Looking to start a business in Dayton? The area has resources available for doing just that.By Val Hunt Beerbower
“There’s always money in the banana stand!”
Fictional character George Bluth shouted this infamous line at his son for the first time in the “Top Banana” episode of the television series Arrested Development. George meant to imply that there were thousands of dollars hidden inside the boardwalk stand where the youngest Bluth hawked frozen banana treats, but it was interpreted instead as affirmation in the small but mighty entrepreneurial pursuit.
During the recent recession, self-employment took center stage as a means to bounce back from being downsized. According to data published in February 2013 from the Small Business Administration, small businesses (fewer than 500 employees) represent 98.1 percent of all employers and employ 47.7 percent of the private-sector labor force in Ohio. Small businesses employed 2.1 million workers in 2010 with most of the employment coming from firms with 20-499 employees.
But how does one move from the dream of being self-employed to actually becoming one’s own boss? Besides a few gallons of yellow paint and a lot of bananas, it takes industry knowledge, sharp business acumen, a little market forecasting, and a willingness to fail several times before hitting the first success. Fortunately for Miami Valley’s entrepreneur hopefuls, there are plenty of local resources willing to lend insider knowledge.
The first stop on any entrepreneur-hopeful’s list should be his or her city or county economic development office. They might not be able to dish out individual attention, but they can certainly steer potential businessmen and women in the right direction. Montgomery County touts its Business First! resource network, of which the City of Dayton is a member. Business First! is a collaboration between more than 50 government agencies, development organizations and nonprofit corporations.
Anyone who lacks skills or insight necessary to operating an independent business should look into a group of retirees “paying it forward” by doling out information that comes from years of experience. The Service Corps of Retired Executives (or SCORE) is a nonprofit organization that offers business counseling from both working and retired business executives. Free and paid programs fit most any budget.
Technology companies are particularly in demand in the Dayton area, with its proximity to Wright-Patterson Air Force Base, GE Aviation EPIScenter and other emerging aerospace programs. The Dayton Development Coalition has a program to incubate these and more tech-based start-ups. The Accelerant program offers services to help tech start-ups become “investment ready.”
Once an entrepreneur is ready to take the first steps into business ownership, a visit to Dayton’s Entrepreneur Center (TECDayton) would be prudent. This business incubator is part of Ohio’s Small Business Development Centers and provides access to low-cost office space, utilities and administrative services, plus technology infrastructure and access to mentors, as well as free business services, technical assistance and many additional benefits.
“We have hosted over 70 companies and serviced nearly 30 additional companies collectively in the business lab and our affiliate program,” explains TECDayton President Barbara Hayde. “Our companies created over 700 jobs … We have launched several very successful companies who continue to thrive.”
In addition to government and nonprofit-based support to help entrepreneur hopefuls wrap their arms around what it takes to become a successful business owner, there are other programs in place that will help launch new businesses. Two such projects are volunteer based: UpDayton, a nonprofit organization focused on the attraction and retention of young talent, and Generation Dayton, a young professional organization that provides personal and professional development for its members, teamed up in 2011 to launch Activated Spaces.
“We took a look at some successful programs other cities were doing to help them spur growth in their urban core, and we modeled Activated Spaces on those programs,” says Jen Cadieux, business development manager at the Downtown Dayton Partnership who helps manage the volunteer group. The program first used art installations to “activate” vacant downtown storefronts, then began filling the spaces with what are known as “pop-up shops”—providing opportunity for shorter leases at below-market rates as a way for entrepreneurs to jump-start their businesses and contribute to the vibrancy of downtown Dayton.
Since it was started, the Activated Spaces project has launched 11 shops (nine of which are still open), filled more than 11,000 square feet of previously vacant space and created 24 jobs. “A lot of our applicants have really solid business concepts, but as a new business, they’re looking for lower-risk means of getting started, and that’s where we can help,” Cadieux says.
Thanks to the success of the retail shops, Cadieux says the group will also look at ways to activate some of the city’s glut of vacant office space. “We’re testing the waters with this revamped model on a creative services business that plans to open during the May 9 Urban Nights event,” she says. “There are a lot of great businesses out there that need some space, but they have different needs from retail businesses. This is another way we can connect businesses with great downtown spaces.”
Another volunteer-based initiative is the Open Dayton business competition, which grew out of the entrepreneur challenge from the 2013 UpDayton Summit. The Summit is UpDayton’s annual event in which residents can pitch their ideas for improving Dayton that will address a specific need of the young professional community.
“Specifically, we heard from our surveys that jobs and job creation is one of the most important things young people want in a place they choose to live,” says UpDayton Executive Director Laura Estandia. “They leave Dayton and go to places like Silicon Valley because they think that’s where they have to go if they want to be a successful entrepreneur, but we know there are great resources available right here in Dayton that they just don’t know about. Our volunteers selected a project that would highlight those resources and also help launch (or expand) a local business.”
The contest connects several area resources through the process. Application reviews and initial interviews are currently under way; the top 25 applicants will participate in SCORE’s Simple Steps workshop, and the top five will go on to compete for prizes and a possible business loan from Day Air Credit Union. “We will record the process and shorten and serialize the material so even if you didn’t personally go through the contest, you’ll have a better understanding of what you need and what resources are available to start a business in Dayton,” Estandia says.
With so many resources available, it’s difficult to take any argument regarding Dayton’s business development inferiority seriously. “When I hear someone say that Dayton’s not a great place to start a business, that’s simply not true,” says Erik Collins, director of community and economic development for Montgomery County. “We have a lot of great resources like Accelerant and The Entrepreneur Center for businesses that need help getting started, and we have programs like Business First! to address retention efforts, plus [we have] over 100 nonprofit economic development organizations. We have a support system that can nurture businesses and we have a lot of success stories of companies that got their start and continue to be successful in Dayton.”
By now, the array of business-supporting organizations and resources may seem dizzying, but the real take-away here is that at any time, there are lots of people who have invested in the success of future small businesses, and that network is crucial for entrepreneurs, according to Hayde: “The most important advice for a start-up [business] is to surround yourself with smart people who have successfully gone through the same journey you are on and then listen to their sage advice. Know and understand your market before you launch your business—just because you think your idea is the next Google doesn’t mean it is. Identify and test your market to see if anyone will spend money for it.”
“Be sure you have a business plan,” Collins says. “Raising capital is important, but you’ll need a strong business plan to get started.” But once the plan is in place, maintain a comfortable nest egg, according to Hayde. “Cash is king,” she says. “You’re not likely to make significant money for at least the first three years, so be sure to have plenty of money saved up.”
And don’t forget, there’s always money in the banana stand.