OPPORTUNITIES FOR ADVANCING SMALL BUSINESSES

IN SMALL & RURAL COMMUNITIES

Dr. Nancy Miller

Colorado State University

Business Retention and Expansion Symposium

May 30, 2012

OVERVIEW

• General state of small business (US)• Small midwestern communities

• research findings from Studies 1,2, and 3

• Identified opportunities for business growth and development

• Future application-based research directions

• Discussion

Definition

Small businesses, according to the U.S. Small Business Association are independent businesses having fewer than 500 employees

Our definition is perhaps a micro business in that we frequently look at independent businesses having fewer than 20 employees with annual sales less than $5 Million or $1 Million. Most have annual sales less than $500,000.

• Represent 99.7 percent of all employer firms.

• Employ about half of all private sector employees.

• Pay 43 percent of total U.S. private payroll.

• Have generated 65 percent of net new jobs over the past 17 years.

• Hire 43 percent of high tech workers (scientists, engineers, computer programmers, and others).

• Are 52 percent home-based and 2 percent franchises.

• Made up 97.5 percent of all identified exporters and produced 31 percent of export value in FY 2008.

• Produce 16.5 times more patents per employee than large patenting firms.

Overall State of Small Business (US)

Overall State of Small Business (US)

• Small businesses with 20-499 employees are leading the charge in increasing private-sector employment.

• From the second quarter of 2010 to the first quarter of 2011 (the latest firm size data available), private-sector employment rose and these larger small businesses represented over 50 percent of the growth.

• Small businesses with fewer than 20 employees represented only 12

percent of the employment growth over this time period.

Additional Information Seven out of 10 new employer firms survive at least 2 years, half at least 5 years, a third at least 10 years, and a quarter stay in business 15 years or more.

Small businesses rely heavily upon owner investment and bank credit, averaging about $80,000 a year for young firms.

SMALL MIDWESTERN COMMUNITIES RESEARCH FINDINGS

Examples

Study 1

Study 2

Study 3

8

“The biggest problem facing small businesses is not being small, it is being lonely” (Pyke & Sengenberger, 1992, p. 11).

Barriers to Survival and Growth• Outshopping & Outsourcing • Distances and isolation

• The US has a whole has an average population density of 95.7 people/square mile, the Midwest states we study have 37.1 people per square mile. (Europe has 298.5)

• Lack of interstate roads, adequate train systems for movement of people and goods through these remote areas.

• Working multiple jobs to • Creative enough income to stay in place• Generate insurance coverage• Supplement the small business that may be informal rather than a

formal business.• Informal involves licit but unregulated work by individuals who do not

comply with standard business reporting practices (www.fieldus.org)

ACRA 2009 10

Small Community – Triple Jeopardy

•Fewer people

•Fewer dollars

•Fewer purchases

Small Community Situation

Small Community Erosion of:• Public Infrastructure• Community Business Base• Skilled Workers • Young Families

Nationally Nebraska, Kansa, Iowa ranked very low in growth of women-owned businesses (43rd, 48th and 49th respectively), 2010 Census Report

Small Midwest US Communities Research 1998-2012

• 3 Studies• 1. Survey of Small US Businesses - US Department of Agriculture

• 1998-2001

• 2. Study of Business Networks – USDA Fund for Rural America and the National Science Foundation

• 19 Existing Business networks in 4 Midwest States• Development of 5 new networks in 4 Midwest States

• 2002-2009

• 3. Amenities and Small Businesses in 3 Midwest States - USDA• Including a closer look at women and minority business owners

• 2009-2012

1. Small Community Influences on US Entrepreneurs’ Goals, Strategies, & Success

PURPOSE• Examine theorized linkages between social factors within the small community and the entrepreneurs’ adoption of goals and business strategies for overall business success.

• Determine if economic-based as well institutional–based strategies have been adopted by entrepreneurs operating in small US communities.

• Provide information for strengthening small business success.

N. J. Miller

Definitions• Small Business – fewer than 20 employees and

annual sales of less than $1M.• Small Communities – 50,000 or less across 4 US Census Regions• Entrepreneurs – purchased/launched the business,

expected growth, and assumed high risks in management of their operation

• Standard Industrial Classifications• agriculture, construction, transportation, wholesale,

retail, F.I.R.E., commercial services, and personal services

N. J. Miller

Institutional Theory• In the economic environment where the product or

service is exchanged, there are community norms or rules that require conformance if the organization is to receive support and achieve legitimacy.

• Concept of LEGITIMACY – acts of an entity are appropriate within a socially constructed system of beliefs (Suchman, 1995)

• Concept of LOCALITY - “Within a localized business community, firm interactions build a collective capacity for entrepreneurship.” (Johannisson et. al, 2002)

• “Paradoxically, the enduring competitive advantages in a global economy lie increasingly in local things – knowledge, relationships, and motivation that distant rivals cannot match.” (Porter, 1998)

N. J. Miller

Variables - Example Study As perceived by small business operators:

• Evidence of Legitimacy = degree of community concern for the business (continuous)

• Long-Range Goals (suggested five+ categories)

• Achievement of Goals (continuous)

• Business Strategies -importance of fourteen • (continuous) (Mulford, Schrader, & Hansen, 1988, Miller

& Besser 2000)

• Overall Business Success (continuous)

N. J. Miller

Method

• Stratified systematic random sampling – 1,350• Steps

• Completed 818 telephone interviews (61% response rate)• 809 sent a follow-up mail survey (yield of 505 responses)• Elimination of agricultural SIC – inadequate formulation of responses

to business strategy questions• Further stratification of entrepreneurs from business owners N=205

• Questionnaire/Survey items were 5 point Likert-like scales• Analyses = descriptive, factor analysis, ANOVA,

simple and multiple regression, SEM• <.05 Level of Significance• a = .70 or higher

N. J. Miller

Entrepreneur Characteristics (from a study of N=205)

• Retail & Service Firms = 110 (53.7%)• 95 or (46.3%) in construction, FIRE, manufacture,

wholesale, transportation, mining• Gender = Males 57% Females 43%• Caucasian 95%• Age = M 49 years• Marital Status = 83% married• Child < 18 yrs = 60% none, 30% 1-2 children• Education = 61% some post high school education• Employees = 32% none, 53% fewer than 4 employees• Annual sales for 1999 = $224,900

N. J. Miller

Entrepreneur Characteristics• Lived in Community = M 20 years• Size of Community = M 2.2 1. < 2,500 = 30% 2. 2,500 – 4,999 = 17.6% 3. 5,000 – 9,999 = 19% 4. 10,000 – 50,000 = 33.4%• Started business = 67% (22% purchased)• Owned the business = M 12 years

(half owned less than 10 years)• Age of the business = M 17 years• Census Regions = Northeast 26.9%, North Central 27.3% South 14.5%, West 31.3%

N. J. Miller

Entrepreneur Characteristics• 81% successful in achieving their goals (M=4)• 81% successful their overall business (M = 4.18)• 93.6% were satisfied with their type of work(M = 4.57)

• Perceived community concern for their business: 53.4% disagreed, 38.7% agreed 7.8% neutral (M = 3.16)

N. J. Miller

Prevalent Business Strategies

The importance of:• Offering quality products and services• Developing a good business image• Developing managerial skill• Training employees

Strategy Scale: a on all 14 strategies = .70 (M = 3.7)

N. J. Miller

Most Important Long-Range Goal• Maintain a positive reputation with customers (39%)• Make a profit (28.3%)• Provide a valuable service to the community (12.2%• Provide a sense of personal accomplishment (11.2%)• Grow or expand (9.3%)

N. J. Miller

Small-Sized Rural Businesses’ Planning Strategies

It is important in the small community to:

1. Offer quality products or services

2. Maintain a good business image

3. Develop your own professional skills as a business manager

4. Cooperate with other local businesses

5. Train your employees

MIXED METHODSExploratory Squential Instrument Design

Exploratory Explanatory Exploratory

Explanatory

Step 1 QualitativeFRA

Step 2 QuantitativeFRA

Step 1 QualitativeFUTURE

Step 2 QuantitativeNSF

Step 1 QualitativeNSF

Overall, a mixed method design used.

Phase I Phase II

2. Study of Business Networks

Fund for Rural America – USDA and National Science FoundationBusiness Networks & Rural Community Economic Vitality

Summary1. Multi- Year project ($450,000)

• Jan. 2002 – 2005• 3 Phases involving

• data collection from existing business networks

• creation of new business networks

• development & distribution of outreach materials

2. Project funded by NSF 2005-2009

• Examine the new networks’ development

ACRA 2009 26

Problem: Small businesses in small communities disappearing or failing to thrive

Operational Definitions

• Small Community – less than 10,000 in population, agriculture base, non-adjacent

• Small Business – less than 20 employees, less than $5M in annual revenue.

• Networks: groups of businesses joined in voluntary formal organizations ( i.e. the networks contain officers, by-laws, dues, regular meetings) of indefinite duration having as one primary goal the enhancement of business success.

Sampling in Phase 1:• Telephone interviews with 1122 network members of 29

networks• Information supplied by the network director• Compiled at the network level

• Averages or percentages from network members• Answers from directors

• Quantitative• Qualitative

Sampling Strategy

797 Potential Networks

78 Selected Networks

29 Networks Agreed to Study

2,071 members

1,122 completed interviews

Sub-sample of Small Businesses n=377

Characteristics of the 29 Networks

• State – 11 in IA, 7 in OH, 6 in NE, 5 in MN• Industries – 4 agriculture, 2 construction,

2 FIRE, 3 manufacturing, 3 retail, 2 business services, 2 personal services, 1 home-based business

• Communities - majority <10,000 population• Age - 3 <10 yrs, 6 =10-25 yrs, 8 >50 yrs,

3 >100 yrs• All 29 networks represented in the

subsample of 377

Small Business Owner Characteristics

• 13.97 years as owner (average age of business 32 years)

• Started the business (57.1%)• Sole proprietorships (48%) or corporations

(47.5%)• Employees averaged 4.59 (16% no employees)• Revenue $480,035 for 2002• Rated their business success 7.19 (10 pt. scale)• 61% intend to expand in the future• Membership 13 yrs (out of 14) – joined early

High Performing Networks • Higher status members• More trust, commitment, shared vision among members• Greater frequency of communication among members• A newsletter• Greater resource flows between members

• Both high trust and low trust

• Higher instrumental motivation• Accomplishments and Influencing public

• Greater variation in length of membership• More members

Keys to Creating and Sustaining High Performing Business Networks1. Create and utilize mechanisms to develop trust and

shared vision among members• Ground rules, awards for exemplary sharing, sanctions, role

models among high status members, opportunities to work together

• Selective recruitment of new members

Keys to Creating and Sustaining High Performing Business Associations2. Effective communication mechanisms, especially a

newsletterWorkshops on internet usage

Association internet bulletin board

Special rewards for newsletter contributions, outsourcing, sponsors

Keys to Creating and Sustaining High Performing Business Associations3. Mechanisms and/or structures to facilitate resource

flowsRegular visits to each others’ businessAn easy to use referral systemWorkshops and programs to facilitate and inspire cooperative

arrangementsTime and opportunity for sharing information, both formal and

informal

Keys to Creating and Sustaining High Performing Business Associations4. Effective public relations and lobbying for member

interests

5. Attract and retain prestigious members(they bring status and clout)

Keys to Creating and Sustaining High Performing Business Associations6. Programs to help businesses be more successful

7. Information to members about the contribution the association makes to their business and personal success

The Study of Business Networks and Rural Community Economic VitalityPhase 2:

Intended to learn what successful business networks do to motivate and retain membership and to use this knowledge to start new business networks

Theoretical Foundations

• Social Capital Theory: social connections, which may be characterized by norms of accepted behavior and trust, enable participants to act together in pursuit of shared objectives.

• Strategic Networking Theory: Focuses on the development of trusting and reciprocal relationships among business owners as a tactical stance in competitive markets.

• Network structures can generate the competitive advantage known as social capital (Burt, 2001). Networked businesses are embedded in social relationships with other businesses that over time can generate trust and expectations of fairness and reciprocity (Granovetter, 1985, Grabher, 1993)

Potentially Important Factors• Resource sharing• Shared Vision• Benefits to Business• Advantages to Network Members• Network Continuance

• Concepts posited in Strategic Networking and Social Networking Theory

Proposed Model& Hypotheses

Definitions:Resources – tangible and intangible entities used by the business to compete

in the marketShared Vision – individuals having shared values and motivations Strategic Planning – deliberate process of attaining and adapting to fit

resources and tactics to market opportunitiesAdvantages of Networking – resulting end-products of cooperation and

collaboration Network Continuance – likely preservation of the organization through

continued membership

H3 Not Significant

H6H1 H5

H2

H4

High Risk Resource Sharing x1

Shared Vision x2

Advantages of Netw orking h4

Benefits to Strategic Planning h3

Netw ork Continuanceh5

“Grow Your Own Small Market” Network

Iowa

Newsletter & Meetings

Entrepreneurship Club in Atlantic, Iowa

Meetings

Specialty Store Network in Nebraska

Newsletter, Meetings, &

Sharing Market/Product Info

Chef – Grower Network in Ohio

Spanish Speaking Business Association in Ottumwa, Iowa

Newsletter and Meetings

Phase 3. Blueprint for Starting Business Networks - 6 Modules

http://www.soc.iastate.edu/ruralnetworks/

1. Why Networks?

2. Encouraging Resource and Risk Sharing – building shared vision

3. Communication

4. Recruitment of Members

5. Leadership

6. Transforming an Informal Group into a Formal Network

Blueprint for Starting New Business Networks

http://www.soc.iastate.edu/ruralnetworks/

Blueprint for Starting New Business Networks

http://www.soc.iastate.edu/ruralnetworks/

Theory Testing – Concepts & Relationships

Adoption From Members

Network Success

Perceived Benefits From Networking

Educational Activities

Social Capital

Network

Activities

Social Exchange

Communication Activities

Strategic Network Development

Early Network Development

Challenges to

Member

Businesses

Reasons for Networking

Characteristics

Business SuccessSharing

3. Amenities and Small businesses in rural Communities• Focus on Women and Hispanic Business Owners

• Attempting to build a tool for manual indexing amenity levels for various geographic locations• Recreation, Tourism, Community life, Marketplace Exchange =

Rural Well-Being

• Recreation and tourism have been both praised and criticized as a rural development strategy• Contributes to local employment…• Raises housing costs

Recent Reports• http://www.soc.iastate.edu/rural/reports.html

Research Methodology• Data gathered from structured interviews with

1,030 small business owners living in 18 small communities located in Nebraska, Kansas, & Iowa ( 6 towns per state).

Four New Destination rural towns (populations of 500 to 10,000) located in non-metropolitan counties with at least 10% Hispanic population

Two towns similar to the New Destination towns in size, location, economic base and region of the state but without the influx of Hispanic population

Participants• Descriptive Statistic Summary

• Owners – 718 males, 308 females • 92% Caucasian, attempted to over sample Hispanic business owners• Some Post Secondary Education (not a B.S.)• Age 53.9 years with 19.2 years of business experience• Men had owned their businesses significantly longer than women

• 20.52 years for men vs 16.11 years for women

• Business – • Age 29.77 years (22.8% >10 years, 9.2% >5 years)• Number of employees averaged 6.68• Business revenue - Males $200-300,000 vs. Females $75,000 to 100,000• Larger % of male owned businesses were inherited or purchased from a

family member, whereas women started or purchased from a non-family member

• Types of businesses – Male and Female significantly different . Male owners were in agriculture, wholesale trade, finance/insurance, professional/scientific/technical services . Female Table 2

Business Type NAICS Code

Number of Businesses

Percent Female

National Percent Female

Agriculture, Forestry, Fishing, and Hunting 11 98   6.5 .3

Utilities 22 1   0 .1

Construction 23 35   .7 3.5

Manufacturing 31-33 33   1.6 1.4

Wholesale Trade 42 41   1.3 1.7

Retail Trade 44-45 212   27.4 11.2

Transportation and Warehousing 48-49 10   2.3 1.8

Information 51 13   1.3 1.2

Finance and Insurance 52 96   6.5 2.6

Real Estate, Rental, Leasing 53 37   4.2 8.5

Professional, Scientific, and Technical Services 54 76   7.2 14.0

Administrative and support, Waste Management, Remediation Services

56 9   .7 10.3

Education Services 61 1   .3 3.6

Health Care and Social Assistance 62 31   3.3 15.7

Arts and Entertainment and Recreation 71 7   1 4.9

Accommodations and Food Services 72 76   10.7 2.4

Other Public Services 81 188   22.1 16.1

Public Administration 92 26   .2 NA

Table 2: Business Products or Services Provided (N= 1023)

Example study examining the small businesses in the 18 communities• Motivations measured by 10 Likert-type questions factor

analyzed to create three types of motivations – Table 1

• Risk Perception measured on a single item • five point scale from which a High/Low bimodal variable was

created (Never, Seldom, Sometimes = Low and Often, Very Often = High)• Low Risk (n=709) High Risk (n=307• Significantly more women were in the low risk group than the

men (75.8% of the women vs. 67.2% of the men)

• Question:• How often are you willing to take a high (or great) risk in business

related matters?

• 1= Never to 5=very often (3.00 Mean, 1.08 S.D.)

Table 1. Indices for Motivation Variables (N=1030)  

There are a variety of reasons that people decide to go into business. We’d like to understand your motivations for becoming a business owner. Please rate the following possible reasons where: 1 = not important to 5 = very important. Mean

Standard

Deviation

Component

Factor Statistic

 

Extrinsic Motivation Factor Cronbach’s =.70., variance explained = 12.3%  

1. Greater financial security for yourself and your family 4.03 1.13 .794   2. Having a chance to earn great wealth or a very high income 3.02 1.31 .689   3. To provide an income for yourself or your family 4.04 .93 .735

 

Intrinsic Motivation Factor

Cronbach’s =.53 , variance explained =10.3 %  

1. Building business your children can inherit 2.61 1.50 .559   2. Developing new ideas for products or processes 2.63 1.42 .821   3. Challenging yourself 4.09 1.02 .627  

Family Motivation FactorCronbach’s =.63 , variance explained = 32.9%  

1. Achieving a higher position in the family 2.83 1.53 .569

2. Having flexibility for personal or family life 3.84 1.34 .606 3. Being respected by your friends and family 3.14 1.39 .713 4. Family tradition 2.60 1.64 .667       

 

Research Results• Risk taking does have a significant effect on:

• Extrinsic Motivations • Intrinsic motivations

• Gender held a significant effect for Extrinsic Motivation• Males = 3.87 M, Females = 3.69 M

• Among High Risk Takers, Males are significantly higher in Extrinsic Motivation than Females

Purpose and Method• The purpose of this study was to present an amenity inventory

appropriate for small rural towns – with the premise there are variations in amenities among small communities not yet examined or considered.

• We deemed it important to measure both the quantity and the quality of the amenities.

 • Information for the amenity inventories was gathered through

interviews with key informants in the towns (parks and recreation, county extension, development, and library staff and city officials), accessing official reports, and through researchers’ observations. Researchers visited each town in the summer, talked to local residents, observed designated amenities to rate them for quality, and mapped the downtown. The information contained in the inventories can also be gathered by residents.

Amenity Inventory - Designed to be conducted by community groups

• Natural Resource Amenities in the County• Built Outdoor Recreational Amenities within City

Limits• Indoor Recreational/Entertainment/Cultural Amenities

within the City Limits• Public and Private Service Amenities Located within

the City Limits• Downtown Amenities

Amenities: Indoor recreational/entertainment/cultural amenities within the city limits• Public aquatic centers/swimming pools 0 = no, 1 = yes • Bowling establishments 0 = no, 1 = yes • Pool/billiards establishments 0 = no, 1 = yes • Video arcades/laser tag/bumper car establishments 0 = no,1 = yes• Community playhouse 0 = no, 1 = yes • Movie theater 0 = no, 1 = yes • Historical museum 0 = no, 1 = yes • Art gallery 0 = no, 1 = yes . • Number of public/private gyms and recreation centers • Number of festivals/events in 2008 • Attendance at most recent event • Frequency of plays in 2008 • Condition of public library building 1 = poor, 5 = great • Number of items in the public library circulated per resident• in 2008• Number of subscribers to the local newspaper in 2008

Findings• Expected: the New Destination towns would have

experienced a revitalization of their downtowns due to Hispanic businesses operating in what were formerly empty store fronts and Hispanic residents renting downtown over-store apartments.

• Expected: the presence of a large Hispanic population would enhance the number and variation of festivals and other cultural events with changes apparent in downtown and outdoor/indoor recreational and cultural amenities

• Findings: When compared to towns of equivalent size, economic base and location in the state, the New Destination towns did not exhibit higher levels of amenities.

FindingsBusiness Association membership and Amenities• Towns with a higher proportion of business

owners/managers who are members of community business associations have significantly higher scores for public and private service amenities than towns with fewer businesses in community associations.

• Membership in trade associations had an opposite finding. Greater the number of business owners/managers who belong to business associations (i.e. Chambers of Commerce, bed and breakfast…) the lower the town’s scores on indoor recreational and cultural amenities and public and private services

FINDINGSSummary of key pieces of information from 3 studies

Overview• Small businesses in small communities conduct business

in the economic environment as well as the institutional environment of the marketplace.

• Small business owners considered themselves +successful, though success was not solely defined as financial

+Satisfied with they type of work

- Did not believe the community held high concern for their business

• Majority of owners have some post high school education, were married with children, middle aged.

Overview (Continued)• Strategies focused on

• Quality products/service• Solid business image• Continued development in management and employee training

• Goals supported the strategies• Maintain a positive reputation/image• Make a profit

• Networking Importance… both formally and informally• Collective power in changing/supporting legislation• Personal socializing• Enhance market knowledge and management skills

Identified Future or Continued Opportunities for Business Growth and Development• Business Networks

• Growing and sustaining as competitive advantage• Cooperating versus competing

• Amenity Assessment and Promotion• Helping communities help themselves

• Growth of women-owned businesses offers possibilities for economic momentum and population increase• Addressing gender differences in startup funding, networking….

• Community matters• Support from the community often not perceived• Community social environment can affect the economic environment

Opportunities for Student Experiential Learning

• Exposure to small business ventures• Graduate - thesis research, presentations, publications• Undergraduate – application, research

• Small Business Owners received • Feedback ideas on merchandise and physical space• Merchandise budgets and planning• Networking meetings, conversations, newsletters

• Community Partners• Economic development agencies• Chambers of Commerce• Extension• Small Business Development Centers• Librarians• Immigration support groups

Translating School Work to Real World Experiences: Small Stores in Small U.S. Communities

Section One:

The Early Years

Section Two:

Changes Over the Years

Section Three:

It’s the Little Things

Section Four:

Small Business Experiences

Section Five:

Advice

Section Six:

Outlook

Broken Bow Case Study

VideoSections

Applications to Teaching

Alexis EricksonMerchandising Undergraduate Student

&Jennie PriceMerchandisingGraduate Student

Store Front on Main Street U.S.A.

Interior

The Clothing Company

O’Neill, Nebraska

Kearney MarketSeptember 27th-28th

Volume 3 Issue 8

September 2006

Nebraska Apparel Store Association

NA

SA

It is time again for the Kearney Market. The group is planning to meet on September 28 following the Kearney Market. We will be meeting at the Ramada Inn in the Lotus room. The meeting will begin at 3:30 pm, end at 5:00 with dinner following the meeting. The address for the hotel is 301 Second Ave. and the phone number is (308) 234-4675.

As mentioned earlier we will be hearing from guest speaker Sherri Sobotka from Rural Radio Network, CRMC Regional Account Manager, Columbus, NE– Marketing/Advertising. She specializes in advertising and will be enlightening the group on how to better market your business. Please Bring your advertising techniques and examples to share with the group. if you would like copies of the information we received from Sherri at the summer retreat, please let me know and we can bring copies to the meeting. You may reach me (Audra Soukup) at aasoukup@gmail.com or by phone: (308) 390-5754. I will be in contact the week before market to get an idea for attendance.

At our previous meeting we suggested adding new members. If you know of someone that is interested or would like to make a suggestion to the group, please do so at our next meeting. Also, please be prepared to give input on attending the MAGIC Show in Las Vegas.

We are looking forward to seeing everyone!

RESEARCH OUTREACH

Quarterly Newsletter - for member stores

Hello, P.R.I.D.E. members! This is the second issue of the newsletter, and we thank you for your membership.

With you and your belief in the movement of change P.R.I.D.E. is creating, we are making progress! Here are some of the highlights since our spring issue!

Community News! We’ve finished our third year of Community Builders – here are just a few things we learned!

Cumberland: We were all excited to tour Cumberland for the first time in August – what a treat! Abraham Lincoln (a.k.a. Lee Williams), was our host. He reminded us of two timeless qualities Lincoln described as essential leadership traits: perseverance, and integrity. He said, “a good leader takes people where they want to go. A great leader takes people where they ought to be.” We heard all about their great community center, visited the fire department, learning of their new jaws of life and air compressor, which is available for use by surrounding towns. They are working to update some of their fire suits. Floyd Pearce allowed us to tour his wonderful Pterodactyl Press facility, where he prints, edits, and sets type. He also teaches papermaking and bookbinding. Fascinating! Cumberland is looking good and P.R.I.D.E. is encouraging the town leadership to continue their efforts to clean up the town. What they are doing is working, as more than six new families have moved to town this year. Great attitudes make a great community atmosphere in which to live!

Massena: We had a great turnout for this tour, too. Their city council received a $12,000 grant for a study to revamp their high curbs on Main Street and do some streetscaping. They are seeking grants to act on the recommendations. This town, too, is working hard to clean up lots and buildings that are eyesores in town. P.R.I.D.E. is checking into laws to help our small towns with tearing down old, abandoned, decrepit properties – see notice on page two. The town feels a need for condo-type housing with at least 1200 square feet – there are a few people working on this, and are considering getting a housing group together. The summer celebrations were fabulously attended and all were safe. Jerry Putnam and Randy Baxter attended a summer city council meeting and answered questions they had about P.R.I.D.E. membership, development underway and future plans. Wiota: Lamar Spies reports that, unfortunately, their Labor Day celebration was cancelled. Their playground in the city park needs some work and there may only be picnic tables for a while. Atlantic: C.J. Peterson reports that the new high school group, Just Eliminate Lies (JEL) kicked off their activities September 13. JEL is a national advocacy organization with 4,000 members in Iowa alone who work to eliminate tobacco use. The Atlantic goal is to have a tobacco-free campus in 2006. He reports that one challenge is that the school administration doesn’t support this goal.

Shared with P.R.I.D.E.! Fall, 2006 Newsletter

404 Main Street, P.O.Box 715, Griswold, IA 51535 712-778-5060

Membership P.R.I.D.E. has 73

members, ranging from high school students to our largest contributors:

the cities of Anita, Cumberland, Griswold,

Lewis, Marne, and Massena; Rolling Hills

Bank and Trust; and First National Bank of Massena. Thank you! We are gearing up for

our 2007 drive!

Characteristics of Ow ner//Manager

Business Plan

Needs of the Business

Characteristics of the

Business

Long Term Goals/Vision

Communication

Expectations

Network Formation

Motivations-Expressive-Instumental

Year 1Stage 1

Netw ork Development(Longitudinal

Observations)

Network Structure

Newsletters

By Laws

Social Capital-Solidarity-Reciprocity-Values

Norms of Reciprocity

Bounded Solidarity

Shared Vision

Values Introjection

Trust

Cooperative Ties-Manifestations-Development

Cooperation

Recruiting

Adjustments

Conflict

Resolution

Relationship Building

Innovations

Information Exchange

Risk-Low-High

Long Term Goals/Vision

Leadership

Legitimacy

Advocacy

Policy Influence

Resource Flow-Low Risk-High Risk

Year 2-3Stage 2

Business Success

Motivations

Year 4-5Stage 3

Accomplishments

Benefits to Business

Advantages to

High Performance

Netw orks

Future of the Network

Stability

Continuence

Meetings Structure

Community Support

Cohesion

Community Impact

Collective Level

Informal Formal

Less UNL leadership but

continued support

Organizational Change

Individual Level

Beginning Ideas

New concepts as we worked

Based on research questions for NSF

Grant

New additions and concepts

Organization Key

NSF Qualitative Model of NASA Network

Research Theory Development Undergraduate Level

FUTURE RESEARCH Potential Directions

Future Directions• Family owned businesses• Neighboring states or regions –

• recent findings indicate a small business positive spillover effect rather than a siphoning – acting like cooperative teams (networking) rather than competing (US Small Business Assoc.)

• Minority Business Owners• Non successful or less successful business owner• Community amenities and small business ownership

DISCUSSIONIdeas for going forward in Canada

N. J. Miller

Table 1 Descriptive Statistics for Business Strategies and Test of Hypothesis 2 - Factor Analysis ( N=205)

Factor 1: Institutional-Based Strategies Eigenvalue 2.98Percent Variance Explained 25.66 Factor

'1' Not Very Important '5' Very Important Mean S.D. Loadings

Good Business Image 4.67 .86 .684 Cooperation with Other Local Businesses 3.98 1.22 .831 Strengthening the Local Community 3.79 1.29 .831 Exchanging Information with Local Businesses2.96 1.29 .431

Factor 2: Economic-Based Strategies Eigenvalue 1.25Percent Variance Explained 21.33 Factor

'1' Not Very Important '5' Very Important Mean S.D. Loadings

Quality Products/Services 4.60 .47 .377 Managerial Skill 4.48 .79 .408 New Technology 3.90 1.16 .695 Customized Products/Services 3.76 1.30 .567 Innovative Products/Services 3.33 1.36 .853

Non-Factored Strategies '1' Not Very Important '5' Very Important Mean S.D.

Training Employees 4.14 1.45 Wide Variety Products/Services 3.59 1.38 Specializing 3.17 1.45 Low Cost Products/Services 3.08 1.22 Advice From Consultants 2.08 1.16

VariablesMean Square for ExtrinsicMotivation

Multivariate F-value

Mean Square for Intrinsic Motivation

Multivariate F-value

Mean Square for Family Motivation

Multivariate F - value

Risk Taking 3.08 3.87* 16.74 19.01** .074 .79             Gender 5.40 6.80** .400 .454 2.31 2.25             Risk Taking X Gender

.004 .005 .140 .158 .139 .135

             Adj R2 .012   .025   .001  

Table 4. Effects of Gender and Risk Taking on Motivations for Operating a Small Business. Wilks’ Lambda *p<.05, **p< .01 (df = 3, N = 970)

Research Results

Risk Taking Motivations Gender Mean F tLow (n=324)           External     2.98 1.55    Males 3.79        Females 3.60      Intrinsic     .029 -.424    Males 2.86        Females 2.91      Family     4.8 1.37    Males 3.12        Females 2.94    High (n= 646)            External     8.08 2.54*    Males 3.92        Females 3.71      Intrinsic     .325 1.59    Males 3.27        Females 3.14      Family     8.62 1.25    Males 3.14        Females 3.02    

Table 5. Examining Differences in Motivation by Gender and Risk Taking (N= 970 )

(t = variances not assumed, p > .05)