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The message in Maine is the same for those starting a business as it is for communities that want to attract business and entrepreneurs — it's all about self-awareness.
One of the top barriers to startup success is the business owner or entrepreneur not understanding how to go about it, says Mark Delisle, state director of Maine Small Business Development Centers.
“They may have a skill set, but are not really familiar with running a small business,” he says. “They may make a great pie, or beer, or be a great life coach, but that doesn't mean they understand how to put a business model together.”
Delisle says a person must have the awareness of their personal assets, but also what they lack, if they want to be successful.
That's true for communities as well, says Peter DelGreco, president and CEO of Maine & Co., which helps recruit businesses to Maine. “A community has to have a plan, it has to know what it's willing to accept,” he says. “Many communities don't want to do the work.”
As post-recession Maine struggles with how to grow a sustainable economy with an aging and sparse workforce, the experts say the capital is there. To tap it, self-knowledge is key at both ends of the spectrum.
The Small Business Development Centers see 1,800 to 2,000 clients a year, says Delisle. Last year, they helped start 98 businesses, creating 338 jobs and saving another 331. All that activity generated $44 million in revenue.
Delisle said many would-be business owners are referred to the SBDC by banks that they've visited looking for financing. The owners are often far away from that stage of business development.
When they get to the SBDC, “most people don't know how to put a business plan together,” Delisle says.
He also says potential business owners have to know how to use a business plan, know what skills and knowledge they bring to the project, and also know what they don't.
Capital is available, but securing it comes in a later step, he says.
Business owners have to be aware of their strengths and weaknesses, and how to fill the gap.
“A lot of entrepreneurs don't recognize that,” he says.
“One of the first things a person should do is a self-assessment: 'Why do I want to start a business?' They should know what their strengths are, but that they're not going to be able to do everything.”
“We tell communities all the time, we counsel them, 'What are you willing to say yes to?'” DelGreco, of Maine & Co., says. “What kind of investment are you willing to make to strengthen the fabric of your community?”
He says a community that asks those questions, and makes sure all its leaders are on the same page, are the ones that attract business.
“Some are terrible at it,” he says. “Every time a new project comes up, there's always a fight.”
He, like Delisle, says there is capital available, but investors want to make sure they're putting their money behind something that will succeed. “They're naturally gravitating toward those communities that have a plan,” he says.
DelGreco says there are many communities in the state that embrace new businesses and are doing a good job recognizing what assets are attractive to businesses.
One of the biggest mistakes communities make is a lack of professionalism — not being prepared to make a pitch or discuss the community's attributes with knowledge.
Another mistake ties into that — the community hasn't done the necessary self-assessment.
“It doesn't have a good definition of what's important,” he says.
That can cause issues ranging from delays to businesses feeling they're not welcome.
Waterville is one community that has become a hub for new business, driven largely by Colby College's investment in the downtown.
Part of the new focus is a technology hub, particularly with the move in 2015 of Collaborative Consulting, which was bought by tech giant CGI two years ago.
The latest startup to move to Waterville was attracted by the technology culture. Ellsworth biotech firm GenoTyping Center of America announced Aug. 21 that it's opening a laboratory in the Hathaway Creative Center.
Co-founder and Marketing Director Michael Greene says that the business was attracted by “access to an emerging technology community...a highly skilled workforce and innovation support systems that are essential for a startup biotech.”
The company, founded in 2012, has experienced rapid growth over the past couple years and its founders say Waterville is the perfect place for that to continue.
“We will be looking to increase our capacity and hire top talent,” says Todd Dehm, CEO and a co-founder.
A dozen miles down the Kennebec River, downtown Augusta is another community that has taken charge of its revitalization, largely through investment by local developers and small businesses.
Downtown Augusta Alliance Executive Director Michael Hall says that incentives combined with a positive community philosophy are the key.
Recent incentives include the Tipping Point Small Business Development program, in partnership with Kennebec Savings Bank, which helps small-property owners renovate and add residential units. Developers are also making use of historic tax credits after 51 buildings downtown were added to the National Register of Historic Places.
“But what really sets downtown Augusta apart from other communities is the chance to be a part of something that's bigger than any one project, business or development,” Hall says. “This is a community in the truest sense of the word.”
The businesses in the city's downtown are mainly small and independently owned, but all add to the overall fabric that those behind downtown development see as being important to sustaining the city of 18,500's economy.
Katie Smith, owner of Circa 1885, a wine bar that opened on Water Street last year, says downtown Augusta has a good mix for entrepreneurs — proximity to state offices, residential areas, and particularly the addition of new downtown apartments.
“When I look at Water Street, I see potential for Augusta to be the capital city all of Maine deserves — a vibrant, local scene with lots of work here/live here/play here potential,” she says.
She moved to Maine from Georgia, where she'd been a project manager, to pursue a better work/life balance, but found an empty space in Augusta that seemed ideal to open a business she'd been thinking about for a while.
She says lower commercial lease rates and “a fairly sizable population that has mostly been served by large, impersonal chains for decades now” make the Kennebec Valley ripe for new business.
Smith says one thing that's consistent statewide, “is the average Mainer's hardcore allegiance to supporting Maine businesses, and I believe that is a great win for small business in this state.”
“Maine has always been a small business state,” Delisle says, but many policy makers are looking for the next “gazelle,” a business that will take off and run, becoming huge.
“It's hard to get excited that a coffee shop opened downtown if you're a policy maker,” he says.
Yet, the typical business in Maine has five to 10 employees, with much of it in small towns and rural areas, he says.
There are many organizations in Maine that support those who want to start a business — besides the SBDC, some others are SCORE, Coastal Enterprises Inc. and its Women's Business Center, the Finance Authority of Maine, the Maine Technology Institute.
“In Maine we have a pretty robust network of products and services that you don't find in other states,” he says.
The groups work together to help those who want to start a business close that self-awareness gap, and communicate well among themselves, but lack resources to do the kind of public outreach and marketing that would make it clear what the groups are, what role they play and how the public can best use them.
“One of the biggest challenges is, how can we get what can be a confusing stream of acronyms to make sense to [entrepreneurs]?” Delisle said.
National lists ranking states' business-friendliness aren't always kind to Maine.
For instance, a CNBC ranking of “business friendly states” published in July ranked Maine 45th, tied with Rhode Island. The list ranked Maine 50th for workforce, 48th for infrastructure and 38th for economy. Its highest mark was 15th for quality of life.
A Thumbtack survey on small-business friendliness released Aug. 14, gave Maine an A-minus, down from last year's A-plus, including a B for ease of starting a business, A-plus for ease of hiring and A-minus for overall friendliness. But it also gave Maine a C-minus for tax code and D-plus for government websites.
Delisle says the rankings obviously don't tell the whole story, but they reflect Maine's challenges.
He lists the aging population, lack of workers, energy costs, tax structure “and for eight or nine months, the weather's kind of rugged.”
“It is what it is,” he says.
There are also things about Maine that are hard to quantify, he says — work ethic, the fact many Mainers work with their hands and enjoy it, entrepreneurial spirit.
He says not only are many millennials focused on following a passion and starting a business, or working for a small one, but so are older workers who may have been downsized or have retired and want to follow a dream.
DelGreco, of Maine & Co., says Maine's business atmosphere is a good one.
“Our pipeline is fairly robust, there's a lot of activity happening,” he says. “Companies are growing and expanding all over the place...a lot of people are doing business in Maine, of all sizes.”