificate Program.

• SBA increased the 2005 goals of all state SBDC’s by 50%, without increasing resources - to meet these new goals, the SBDC will have to work smarter and faster than ever before. This will include expanded partnerships to produce more seminars; more group counseling/training sessions; and more careful tracking of “information transfers” (short duration discussions with groups, individuals, etc., where SBDC is discussed with non-clients) This must be accomplished without diminishing current one-on-one advisory services.

• Maintain and enhance the Apache Nation contract

- currently in progress

• Support the Yavapai college/NAU partnership as required - awaiting chain of command direction

Yavapai College SBDC Strategic Plan

and One Year Tactical Plan (Action Plan)

SBA/SBDC State Network Initiatives

2004-2007

Goal One- Quality of Products and Services: to consistently offer products and services of increasing quality that fulfill the needs and exceed the expectations of our counseling and training customers Goal Two – Respond to the Needs of Arizona’s Small Businesses: Proactively assess and respond to the changing needs of Arizona’s small businesses with new products and services in light of changing technical, market, economic, social and demographic conditions Goal Three – Return on Investment : Increase the return on investment to organizations providing financial support to the Arizona SBDC network Goal Four – Economic Vitality: to increase the SBDC’s contribution to the economic vitality of Arizona by helping small and medium enterprises succeed

Yavapai College SBDC Strategic Initiatives

2004 – 2007

Goal One : to increase the measurable economic impact of the Yavapai College SBDC by increasing the number of existing businesses served under the retention and expansion categories Goal Two: to continue serving start-up businesses, but in a more effective manner that enables more SBDC counseling resources to be directed toward the existing business community for retention and expansion activities

Goal Three: Maintain the success rate in meeting the SBA/SBDC expectations in regard to clients seen, seminars conducted, and number of economic impact clients served

Goal Four: Enhance the existing partnership between the Center and the Yavapai-Apache Nation

Goal Five: To support Yavapai College’s efforts to build an effective partnership with NAU by assisting in the evaluation process related to community assessment activities, and other initiatives as required

Yavapai College SBDC One Year Tactical Plan

Program Year 2005 1. Maintain 2000 hours of direct client services

2. Conduct 28 seminars for a total of 215 participants

3. Conduct at least 8 “for credit” FTSE generating business classes co-sponsored

with the college

4. Expand partnerships with the county’s local chambers of commerce through co-sponsored seminars and Strategic Performance Retreats.

5. Achieve a total of 69 economic impact clients as defined by the SBA

6. Continue supporting the college’s Business Division in the implementation of

the Small Business Entrepreneurship Certificate Program

7. Maintain and update the Entrepreneur’s Sourcebook of local, county, and state demographic data in support of local chambers of commerce and economic development groups

8. Serve a total of 1,505 counseling and training clients

Major Activities to Accomplish Plans

• Strategic Performance Retreats - Vision and Mission Development - Environmental Scanning (SWOT) - Gap Analysis - Change Management - Continuous Improvement Techniques

- Developing and Implementing Action Plans • Small Business Entrepreneurship Certificate Program “for

credit” classes (SBE Series) - Entrepreneurship - Marketing - Accounting Principles - Accounting sys tems - Finance - Advertising and Sales - Internet Marketing - Legal Issues - Tax Issues - Retail customer Service - Human Resources - Business Planning

• Non-Credit Seminars

- Arizona Department of Revenue Tax Laws - SBA Lending - Licenses and Registrations - General Owning and Operating Issues - Business Clinics - Business Symposium - Drug and Alcohol Free Workplaces - Market Analysis and Demographics - Analyzing Financial Statements - Legal Issues (From of Organization) - Business Planning - Cash Flow Management

• One-on-One Counseling Services The individual Counseling services are tailored to the needs of individual business owners. Common subjects are:

- Turnaround services (businesses in financial trouble) - Expansion services (successful businesses needing financing for growth) - Start-up services (novices needing help with planning and start up capital)

Counseling sessions average 2-4 hours in length – how many weeks or months they continue is determined primarily by the client

• Client Resource Room

- Both full time SBDC Offices have a library and computer workstation available to clients. This is utilized primarily by start-up clients who do not have access to an appropriate office at first. Materials in the library, as well as Internet access, help the clients perform market research, planning, and other activities.

• How to Start a Business in Yavapai County Resource Book

- Given to all new clients

• The Entrepreneur’s Sourcebooks (demographic information on the Tri-City Region and on the Verde Valley Region) - Given to selected clients and community organizations

Responsibility

Responsibility for implementing the plan falls on the SBDC Director Assessment The SBDC statewide MIS system will provide the statistical feedback to assess progress toward the above goals. For classes and seminars, student evaluations are conducted. Also, the SBA monitors the program at least twice a year, providing written feedback on program performance to the Yavapai College President

Appendix # 1

Appendix # 2

Appendix # 3

Appendix # 4

Appendix # 5

Appendix # 6

YAVAPAI COLLEGE

SMALL BUSINESS DEVELOPMENT CENTER

SBDC

2004 ANNUAL REPORT

by

Rick Marcum, Director Mary Ward, Office Manager

Fred Kennedy, Senior Business Advisor A. Roy Horn, Business Advisor/Verde Center Manager

Trudy Elkins – Verde Administrative Assistant

February 15, 2005

for

Mike York State Director

Arizona SBDC Network

Dr. Mike Murphy President, Yavapai College

2

INTRODUCTION The Yavapai College Small Business Development Center (SBDC) is concluding its 14th year of operation. Recognizing that small businesses are the foundation of a healthy economy, the Center continues its mission of helping small businesses succeed. The Center is experiencing a growing number of requests for counseling and training services, and continues utilizing its “Owning and Operating” seminars for new clients who have never owned their own business. This seminar functions as an effective screening device, where clients are either referred directly to one-on-one counseling, to the Small Business Entrepreneurship Certificate program for formal training, to outside professional services, or to a combination of these. This screening concept continues to reduce the wait time for first time clients (without an existing business) to see an SBDC business advisor by 30%. The Yavapai SBDC maintains its support of chambers of commerce, economic development committees, and other business groups countywide. The Center was also recognized in 2004 as a “Center of Excellence” by the statewide SBDC advisory group, Friends of Small Business (FOSB). The Yavapai SBDC also continued its long tradition of generating positive media exposure for the college, with 15 newspaper articles appearing countywide in 2004. Forty four training events were conducted during the SBDC Program Year 2004, attracting 608 participants. Twenty of these were “for credit” FTSE generating classes offered in partnership with the college, involving 221 students. Twenty four events were non-credit seminars, serving 387 participants. The Tri-City and Verde Valley Offices maintained their full-time operations, and the Center continued to provide services one day per week in Prescott Valley (in partnership with the Prescott Valley Economic Development Foundation). The following is a comparison of proposed to actual results of the Yavapai College SBDC during Program Year 2004: 3rd and 4th QUARTERS 2004 YEAR END 2004 Proposed Actual Proposed Actual COUNSELING Total Clients served (training and counseling)

424 488 924 995

Total Counseling and Training Hours

1,100 1,282 1,843 2,551

TRAINING Number of Sessions 8 20 22 44 ECONOMIC IMPACT Capital Formation $25.3 million Jobs Created 162 Jobs Retained 156 Sales Increase $2.6 million

3

Businesses actually started 54 100 ADVOCACY The Center Director and Business Advisors (one full-time, one part-time) continue to be active in advocating small business in Yavapai County. Center personnel serve on economic development councils and other economic development groups, and receive support and exposure through the various chambers of commerce, local banks, and city governments. In the Verde Valley the SBDC Director and the Verde Valley Business Advisor/Center Manager participate in the Central Basin Regional Council meetings and annual economic forum. The Verde Center Manager serves on the Sedona Chamber of Commerce Community Issues Committee, and was an invited participant in the annual Verde Valley Forum on economic development. He was recently named to the board of directors of this group. The SBDC Director serves on the NACOG Economic Development Committee; is on the Board of Directors of the Prescott Economic Council (PEC), and is Chairman of that Council’s Workforce Development Committee. The SBDC Director also serves on the Business Retention and Expansion Committee for the Prescott Valley Chamber of Commerce. Finally, the SBDC Director assisted the college president, and the vice president for economic and workforce development in an economic development initiative in both the Tri-City and Verde Valley regions. This initiative concerned the development of “base” jobs and involved coordination with a consultant from New Mexico. In late 2004, the SBDC Director was asked by the city of Prescott to participate and provide consulting support to the planned Embry Riddle University Industrial Park and Business Incubator. 200 CAPITAL FORMATION In 2004, the Yavapai College SBDC facilitated loans for 21 clients for a total capital formation of $25.3 million added to the local economies in Yavapai County. 300 INNOVATION AND TECHNOLOGY TRANSFER The Center makes clients aware of both government and non-government agencies that provide services in this area. The Center has numerous clients with either copyrights or patents in process. The SBDC is also listed in inventor guides as an assistance center and receives referrals from these sources. 400 INTERNATIONAL TRADE The relatively few requests the Center has in this area are handled in conjunction with the Arizona Department of Commerce, the appropriate foreign consulate, and through SBDC contacts within the Thunderbird Graduate School of International Management. A seminar is being planned in Prescott for early 2005 in conjunction with the state SBDC and NAU that will present information on doing business with Europe.

4

500 MINORITY SMALL BUSINESS DEVELOPMENT The Center has counseled many minority clients this year, including Native American, Hispanic, and women small business owners. The Center continues its work with the Yavapai-Apache Nation. The Yavapai SBDC signed a $5,000 contract in May with the Apache Nation to provide counseling and training services to Apache-owned businesses (existing and start-ups), and another $5,000 contract was signed in October 2004. 600 RESOURCE DEVELOPMENT The Center works very closely with various programs within the Arizona Department of Commerce and the Arizona Department of Revenue, and has leveraged the resources of several financial institutions for the benefit of SBDC clients. The Center also provides information, facilities and assistance for clients to perform Internet and other research for their businesses. 700 PROCUREMENT The Center regularly provides county businesses with information on accessing government contracts. A training was conducted in Prescott in partnership with the SBA and SCORE on this subject during the fall of 2004, and another is scheduled in the Verde Valley in February 2005. 800 SPECIAL EMPHASIS GROUPS The Center is providing outreach to clients in the New Market target areas of the SBA, including working with the Vocational Rehabilitation and Veterans Administrations locally, as well as agencies serving welfare-to-work and other new market groups as outlined in the SBA proposal packet. These special market groups are served through an alliance with NACOG and the local Workforce Investment Board. 900 ECONOMIC DEVELOPMENT The Center works closely with chambers-of-commerce and cities and towns within the county on a variety of community development initiatives. The SBDC Director and other Center staff are members of, or are working closely with, the following groups: Prescott Economic Council; Prescott Valley Economic Development Foundation; Prescott, Prescott Valley, Chino Valley, Clarkdale, Cottonwood, Camp Verde, Black Canyon City, Mayer, Seligman, and Sedona Chambers of Commerce; the Central Basin Regional Council (CBRC); the Yavapai County League of Women Voters; Women in Networking; the Verde Valley Forum; and the City of Cottonwood Focused Future group. Presently the SBDC Director is on the Economic Development Committee of NACOG, and is a member of the Board of Directors of the Prescott Economic Council. The center continues offering its Strategic Performance Retreats complimentary once a month to local non-profit and public sector groups. The college asked the SBDC Director to present a scaled

5

down version of this retreat to the leadership of the Verde Valley Medical Center in 2004 as part of a larger college training initiative with the Medical Center. Another session is scheduled for February of 2005. 1000 RESEARCH The Center provides its clients with the “How To Start a Small Business in Yavapai County” manual. The Center makes available the Tri-City and Verde Valley areas Sourcebooks to aid local chambers and businesses. These Sourcebooks provide important demographic data and other information about Yavapai County and each of the incorporated towns. Both Sourcebooks and the “How To” book were updated in 2004. 1100 OTHER ACTIVITY The Yavapai College SBDC is committed to spending time within the Community organizations of the various cities/towns to learn about relevant business issues in Yavapai County, and to offer assistance when feasible and appropriate. The Center feels that this enhances the learning process about the communities, and, as a result, the Center continues to be viewed as an asset by the various business communities in the County. During this reporting period, a variety of newspaper articles have been written about SBDC activities in both the Tri-City area and in the Verde Valley region, resulting in regular positive publicity for SBDC and the college. 1200 SUCCESS STORIES

JB’s Restaurant Don and Nancy Burton acquired the JB Restaurant location and franchise in Prescott in

October of 1994. Don had worked for JB’s for many years as a regional representative and was presented with the opportunity to purchase the Prescott location (negative image and all). Don and Nancy knew that it was going to be a difficult task to rescue the Prescott location from what seemed to be an inevitable ‘close’ based upon its poor reputation and radically declining sales in a market saturated with restaurants. With SBDC assistance, Don and Nancy were not only able to save the Prescott location but were able to purchase the land and building from the franchise within five years. Due to Don and Nancy’s hard work and perseverance, they presented Prescott with a quality of service and product second to none.

In October of 2004, Don approached the SBDC with an aggressive expansion plan; he wanted to acquire a failing restaurant (including the building and land), in another rapidly growing community, Gilbert, Arizona. He believed his chances of acquiring the needed capital would come at an extremely high risk with high interest rates, collateral requirements that would include a large portion of his personal assets, and a process that would take months of his time. The SBDC provided an analysis of his existing business, and its success, and suggested that Don approach his bank on the following terms: no money down, a 6% interest rate, and a twenty year amortization schedule on a $1.0 million loan. He approached his bank the following morning and presented them with his requirements - the bank accepted his terms the same day. Don and Nancy closed the acquisition in December and went to

6

work bringing the restaurant up to their standards. The restaurant opened January 2005, and their sales for the first month in business were up 14% over sales last January.

Sedona Car Rental, LLC Mr. David Iverson was first introduced to the Yavapai College SBDC program by attending the three hour “Owning and Operating a Small Business” new client seminar at the Verde Valley SBDC. Following the workshop, he began one-on-one counseling sessions with the Verde Valley SBDC Business Advisor on January 12, 2004. Mr. Iverson had just purchased the existing Sedona Car Rental Company located in the Sedona Airport terminal. Upon initial analysis, the Company appeared to not be living up to its full management and marketing potential. The opportunity was clear - Mr. Iverson needed to develop an effective and efficient business operating plan aimed at helping the business grow and financially prosper. The SBDC Business Advisor reviewed and discussed Mr. Iverson’s initial business plan, including his marketing strategy, and conducted an analysis of the company’s financial history and past results. Subsequently, the SBDC recommended that Mr. Iverson should personally attend the Yavapai College (YC) Small Business Entrepreneurship (SBE) program, starting with accounting, marketing, and internet marketing. In the following semester, Mr. Iverson completed each of the three recommended YC courses. During the coming months the SBDC counselor assisted his client in setting up a new accounting system, preparing personal and business budgets, and developing a new marketing strategy integrated with a world wide internet presence. As of this date, the Sedona Car Rental Company has added several new luxury or specialty automobiles to its inventory; the marketing strategy has been enhanced to include a long list of repeat car rental customers, and sales continue to grow. Mr. Iverson looks forward to a long and successful entrepreneurial career as his personal wealth and the wealth of his employees continue to develop.

ENTEK Enterprises, LLC Bill Ertman and Bruce Roscoe came to the Prescott SBDC in April of 2004 with a one year old

business that was suffering growing pains. Entek Enterprises, LLC is a company located in the Bagdad/Hillside area, that manufactures Pre-fabricated EPS Foam Panels for housing construction. The company was positioned to seize on some sizeable contracts, but Bill and Bruce were concerned about their ability to meet the demands of the project. There were personnel, financing, management and leadership issues, among others.

The SBDC worked with ENTEK on developing a five year strategic plan, a one year tactical plan, and a management and operations plan. The need to re-vamp the company’s billing and filing system was the third area addressed. The SBDC also spent time doing a streamlined strategic performance retreat, aimed at implementing an alliance between ENTEK and another local company in a similar business.

With the above steps implemented, ENTEK is now in the process of building 600 energy efficient homes for Empire Corp., and is positioned to get other similarly lucrative contracts. The SBDC continues to work with this exciting, high growth Company. The true economic impact of this business will be assessed in the SBDC Program Year 2005. 1300 TRAVEL

7

Local travel within the Tri-City area, Verde Valley, Phoenix, and Flagstaff. Other in-state travel included the Director attending an economic development conference in Tucson, and a Quarterly SBDC Director’s meeting in Sierra Vista. Out-of-state travel consisted of the Director and one Business advisor attending the annual SBDC National Conference in New Orleans. 1400 PROBLEMS The Center has encountered several challenges during this program year. Both full-time centers were physically re-located by the college from downtown, business district locations onto the respective college campuses (Prescott and Verde). The Verde Center Business Advisor suffered a mild stroke in May, and was on medical leave for four months. The Verde Center administrative assistant resigned at the end of June. Action plans were developed to notify clients of the facility moves, and to develop signage and a marketing plan to help new clients find the centers. A plan was also developed to replace the Verde Administrative Assistant, and to address the Verde Center clients that were not being served during the Verde Center Advisor’s absence. All of these issues have been addressed as the Yavapai SBDC enters into Program Year 2005. 1500 FINANCIAL REPORTS The Center’s financial reports are sent to the State Office (as requested) under separate cover. 1600 WOMEN-OWNED BUSINESSES The Center partners on an ongoing basis with Yavapai County's various special womens programs to provide entrepreneurial services. The Center counsels many women-owned business clients and provides them with information on groups that work with this special interest area. The center is also a member of “Women in Networking”, a local business support group for women. 1700 ECONOMIC IMPACT In 2004, the Yavapai SBDC facilitated loans for 21 clients, resulting in a capital infusion of $25.3 million into the economy of Yavapai County. The SBDC also helped county businesses create 162 jobs, and retain an additional 156 jobs. SBDC clients in Yavapai County saw their cumulative annual sales increase by $2.6 million in 2004. Fifty four businesses opened their doors in 2004 with SBDC assistance. The SBDC state office collects additional economic impact data internally, and will make the information available to its funding partners. 1800 VETERAN AND SERVICE DISABLED VETERAN OWNED BUSINESSES The center serves members of this group through its work with the DES Vocational Rehabilitation program, NACOG, and through referrals from other sources.

Appendix # 7

Appendix # 8