Environment and Government and Economic Development and Small Business

Ivy Tech to host SBDC: State hopes partnership will end instability, help local center shine as consultant

September 25, 2006

The Central Indiana Small Business Development Center hasn't exactly been a pillar of stability that budding entrepreneurs seeking its advice could emulate.

The entity, part of a statewide network of 11 such centers that counsel fledgling businesses, has struggled to find a permanent home-and a capable director-for five years.

But state officials, eager to end the strife, have stepped in to lead a reorganization they hope will return the center to prominence within the local small-business community.

For starters, Ivy Tech Community College has agreed to host the Central Indiana SBDC at its Lawrence campus starting Sept. 30 and provide the necessary financial backing. The center has been a vagabond of sorts since February 2001, when the Indiana University School of Public and Environmental Affairs pulled its support.

Finding a home for the Central Indiana SBDC is long overdue, said Bruce Kidd, director of small business and entrepreneurship at the Indiana Economic Development Corp., since the center should be the beacon of the state's business-consulting services.

"We just didn't have a program that anyone would buy into locally. But to [its] credit, Ivy Tech stepped up in a big way," he said. "We have to have Indianapolis as the shining star within the network."

Next up: hiring an executive director to lead local operations. Kidd expects to have someone in place by the end of the month to succeed David Czerniejewski, the center's third director in four years. Czerniejewski agreed to leave in July after just eight months on the job. Kidd cited a lack of networking skills as the reason for his dismissal.

The state's housecleaning extends to the top of the Indiana SBDC Network, the agency that oversees the state's small business development centers. Its longtime executive director, Debbie Bishop Trocha, was let go about the same time as Czerniejewski. Kidd, who is acting as interim director until a replacement is found, said a lack of progress led to her removal.

"[The centers] haven't been given enough tools or support to do the job they're supposed to; Indianapolis is a prime example of that," Kidd said. "We're not tearing [the network] down and starting over; we're trying to enhance what we have."

Network-wide, full-time counselors must meet with 12,500 clients each year to secure federal funding. The government, however, is dropping the quota to encourage counselors to spend more time with small-business owners.

The centers were so concerned about meeting their numbers that they seldom had time to interact with one another, Kidd said. Now the state is connecting the centers electronically and encouraging more interaction and consistency throughout the network.

In the meantime, the state has contracted with three former SBDC directors to analyze the system. Depending upon their recommendations, it's possible another center could open-or one may close, he said.

Funding critical

The shakeup is part of an effort to improve performance at both the local and state level. The IEDC assumed leadership of the SBDC Network after the governor dismantled the Department of Commerce last year.

State Sen. Johnny Nugent, a Lawrenceburg Republican who chairs the Agriculture and Small Business Committee, said the program's intent to advise small businesses has never been questioned. But what is occurring now is further evidence of the administration's attempt to market the state as pro-business, he said.

The Indiana Chamber of Commerce and the U.S. Small Business Administration launched the network spanning from Evansville to South Bend in 1985. The state Chamber relinquished its responsibility to the state in 1998.

The SBA provides grant money that hosts such as Ivy Tech, chambers of commerce and other business organizations must match. One other school, Indiana State University in Terre Haute, hosts an SBDC.

Federal grant amounts vary depending upon the population and demographics of the area served. The center in Indianapolis receives more money than the one in Kokomo, for instance, simply because it serves a larger region. The central Indiana area includes Marion County and the seven contiguous counties, as well as Madison County.

Ivy Tech is providing $112,500 in cash and $112,500 of in-kind support-things like office space, computers and access to college personnel-annually to match $225,000 from the SBA. The center receives $50,000 in state funding as well.

The central Indiana SBDC was located on Senate Avenue until 2001, when SPEA withdrew sponsorship due to a lack of interested personnel and available funding. The center since has bounced from One Indiana Square, where Alabama-based Regions Bank donated space for about 18 months, to the Indiana Business Diversity Council at 2126 N. Meridian St.

The IBDC was prepared to host the center and had begun negotiations with its former director, Mary Jane Gonzalez. But Bishop Trocha and Gail Gesell, director of the SBA's Indiana district office, favored a partnership with the University of Indianapolis and pursued that relationship instead.

An agreement never materialized, and the rift over who might host the agency led Gonzalez to quit in June 2005. Her predecessor, Edgar R. "Sandy" Levine, lasted less than a year due to financial strains caused by the lack of a host. The center previously had gone leaderless from 2000 to 2002.

The SBDC network provided some funding to supplement the local center's revenue while it was without a host, Kidd said. And the absence of a director reduced overhead.

"It's always a challenge to operate a program while also trying to maintain a level of funding," Gesell said. "Having the stability of the Ivy Tech campus will only facilitate the work of the central Indiana director."

Benefits go both ways

New leadership at Ivy Tech-mainly Hank Dunn, Central Indiana chancellor, and Thomas Darling, executive director of workforce, economic and community development-is eager to get the college more involved in entrepreneurial endeavors.

The initial agreement between the college and the center is for just one year, but Dunn is optimistic the partnership will continue well into the future.

"We hope to make [the center] a functional and important part of the community," he said. "This aligns so well with our strategic plan to reach out to small businesses."

Indeed, Ivy Tech also hosts the Bloomington center and has reached an agreement to sponsor another in Muncie. The idea is that entrepreneurs seeking assistance might pursue further help through other programs the college offers, Dunn said.

Students should benefit as well, by having access to internships and employment opportunities, Dunn said.

That type of collaboration is something the center has lacked since its relationship with IU, said Scott Burns, chairman of the center's advisory board and vice president of SBA credit services at Cleveland-based National City Bank of Indiana.

"Being connected to Ivy Tech gives us access to things we haven't had," he said. "We're able to start with a clean slate and hopefully do some good things."

The center expects to assist 800 to 1,200 small businesses each year and provide training to 300 prospective entrepreneurs.
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