Entrepreneur Fund Strategic Plan Approved August 2011

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1 Entrepreneur Fund Strategic Plan Approved August 2011 Page 1 of 8

2 Overview The Entrepreneur Fund helps people start and grow successful, locally owned small businesses. Our mission is to promote the entrepreneurial spirit and create economic wealth and diversity by providing a range of business development services to emerging and small businesses in northeast Minnesota and northwest Wisconsin. Since 1989, the Entrepreneur Fund has helped start, stabilize or expand more than 1,200 businesses; helped create or retain more than 3,500 jobs; provided over 600 loans totaling $12 million; and served over 10,000 people through its training, consulting and lending programs. More than 85% of business owners who receive assistance are still in business two years later. From offices in Virginia, Grand Rapids, Duluth and Superior, the Entrepreneur Fund serves 11 counties covering a 30,000-square-mile area. Through flexible loan programs, we help individuals launch new businesses and small-business owners expand their operations. Financing is available up to $50,000 for start-up businesses, and up to $150,000 for existing businesses. The Entrepreneur Fund, with its $6 million capital pool, can be the sole lender, or it can partner with banks and economic development organizations to provide financing. The Greenstone Group, an initiative launched by the Entrepreneur Fund in 2008, seeks to foster a culture of entrepreneurship and develop entrepreneurial talent through Business Performance Coaching, and professional services network. Working with business, education and economic development partners, Greenstone Group expects to target support and resources toward 500 entrepreneurs in the region over the 10 years. Entrepreneurs with existing companies, meeting in peer groups or individually with a Business Performance Coach, are committing to develop and continuously improve their entrepreneurial skills, and develop and implement a plan for business growth. The Entrepreneur Fund is a national leader in entrepreneur development and small business lending. Our CORE FOUR Business Planning Course is used by organizations and colleges in 38 states and three foreign countries. Background At the end of 2010, Entrepreneur Fund staff recognized that the organization had achieved most of the goals identified in its strategic plan. In addition, the funding environment had changed significantly, both at the foundation and Federal government levels. Both board members and staff agreed that starting the process early in 2011 was good timing. Kathy Keeley of The Keeley Group facilitated board-planning meetings in February and March of Additional meetings were held with the staff. The board reviewed the draft plan in May and provided final approval in August of Page 2 of 8

3 A parallel, staff-driven planning process emerged in February to respond to funding realities at the federal and foundation levels that we had anticipated for 2012 and were now expected to affect us in As planning progressed, the Entrepreneur Fund board and our clients agreed that the Entrepreneur Fund is a resource the region needs long term. In 2009, the Entrepreneur Fund had been caught unprepared by funding shortfalls, and we knew we didn t have the reserves to weather that sort of storm again. The management team developed an interim financial plan and, with full board support, and in February reduced the staff levels from 15 full-time staff and independent contractors to eight full-time staff and 10 contractors. Elements of staff planning during this process are evident in this new 5-year strategic plan. We have a clear and focused plan to continue the work we do in the region with motivated start ups, growth businesses and financing. We are restructuring and realigning the Entrepreneur Fund and Greenstone Group. We are expanding our use of online training and technology strategies to ensure continued and effective service to the scope of this vast region. We are striving to and are on track to achieve the record goals of our lending staff. Like many other organizations, we started several special projects over the past 5-10 years. The resources we raised to help launch them supported our overall budget, yet were rarely enough to do the work without distracting us from our core efforts. We are winding down these projects. We are focusing on our core strengths to support motivated start-ups and growth businesses, and we expect to strengthen our capacity as an entrepreneurial lender. Environmental Scan The following trends, opportunities and challenges were reviewed in preparation for strategic planning: 1. Loss of funding from public and private sources percentage of funding from earned income, public and private sources is changing 2. Continued volatility of the economy 3. Organization inertia regarding change 4. Special projects, not fully funded, have sapped funding from core services and distracted staff 5. Potential leadership change in next five years 6. Loss of knowledge on the board with long term members going off board 7. Lack of resources to continue programs 8. Creating entrepreneurs appeal to current political environment 9. Have to grow our way out of recession (not cut) 10. Story and messaging important as we go forward 11. Change/eliminate services what is not needed, not wanted, not $ to sustain Page 3 of 8

4 Mission Statement Promoting the entrepreneurial spirit and creating economic wealth and diversity. Vision Statement / Brand Promise We believe skilled entrepreneurs build strong local businesses that create jobs and, ultimately, healthy and sustainable communities. Because of this belief, everything we do whether offering support through the Greenstone Group or financing through the Entrepreneur Fund focuses on helping each entrepreneur build a stronger business. This is how we ensure that talent, jobs and wealth stay in the region and often make a global impact. Guiding Principles We are building a culture that responds and adapts to change We are entrepreneurs ourselves--by experience and Entrepreneur Fund culture--supporting other entrepreneurs. We operate a double bottom line: financial and social. Our motives are: 1) social, to foster entrepreneurship and economic diversification through starting and growing strong, locally owned businesses, and 2) financial, to ensure through efficient operations and building sufficient reserves, the Entrepreneur Fund will be sustainable and contribute to long-term change. We treat our clients and each other with respect. We are accessible and responsive. We value integrity and fair dealing. We provide process, support/encouragement, and tools; the entrepreneur provides passion, content, motivation, and timelines. We are clear about the difference. We are good stewards of our company and community resources. We work as a team, drawing from our individual and collective strengths to perform at the highest level and achieve excellence. We recognize the size of the rural region we serve and we use technology to maximize our impact and ability to serve the region in a cost effective way. We are good citizens in our communities Page 4 of 8

5 Strategic Goals Successful Start-Up Businesses By 2016 developed entrepreneurs with successful businesses as measured by: Lending Portfolio o 125 businesses are started o 85% are still in operation two years later By 2016 the loan fund portfolio will have achieved the following: o 400 loans provided o $5 million growth in the portfolio to $8 million in receivables o Less than 1.5 % net charge offs Growing Businesses and Entrepreneurs 400 entrepreneurs access Greenstone Group services Increase entrepreneurial wealth generated in the region by 2016 as measured by: o Increase in profitability o Increase in gross sales o Change in skills by moving up a CEO tier o Increase in exports outside the region Financial Strength Maintain organizational and financial sustainability and strength as measured by revenue at: o 30% earned income, at minimum o 40% government contracts and grants o 30% private foundation and corporate grants Improved Organizational Capacity Improve and strengthen organizational infrastructure to support high performance and organizational mission. Page 5 of 8

6 Strategic Goal: Successful Start-up Businesses 1. Increase awareness and recognition of the mission, programs and services of the Entrepreneur Fund. 2. Improve website with resources and links to resources for individuals with ideas for starting a business. 3. Develop online tools and resources for individuals wanting to start a business that prepares them for opening the business. 4. Create marketing materials to support business start-ups and how to access tools and resources. 5. Continue strong partnerships with bankers for referrals and cross lending opportunities. 6. Seek opportunities to develop programming in partnership with the community colleges. Strategic Goal: Growing Entrepreneurs and Businesses 1. Retool coaching to focus on the CEO Tier II and III levels with focus on Strategic Assessment and Intervention using coaching techniques. 2. Continue piloting and testing approaches to developing skills for entrepreneurs that are growing their businesses. 3. Develop facilitated growth groups and peer groups for entrepreneurs throughout the region. 4. Pilot and test Baldridge Quality Assessment and coaching with three companies. Evaluate and determine long term use by CEO Tier III. 5. Expand Be Strategic Initiative so that annually 70 CEO Tier I entrepreneurs participate, completing and implementing strategic plans. 6. Create and execute marketing plan to support recruitment efforts for all initiatives. Page 6 of 8

7 Strategic Goal: Lending Portfolio 1. Improve CARS rating for financial performance. 2. Continue seek capital for the loan fund at affordable rates for relending. 3. Review and manage risk in overall portfolio. 4. Maintain strong loan committees with background and expertise to support loan decisions and balance of risk. 5. Maximize use of appropriate loan products and leverage SBA products for lending. 6. Build staff capacity in lending and portfolio management. Strategic Goal: Financial Sustainability and Strength 1. Each business activity has the revenue to support it and its share of overhead. 2. Ensure adequate and affordable capital is available for the loan fund. 3. Ensure revenue exceeds expenses annually. 4. Build a three-month operating reserve to support funding transitions and cash flow. 5. Creatively manage all assets. 6. Increase fundraising efforts aimed at private, corporate and local governmental sources. 7. Generate increased profits from national sales of CORE FOUR Business Planning Course and Greenstone Group products. Page 7 of 8

8 Strategic Goal: Organizational Capacity 1. Develop board structure and increase board capacity for managing the organization during a leadership transition. 2. Evaluate and reevaluate program in light of changes in marketplace and to remain in relevant to customers. 3. Retain and fully develop staff. 4. Accomplish orderly succession and transition of leadership 5. Improve and update data systems to support management decisions. 6. Maximize use of technology to improve access as the market allows and new tools are developed. 7. Be vigilant for opportunities to increase efficiencies throughout the organization. 8. Develop and implement strategies to build the Entrepreneur Fund and Greenstone group brands. 9. Develop and implement an overall communications plan to foster an entrepreneurial spirit in the region. Page 8 of 8