Small Business

Introduction

Small businesses make up 96.5 percent of all employers in the State of Mississippi and employ 49.4 percent of the private-sector workforce. It is evident that the small business community is the backbone of the state’s and the nation’s economy and in struggling economic times it is important, now more than ever, to invest in small business and provide sustainable solutions to keep them growing and succeeding. As small businesses are able to grow and expand, so does the state’s tax base, which benefits everyone.

The Mississippi Gulf Coast has experienced setbacks over the past several years due to disasters including Hurricane Katrina, the national economic decline, and, most recently, the BP oil spill. These disasters have significantly impaired growth and development, particularly hitting small business owners and entrepreneurs throughout the Coast. The Mississippi Gulf Coast has now been given a unique opportunity through GoCoast 2020 and potentially available funding from the RESTORE Act to provide the needed resources for small businesses to recover and prosper.

The Small Business GoTeam’s analysis provided the following recommendations that may or may not be eligible  for RESTORE Act funding. Some may, however, be implemented by other means and provide a blueprint for strengthening the Coast’s small businesses.

Business/Management Succession

Experts state that only 30 percent of small businesses survive the second generation of management and that only 12 percent survive the third generation. As a result, it is essential that small businesses both develop and employ adequate succession plans well in advance of the events that trigger their implementation.

A well thought out and written business succession plan is imperative for the continued operations of a business in the event the owner or a key member of management leaves the company as a result of death, disability, divorce, or retirement. Advance planning can provide a smooth transition to facilitate an expected or unexpected change in the composition of the business. It involves a written plan that will address the orderly transfer of the operations, management, and ownership of the business.

Financing

It has been identified through various research that financial and service resources exist for small business; however, it does not appear the resources are effectively communicated to the end user. There appears to be a vast array of technical assistance available to start up business, while the assistance to existing business is not as readily available. The opportunity exists to create co-ops to cost share expenses that can be costly to small business (i.e. legal fees).

The identification of resources available to bring financial capital to the Mississippi Gulf Coast can bring jobs, sales tax revenue, and economic stimulus to the area. The effective communication of resources is vital to this process. If the end user doesn’t have the knowledge of the resource it could result in a failed business, an expansion of an existing business not moving forward, or a new business never becoming a reality. The continued education and partnerships of small business owners will assist the owners with expanding as the business grows and reacting appropriately to market conditions.

Business Resource Centers

There are numerous incubators, financing, training, marketing, and employee treatment programs that currently exist on the Mississippi Gulf Coast, but many small business owners and entrepreneurs are unaware of these great resources and what each offers. A key priority for the Small Business GoTeam is increasing accessibility to information, training, and education for Gulf Coast small businesses.

Technology/Technology Transfer Center

Technology is ever-changing, and it is difficult for a small business to keep up with and remain knowledgeable of the most current software, marketing tools, and other aspects of technology. Small businesses are in constant need of professional services for marketing, social media expertise, website development, and IT, but are unable to afford these services. There are several existing training programs and access to affordable professional services that assist businesses, both new and existing, but the issue is the lack of knowledge and accessibility to these programs and initiatives. Education is yet again fundamental for small businesses’ continued growth and sustainability. It is necessary to connect this need with services already provided by Incubator systems and Chambers of Commerce. Capitalizing on what already exists is important for maximizing potential and securing long term success.

The Coast has a great resource in the Technology Transfer Center at the Stennis Space Center that provides an opportunity to leverage resources for expanding technology and product lines for existing businesses. In addition, the National Oceans and Applications Research Center (NOARC), which focuses on research and development, is another great resource for up-and-coming businesses on the Coast. It is focused on creating a real world impact on economic development and the private sector and providing innovative technology and solutions to businesses.

Tourism

The Mississippi Gulf Coast faced a lot of hardship following the BP oil spill, particularly the tourism industry. Tourism is a major economic driver for the Gulf Coast and has a direct impact on small businesses. When people travel to the coast, they are more likely to spend money in local establishments, thereby boosting the local economy. An important component of tourism is hospitality. Educating employees in the tourism industry about all the Coast has to offer is an effective way in selling every aspect of the region including hotels, attractions, historical references, and events. These employees will, in turn, pass on invaluable information about the Coast to travelers and tourists, creating greater awareness and increased revenue throughout the Gulf Coast. In order to educate tourist industry employees on the Coast, the creation of a What to do and How to do It film on South Mississippi is essential.

The Small Business Committee of GoCoast 2020 realizes that this subject appears to pertain to Tourism which is being handled by a separate GoCoast Tourism Committee. However, the Committee also recognizes that the small businesses of the Gulf Coast can benefit immeasurably by such a film. The small businesses that actually “deliver” the services of food, beverage, recreation, sports events, retail merchandising, arts and crafts, and entertainment can be featured and displayed in such a film.

Leveraging Resources

There is a vast array of resources available to small business, and these federal, state, and local funds can all be leveraged with potential RESTORE Act funds. Many of the initiatives described don’t require a lot of investment but rather coordination of existing efforts. The greatest need for investment is in providing a comprehensive plan for efficient use of existing resources and expanding upon these programs in order to provide sustainability to the priority areas identified by the Small Business Team.

It is clear that many of the GoCoast 2020 teams’ efforts overlap with the Small Business team. Infrastructure including water and wastewater facilities, roads, and bridges are all needed for a business to operate and succeed. As noted above, tourism has a major impact on small businesses as well as economic development. The need for skilled labor is great for a business to expand and grow their products; therefore, sharing a connection with workforce development. This overlap clearly shows the importance of the defined priority focus areas for small businesses and should be taken into consideration should RESTORE Act funds become available.

Current Initiatives Aiding Small Businesses

Small Business Development Centers
These are cooperative efforts of the private sector, the educational community and federal, state, and local governments devoted to assisting and encouraging individuals who want to start a business or grow one they already own. Below is a list of existing programs currently in place to assist small businesses and entrepreneurs:

Chambers of the Gulf Coast
• Mississippi Coast Chamber
• Hancock County Chamber of Commerce
• Jackson County Chamber of Commerce
• Ocean Springs Chamber of Commerce
• Biloxi Bay Chamber

The Chambers of the Gulf Coast strive to promote community and economic development on the Mississippi Gulf Coast while improving the business climate through facilitating, advocating, and providing information on behalf of the region.

Gulf Coast Renaissance Corporation
The Gulf Coast Renaissance Corporation (GCRC) has helped make distinct improvements to the communities through its focus on bridging the affordable housing gap in South Mississippi and promoting community and economic development through various programs implemented by GCRC to deliver effective and meaningful results.

The Innovation Center
A business “incubator” that provides basic business services to start-up businesses; office and light manufacturing space, business counseling, access to shared services, office equipment, telecom/internet capabilities, and access to common areas. The Innovation Center has had a great success rate in “graduating” successful small businesses.

Gulf Coast Business Council
The Gulf Coast Business Council is the united voice of business on public policy issues of importance to the Mississippi Gulf Coast region. Through leadership and collaboration on targeted strategic issues, it promotes and advances the economic vitality and quality of life of the Coast.

WIN Job Center
The Workforce Investment Network (WIN) in Mississippi is an innovative strategy designed to provide convenient, one-stop employment and training services to employers and job seekers. It combines federal, state, and community workforce programs and services into physical locations and electronic sites.

South Mississippi Contract Procurement Center
SMCPC provides assistance to Mississippi businesses in identifying and pursuing federal, state, and local government contracting opportunities through electronic bid matching. SMCPC also works with the business community in marketing themselves to these agencies, prime contractors, and other private and public companies. SMCPC assists businesses in becoming registered in CCR, ProNet, and ORCA, certified as 8(a), HUBZone, WBE, MBE, and any other programs of interest.

Mississippi Development Authority
MDA provides services such as the Entrepreneur Center to foster investment in Mississippi businesses and industry. Counseling and professional assistance is also provided. It maintains extensive resource materials including demographic data, industry reports, census statistics, as well as maintaining several databases pertaining to resources throughout the state.

The MDA also utilized the State of Mississippi’s SSBCI allocation to develop the Small Business Loan Guaranty Program to provide loan guaranties to help finance small businesses. MDA’s program facilitates capital accessibility for small businesses by providing loan guaranties to banks and other small business lenders. The program’s purpose is to enable lenders to make term loans or provide lines of credit to new or existing small businesses in a difficult credit environment

Mississippi Small Business Development Center–University of Mississippi
The Gulf Coast Small Business Development Center provides a variety of services to small businesses in the south six counties in Mississippi. Services include counseling, workshops, and information services. Resources that are available include business plan development, market analysis, capital sources, technology transfer, federal grant information and other managerial and technical support services.

Harrison, Hancock, and Jackson County Development Commissions
These commissions promote and foster economic development in their respective counties.

Service Corps of Retired Executives
SCORE is a nonprofit organization of working and retired business managers/owners and other professionals who provide free and confidential business counseling and mentoring to entrepreneurs.

Small Business Administration
The SBA provides guaranty loans to finance start-up and existing small businesses, disaster loans for commercial and residential property, and procurement programs such as 8(a) and HUB Zone to help small businesses sell their goods and services to the federal government.

Magnolia Business Alliance
The Magnolia Business Alliance (MBA) is a 501(C)6 not-for-profit corporation acting as a support organization and forum for the advancement of small and medium businesses in the southeastern U.S. Programs run by MBA include the Magnolia Minority Enterprise supporting minority-owned and -operated businesses; the Enterprise for Innovative Geospatial Solutions which nurtures and supports the growth of the geospatial technology small and medium enterprise cluster, and the Waveland Business Center which serves as a small business incubator.

Mississippi Enterprise for Technology
The Mississippi Enterprise for Technology (MSET) is a private, non-profit 501(c)(3) organization that facilitates regional economic development by leveraging the resources of Stennis Space Center, the State, and the region to foster business opportunities among public and private entities.

Mississippi Procurement Technical Assistance Program (MPTAP)
The Mississippi Procurement Technical Assistance Program is an integral element of the Mississippi Development Authority and operates as a bureau in the MDA Minority and Small Business Development Division. The MPTAP, which serves as a Procurement Technical Assistance Center, is funded in part through a cooperative agreement from the Department of Defense through a program that is administered by the Defense Logistics Agency. The MPTAP delivers its services through a statewide network of procurement technical assistance centers.

Hope Enterprise Corporation
HOPE, one of the nation’s leading Community Development Financial Institutions, provides financial products and services in the States of Arkansas, Louisiana, and Mississippi, and the Greater Memphis area of Tennessee. HOPE works closely with Hope Credit Union to provide services directly to individuals around the region. HOPE also manages the Mississippi Economic Policy Center (MEPC).

U.S. Naval Research Laboratory
NRL is the corporate research laboratory for the Navy and Marine Corps and conducts a broad program of scientific research, technology, and advanced development.

Stennis Space Center Office of Small Business Programs
The Office of Small Business Programs promotes and integrates all small businesses into the competitive base of contractors that pioneer the future of space exploration, scientific discovery, and aeronautics research.

Southern Mississippi Planning and Development
The Southern Mississippi Planning and Development District operates various direct loan programs designed to finance new and expanding businesses that otherwise would not be able to obtain conventional financing. It serves 15 counties in south central and southeastern Mississippi. SMPDD also provides some training and census/demographic information.

Trent Lott Center for Economic Development
The Trent Lott National Center for Excellence in Economic Development and Entrepreneurship (TLNC) is the leader in economic development for the State of Mississippi and beyond. TLNC is a catalyst, resource, and convener–providing research and educational resources to economic development practitioners and local, regional, and state leaders, as well as engaging the community with a full spectrum of economic development topics.

Partners for Stennis
Partners for Stennis is a 501(c)6 nonprofit organization that supports space, ocean, and earth research and exploration at NASA Stennis Space Center.

Hancock Community Development Foundation
Hancock Community Development Foundation is a 501(c)3 nonprofit organization that serves as a funding conduit for recovery projects with a broad community focus. The specific purposes of incorporation are to sponsor and support recovery and rebuilding projects; provide grant research, development, and administration to community non-governmental organizations; fund educational and community programs that stimulate job creation, foster small business growth, and support workforce development; support scholarships for the purpose of youth in Hancock County attaining a college education; and fund Hancock Chamber programs that further the purpose of the foundation and economic development and business growth in Hancock County.

USM Business and Innovation Assistance Center (USM/BIAC)
USM/BIAC’s primary function is the identifying, networking, and facilitating of partnerships and opportunities between the state/universities, federal agencies, nonprofits, and industry (focus on small businesses) that leverage their combined resources and capabilities in support of promoting applied technology R&D, its commercialization, and related STEM education.

Conclusion

As previously stated, there are a vast array of financial and service resources available to small businesses with differing funding structures and benefits. Current programs are designed to provide entrepreneurs and small business owners with individual consultation, comprehensive education, and information necessary to help their businesses start, grow, and prosper. However, there is a lack of awareness of these available resources. RESTORE Act funds could potentially be used to better coordinate and enhance existing programs and increase awareness creating a strong foundation for future generations.

A matter of great interest identified by the team as a serious obstacle not only to small businesses but throughout the Coast is insurance. Currently, the Wind Pool is the primary wind insurer on the Mississippi Gulf Coast with approximately 46,000 policies in force totaling approximately $7.1 billion in coverage in the southern six Mississippi counties. Although Wind Pool premiums have not increased since 2007, rates are still high for secondary homeowners and businesses, and subsidies are only provided to primary homeowners.

The answer to the current dilemma is for commercial insurance companies to come back into the market and create competition among the insurers which would cause a reduction in premiums. This would help property owners stimulate the real estate market and cause the Wind Pool to depopulate. Another solution lies in fortifying homes and businesses to withstand strong winds, an effort in which the state is currently making progress. There is also a need for strict enforcement of floodplain management. Building officials, permitting officers, city and county officials must be highly trained in flood management regulations and building code enforcement in order to effectively manage the floodplain. Accurate information is imperative for people building new homes in flood prone areas.

Mississippi is not the only state on the Gulf facing these issues. Partnering with other Gulf States in creating a regional pool that will spread the risk and stabilize loss experience should be considered. The challenge is to create a plan to utilize BP funds in a prudent way to assist in creating a competitive insurance environment on the Mississippi Gulf Coast.

Small Business GoTeam

Co-Chair      George Schloegel, Mayor, City of Gulfport
Co-Chair      Mark Henry, Mississippi Department of Employment Security

Farrell Alman, S.F. Alman, Ltd.
Rep. David Baria (District 122)
Mark Cumbest, Cumbest Realty, Inc.
Don Halle, Gulf Commercial Construction
Rep. Greg Haney (District 118)
David Hughes, Community Bank
Kim LaRosa, Gulf Coast Renaissance Corporation
Bob Mahoney, Mary Mahoney’s Restaurant
Robbie Maxwell, Mayor, City of Pascagoula
Kent Nicaud, Memorial Hospital of Gulfport
Rep. John Read (District 112)
Chevis Swetman, The Peoples Bank
Tish Williams, Hancock County Chamber of Commerce

Non-governmental Organization Advisor:

Bishop James Black, Center for Environmental and Economic Justice