No name

1
Entrepreneurial Support Organizations
Monograph 11
March, 2002
Deborah Markley w Co-Directors w Don Macke
  Abstract. Our field research is increasingly
clear communities in Rural America with
energized entrepreneurs typically have successful
entrepreneurial support organizations (ESOs) hard
at work building strong E environments. This
monograph provides an overview of ESOs. Over
time, we hope to add short case studies on
specific rural ESOs. The Entrepreneurial Support
Organizations Monograph is part of a three
monograph series that also includes Public
Entrepreneurship and Social Capital. Background
Introduction Too little has been researched and
written about the origins of strong
entrepreneurial environments. The United States,
with its passion for free enterprise, has long
been a poster child for a strong entrepreneurial
environment. The Global Entrepreneurship Monitor
Project studied 21 countries and explored
questions about entrepreneurship, business
creation and the entrepreneurial environment
Global Entrepreneurship Monitor Report for
2000. This study found one in 10 adult
Americans engage in entrepreneurial endeavors.
The U.S. ranked the strongest for entrepreneurism
behind only Brazil (among the study group). The
question remains, why is America entrepreneurial?
More importantly, why do certain communities in
America exhibit high rates of entrepreneurship,
while other communities do not? A central
research question we have been exploring relates
to the role of entrepreneurial support
organizations or ESOs in creating environments
that stimulate and support higher rates of
successful entrepreneurship. We theorize that
communities with successful ESOs contribute to
stronger entrepreneurial environments and higher
rates of successful entrepreneurship. Based on
our field research, we have found that a key to
success for ESOs is the remarkable public
entrepreneurs providing critical leadership
within these ESOs. Our emerging conclusion is
that public entrepreneurs working with ESOs are
creating stronger entrepreneurial environments
and higher rates of successful entrepreneurial
activity. This emerging conclusion strongly
suggests a key focus for economic development
should be supporting the development of ESOs
across the rural landscape.

•  ESOs?
• There is no widely recognized definition for
  ESOs. While the literature and field practice is
  full of stories about ESOs, their unique and
  powerful role in building strong entrepreneurial
  environments (that in turn stimulate higher rates
  of entrepreneurship) is not well acknowledged or
  documented.
•  
• We are evolving an operational definition for
  ESOs based on their attributes as players in the
  community landscape. Here are the attributes we
  have identified and documented thus far
• They focus on entrepreneurs first and the
  associated businesses second.
• They build entrepreneurial support systems
  systems that nurture entrepreneurs as they
  develop business ideas, create viable enterprises
  and grow sustainable businesses within the local
  economy.
• They help build over time entrepreneurial
  environments environments where
  entrepreneurship flourishes with the support of
  both the public and private sectors.
• They tend to be strategic, comprehensive and
  customized in meeting the needs of entrepreneurs
  within their service areas.
•  

Figure 1 - Attributes of ESOs
?
?
Focus on Es
Help Es Meet Their Needs
Provide Customized Assistance
Strategically Focused
Build E Support Systems
Build Entrepreneurial Environments
Comprehensive in Their Approach
2
Entrepreneurial Support Organizations
(For more information on rural capital access we
recommend RUPRIs Rural Equity Capital
Initiative reports Studies at
http//www.rupri.org/pubs/archive/reports/P2001-11
/index.html.)   Market Access. One critical
difference between a business person and an
entrepreneur is the entrepreneurs orientation
toward markets. Entrepreneurs become very good
at perceiving market opportunities, evaluating
opportunity feasibility and acting to capture
market share. ESOs generally engage in helping
entrepreneurs gain awareness of and experience
with a wider range of market environments. For
example, a core service provided by GROW Nebraska
(an artisans marketing association) is helping
artisans get ready to compete in regional and
national trade shows whether in Dallas or New
York. GROW helps promising artisans move from
localized markets to regional and national
markets.   Technical Assistance. Another role
that ESOs play is providing access to technical
assistance. The form of this technical
assistance includes traditional business
counseling, mentoring access, networking
opportunities, capacity building experiences and
entrepreneurial training (as offered by REAL,
FastTrac, NextLevel and others). High performing
ESOs tend to reach beyond business skill building
to support personal and soft skill building
activities as well. For example, these ESOs may
offer counseling that helps entrepreneurs
maintain a reasonable balance between family and
their drive to create their venture.   Enterprise
Facilitation. Finally, most ESOs engage in some
form of enterprise facilitation. The concept of
enterprise facilitation was developed by Ernesto
Sirolli over the past 20 years. But we have
found that many ESOs practice enterprise
facilitation in varying degrees independent of
the Sirolli program. Enterprise facilitation is
a highly sophisticated and customized approach to
helping entrepreneurs pursue their passion in
creating ventures. Enterprise facilitation goes
beyond point in time training and skill building
programs to a longer-term partnership with
entrepreneurs and their enterprises. (For more
information on enterprise facilitation contact
the Sirolli Institute at www.sirolli.com.)    

ESO Practice Research on entrepreneurs strongly
suggests the keys to ultimate success are
motivation (the drive to create enterprises) and
capacity (the ability to actually create and grow
a venture). The ESOs we have studied appear to
be particularly good at addressing both of these
elements when working with entrepreneurs and
their ventures. The kinds of activities that
ESOs across Rural America engage in vary widely
from one ESO to the next. But the following
activities seem to form the practice of high
performing ESOs.   Entrepreneurial Environment.
Although the general business climate in many
rural places may be weak and community attitudes
toward entrepreneurship even hostile, successful
ESOs work to build supportive entrepreneurial
environments. These ESOs focus on identifying,
engaging and supporting local entrepreneurs who
in turn work to create successful enterprises.
Over time these ESOs help enhance the larger
community business climate and build community
support for entrepreneurs. (For more
information, refer to our monograph titled
Community Environment for Entrepreneurship.)
  Networking Infrastructure. Networking and
mentoring are often cited by entrepreneurs as the
most important support an entrepreneur can
receive. ESOs, most often organically and
sometimes strategically, build and support
networking infrastructure. Often these ESOs
proactively recruit entrepreneurs into these
networks and facilitate their operation. Through
these networks, entrepreneurs gain access to
knowledge and role models that are critical to
their future success. (For more on the
importance and nature of business networks we
recommend Building Entrepreneurial Networks
(December 2001) by the National Commission on
Entrepreneurship. This report and other
entrepreneurship reports can be obtained at
www.ncoe.org.)   Capital Access. Another
attribute of high performing ESOs is their role
in helping entrepreneurs access capital necessary
to start and grow enterprises. Organizations
like Coastal Enterprises Incorporated (CEI) in
New England illustrate this capital accessing
role. CEI runs programs from entry level micro
lending to highly sophisticated equity and
venture financing. Not only does CEI operate
many of these financing programs internally, CEI
is also linked with private banking and equity
providers enhancing entrepreneurs access to
adequate and appropriate financing.
3
Entrepreneurial Support Organizations
Entrepreneurs within ESOs Case study research on
private entrepreneurs by the Kauffman Center for
Entrepreneurial Leadership Daring Visionaries
How Entrepreneurs Build Companies, Inspire
Allegiance, and Create Wealth strongly supports
the view that at the heart of entrepreneurial
businesses, there are successful entrepreneurs.
We believe the same is true with ESOs. At the
core of successful ESOs, there are public
entrepreneurs. This view is strongly supported
by recent research on non-profits Enterprising
Non-Profits A Toolkit for Social Entrepreneurs.
These individuals have many of the same drives
and attributes as private entrepreneurs with one
very important difference. They, like private
entrepreneurs, are driven to create, but their
creation has a public mission. The following are
some public entrepreneurs laboring to encourage
entrepreneurship in Rural America. Janell
Anderson Ehrke of Nebraska. Janell has all of
the drive and savvy of a successful business
woman, but her passion is not building her own
business or family riches. She is driven to help
Nebraskas artisans realize their dreams through
successful ventures. Janell is not an artist or
particularly motivated by art. She is a builder
and has built GROW Nebraska into a very effective
ESO for Nebraskas artisan community Ron
Phillips of Maine. Over 25 years ago, Coastal
Enterprises Inc. did not exist. Today CEI is one
of Americas most successful non-profit regional
development organizations. With total
capitalization of over 120 million and a large
and growing staff, CEI is having impact and
impact at scale. Ron Phillips is central to the
creation of CEI. His vision and passion are
reflected in the values and mission of CEI.
These same entrepreneurial qualities are
reflected in CEIs leadership and staff. Mike
Wisdom of Colorado. Mike Wisdom has labored in
rural development for most of his life. His
vision and talent can be found in earlier work on
the high plains of Eastern Colorado. Today Mike
heads a regional development organization in the
San Juan Mountain region of Southern Colorado.
Driven by values of social justice and the power
of human creation, Mike stimulates a development
agenda among the people in the landscapes where
he works. Pam Curry of West Virginia. Pam Curry
works with a non-profit organization called
Options in Appalachian West Virginia. Options
operates a retail store in Charleston providing
an outlet for artisan works from across the
region. Pam lives the values of personal
economic empowerment. She has learned the art of
business and proven highly creative in building
partnerships, raising capital, and helping
individuals turn their talent into profit.
Greg Clary of Texas. Greg Clary is an extension
educator with Texas AM University. He is part
of a large and structured institution. But to
many, Greg is Mr. Rural Entrepreneurship in
Texas. He is passionate and motivated about his
work. He is driven to build an entrepreneurial
economy and environment across Texas. Gregs
strategy is coalition building through which the
leadership, resources and capacity to make a
difference can be realized. Sharon Gulick of
Missouri. Sharon Gulick is part of State
Government in Missouri. She runs the Small
Business Program within Missouris development
agency. She is bright, motivated and innovative.
She understands bureaucracy and has learned to
effectively work within its constraints. Sharon
and her partners are driven to create a highly
effective entrepreneurial support environment in
Missouri. Marcie McLaughlin of Minnesota. In
one part of Marcies life, she teams with her
husband to grow a small entrepreneurial business
in Rural Minnesota. The rest of her time, Marcie
is head of Minnesota Rural Partners, the state
rural development council in Minnesota. Marcie
is a remarkable public entrepreneur. She
understands networking, collaboration and
leverage. She is at the heart of numerous rural
initiatives in Minnesota including efforts to
build a virtual entrepreneurial network within
the state. Conclusion A great deal of research
and learning is still required before we can
fully understand and appreciate the role of
entrepreneurial support organizations. Measuring
the impacts of these ESOs, both quantitatively
and qualitatively, is the next step toward a
better understanding of their role in
entrepreneurship development. Emerging evidence
from our field experience strongly suggests that
ESOs are critically important to stimulating
entrepreneurship, building supportive
entrepreneurial environments and helping
entrepreneurs succeed in rural areas. If you
have information or ideas about ESOs in your
corner of America, please get in touch and share
your story (contact Don Macke at
don_at_ruraleship.org).
4
Other Monographs in this Series
1 About the Center Resource Guide 2 Entreprene
urs Entrepreneurship 3 Why Entrepreneurship? 4
Wealth as the Development Goal 5 Understanding
Rural America 6 Community Environment for
Entrepreneurs 7 State Environment for
Entrepreneurs
8 National Environment for Entrepreneurs 9 Capit
al 10 Public Entrepreneurship 11 Entrepreneurial
Support Organizations 12 Social Capital
13 Youth Entrepreneurs 14 Research Learning
Focus Under Development
Founding Partners
Resources
The Kauffman Center for Entrepreneurial
Leadership was created in 1990 within the Ewing
Marion Kauffman Foundation of Kansas City. The
Foundation is a private foundation created by
Ewing Marion Kauffman (founder of Marion
Laboratories) that strives to achieve the vision
of self-sufficient people in healthy communities.
The Center focuses on entrepreneurs and
entrepreneurship, supporting research, learning,
and education activities. Additional information
on the Kauffman Foundation can be found at
www.emkf.org. The Rural Policy Research
Institute (RUPRI) is the only national policy
institute in the U.S. focusing solely upon the
rural implications of public policy. This
comprehensive approach to rural policy analysis
involves scientists from universities, research
institutions, governments, and non-governmental
organizations. To date, more than 200 scientists
representing 16 different disciplines in 80
universities, 40 states, and three countries have
participated in RUPRI projects. Additional
information on RUPRI can be found at
www.rupri.org. Author. This monograph was
prepared by Don Macke. Don can be reached at
don_at_ruraleship.org or 402-323-7339.

• Ripples from the Zambezi Passion,
  Entrepreneurship and the Rebirth of Local
  Economies by Ernesto Sirolli with the Sirolli
  Institute. New Society Publishers at
  www.newsociety.com. ISBN 0-86571-397-9.
  1999.
• Clues to Rural Community Survival by Vicki Luther
  and Milan Wall with the Heartland Center for
  Leadership Development. ISBN 0-9666699-08.
  1987 1998.
• Enterprising Non-Profits A Toolkit for Social
  Entrepreneurs by Gregory Dees, Jed Emerson and
  Peter Economy. John Wiley and Sons, Inc. ISBN
  0-471-39735-0. 2001.
• Global Entrepreneurship Monitor Report for 2000
  by Babson College, Ernest Young, the Kauffman
  Center for Entrepreneurial Leadership and the
  London Business School. Available through
  www.entreworld.org. 2001.
• Daring Visionaries How Entrepreneurs Build
  Companies, Inspire Allegiance, and Create Wealth
  by Ray Smilor and the Kauffman Center for
  Entrepreneurial Leadership. Adams Media
  Corporation. ISBN 1-58062-476-6. 2001.
• Building Entrepreneurial Networks by the National
  Commission on Entrepreneurship at www.ncoe.org.
  2001.
• The Center for Rural Entrepreneurship is
  identifying, tracking and developing case studies
  on a number of rural based ESOs. For more
  information on this work check out the Centers
  web site at www.ruraleship.org ? New Postings/ESO
  Case Studies.

About the Center
The Center for Rural Entrepreneurship is new. It
is an outgrowth of the Rural Entrepreneurship
Initiative. The Center is a RUPRI National
Research and Policy Center with founding support
from the Kauffman Center for Entrepreneurial
Leadership within the Ewing Marion Kauffman
Foundation of Kansas City, Missouri. Our mission
is to enable every rural resident to achieve his
or her full entrepreneurial potential. This
mission will be achieved by collaborating with
individuals and organizations engaged in the
study, practice and policy of rural
entrepreneurship. The Center supports research,
field work, and policy development through
collaborations with national, state, and local
interests. For more information on the Center
for Rural Entrepreneurship, check out our web
site at www.ruraleship.org or call Taina
Radenslaben at 402-323-7336.