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signs of growth DESPITE PANDEMIC, ENTREPRENEURSHIP IS ON THE UPSWING IN THE VALLEY, OBSERVERS SAY words by
tom giffey
CONSIDERING RECORD-HIGH AND THEN RECORD-LOW UNEMPLOYMENT, talk of the “Great Resignation,” and stock market volatility, it’s tempting to borrow that clichéd line from Charles Dickens when describing the economic climate over the past couple of years – the one about “the best of times, the worst of times.” The long-lasting impact of the long-lasting pandemic means we’ve all been bouncing around on a rollercoaster. When it comes to interest in entrepreneurship, however, the trend has been pointed upward, at least here in the Chippewa Valley. While taking the pulse of the startup climate depends heavily on anecdotal evidence, those in the know locally say there is a rising tide of people interested in starting their own businesses as 2022 begins. “I can tell you that our volume of activity is stronger than ever,” says Luke Kempen, director of the Small Business Development Center at UW-Eau Claire. In 2021, Kempen’s office served 418 clients, a 48% increase from the number of clients in 2020. Perhaps more notably, client businesses received $15.5 million in investment and loan funding during the just-concluded year, nearly double the figure ($8.2 million) received by clients in 2020. “It’s way more than in the past,” Kempen says of the trend in the region. “We’ve experienced growth every year, but that’s as tremendous jump.” Kempen says that part of this growth in capital infusion reflects that the SBDC office is helping more second-stage clients: those who are expanding their small businesses by buying facilities or equipment or adding staff. The SBDC office (4330 Golf Terrace, Suite 111), offers free counseling and business education to entrepreneurs in Barron, Chippewa, Clark, Dunn,
Eau Claire, Pepin, Rusk, and Taylor counties. This can include technical assistance preparing financial projections and business plans, as well as help with marketing. Kempen attributes the growing interest in startup businesses to the pandemic – but not in ways that might be immediately apparent. First, when the federal government fired up programs to help existing small businesses at the onset of the pandemic, it used SBDC offices nationwide as some of its “boots on the ground,” Kempen says. This resulted in raising the profile of these offices and attracting more new clients to them. In addition, federal pandemic relief via the federal CARES Act, approved in March 2020, brought new funding to the SBDC, which allowed it to expand the number of staff and interns it has, and therefore serve more clients, Kempen says. Despite media attention to the “Great Resignation,” those who are starting new businesses locally aren’t necessarily either quitting their jobs to do so or starting them out of necessity because they’re out of work. In fact, Kempen says, the relatively low unemployment rate could actually be holding down the number of people pursuing startups. “My gut would be telling me right now that the
“I CA N T EL L YO U T H AT O UR V O L UM E O F AC T I V I T Y IS ST R O N GE R T H AN E V E R .” – LUKE KEMPEN, SMALL BUSINESS DEVELOPMENT CENTER
labor market is so strong that, if I want to get a job I can get a job,” Kempen says. “That is probably hindering people from jumping from employment to business ownership.” Other local small-business observers also see signs pointing upward. Becca Coleman, project manager for the Eau Claire Area Economic Development Corp., said the number of people involved in Startup Chippewa Valley Week, which is held annually in the fall, doubled from about 300 to 600 between 2020 and 2021. Among new businesses Coleman has seen forming locally are several related to pandemic trends, such as outdoor wedding venues, food trucks, and all-terrain vehicle businesses. In addition, the Eau Claire Area EDC has been fielding a growing number of inquiries about the expansion and relocation of existing businesses, she said. The challenge for all of these businesses, either new or expanding, is finding the necessary workforce, Coleman said. Aaron White, economic development manager for the City of Eau Claire, also has seen a growing number of people interested in starting businesses locally, from those launching startups after losing their jobs to people approaching retirement age turning their hobbies into side businesses. One of the biggest challenges facing local entrepreneurs is finding appropriate space, White said. Some entrepreneurs are aspiring micro-retailers who only need 600 to 700 square feet, which is smaller than most rental properties can provide. On the other end of the spectrum, there are growing businesses needing 40,000 to 60,000 square feet in commercial or industrial space, which is also hard to come by locally, White said.
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what’s your plan? WISCONSIN GOVERNOR’S BUSINESS PLAN CONTEST IS LOOKING FOR SOME GOOD IDEAS words by
v1 staff
DO YOU HAVE A GREAT IDEA FOR AN APP? Or perhaps a new piece of technology or a new process that will change not only the Badger State but the world? Then the Wisconsin Governor’s Business Plan Contest is for you. The contest, now in its 19th year, is accepting entries online through Monday, Jan. 31. Finalists that emerge from the multistep competition, which concludes in June, will be eligible for thousands of dollars’ worth of cash and service prizes. “The contest is designed to encourage entrepreneurs in the startup stage of tech-based businesses in Wisconsin,” the contest’s website states. “It links up-and-coming entrepreneurs with a statewide network of community resources,
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expert advice and mentoring, management talent, and possible sources of capital.” Winners in the 2021 contest shared in more than $125,000 in prizes, while since 2004 prizes have reached a total value of $2.5 million (including legal, accounting, and marketing services and office space). What may be ever more valuable, however, is public and media exposure received by winning startups. Categories in the contest include Advanced Manufacturing, Business Services, Information Technology, and Life Sciences. The contest is open to Wisconsin residents 18 and older, teams from Wisconsin-based businesses or organizations, as well as businesses and teams from outside the
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state who “demonstrate intent to base or expand their businesses in Wisconsin.” Companies or individuals must not have received angel investment for their business plans in their current form. Phase 1 of the contest is open until 5pm Sunday, Jan. 31. According to the contest website,“Entries should be roughly 250 words (or no more than 2,000 characters, including spaces) and will be graded by the pool of BPC judges. The top 50 idea abstracts will advance to Phase 2.”
The second and third phases winnow the field further, and require contestants to supply greater details about their startups. Finally, the top 12 entries, the so-called “Diligent Dozens,” will make live presentations at the Wisconsin Entrepreneurs’ Conference in June. Major sponsors of the contest include the Wisconsin Economic Development Corp. Learn more about the contest and how you can enter at govsbizplancontest.com.
a good place to start CVTC OFFERS ENTREPRENEURSHIP PROGRAM, COURSE PATHS TO HELP PEOPLE START THEIR OWN BUSINESSES words by
SABRINA SPIEGEL GRADUATED FROM HIGH SCHOOL YEARS AGO AND ADMITS SHE DIDN’T HAVE IT ALL FIGURED OUT. Now she’s the owner of Saylon Seven – a popular salon in Eau Claire. Anthony Nied and his brother started a lawn mowing business in the early 1990s. His current ownership of Safe & Simple Organic Lawns is a nod to his earlier roots. Lillie Speros was home-schooled through high school. Now she owns a coffee house called Plaza Perk in Eau Claire. Spiegel, Nied, and Speros have at least one thing in common – they realized their dream of starting their own business after attending Chippewa Valley Technical College. Although entrepreneurship in the U.S. has been declining for decades, according to the National Bureau of Economic Research, CVTC continues to make it easy for people to learn the tools to start their own business and help it thrive. The college’s entrepreneurship technical diploma is designed to help community members learn more about entrepreneurship and move an idea to the point of a business launch. Lisa Arendt, CVTC’s associate dean of business, arts, and science, said it’s essential to have entrepreneurs among us. “They support the Chippewa Valley’s creative economy. We need more entrepreneurs to continue to build on the great contributions made so far,” she said. Tyler Van Helden, entrepreneurship program director and instructor, interacts with area business owners and agencies that support entrepreneurship throughout the region. “Entrepreneurs are our local visionaries,” he said. “They listen to others and themselves. They find ways to make our lives better, and they often build products or offer services we all use.” Spiegel, a local cosmetologist, exemplifies that description. The owner of Saylon Seven said she worked as a daycare provider after high school, but it wasn’t something she wanted to do for the rest of her life. She attended CVTC and received her associate’s degree in cosmetology. It ignited a fire in her. “I had these leadership skills I didn’t know I had,” she said. “It’s just better to own your own business.
alyssa van duyse / chippewa valley technical college
SABRINA SPIEGEL OF SAYLON SEVEN
LILLIE SPEROS OF PLAZA PERK
“I wanted to give the Eau Claire community something unique and different that they normally don’t see. I had all of these ideas.” It was important for Spiegel to create an atmosphere at her salon where all people felt welcome. She said CVTC gave her the tools to make her business a success. “I could not have felt the empowerment, strength, and skill level to do what I do without CVTC,” Spiegel said. Nied and Speros echo those sentiments.
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Nied earned his degree in horticulture from CVTC and started his landscape business in 2018. “There is always going to be some nerves and some anxiety with starting a new business, but it was a welcome change,” he said. “You just have to have persistence. You go back to your values, your roots, and make decisions from the heart. “Without CVTC, I wouldn’t be where I am today. It propelled me right into the industry.” Speros said starting her coffee shop was a dream finally realized. She also comes by it honestly. Her father had been a business owner his whole life, so she got to see the behind-thescenes and inner workings of his business. Speros has a nail technician technical diploma from CVTC, but she also took classes in business, marketing, and management. “Getting a new business out there so people know about it is really hard to do,” she said. “This is representing me. All of this is my business. It’s a lot of weight to think about. This is how you’re known to people now. It’s rough, but it’s worth it. “If your dreams don’t scare you, they’re not big enough.”
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Wisconsin rankings a mixed bag NATIONAL DATA ON BUSINESS STARTUPS OFFERS UPS AND DOWNS FOR BADGER STATE words by
IS WISCONSIN A GOOD STATE TO START A BUSINESS? That’s potentially a multimillion-dollar question for entrepreneurs looking to put down roots. While the Badger State has traditionally landed near the bottom of rankings for entrepreneurship – as recently as five years ago, Wisconsin was dead last among the 50 states in startup activity – things are looking up a little more. Depending on what indexes you look at or how you measure entrepreneurial activity, Wisconsin is at least a middle-of-the-road place to hang up your proverbial shingle. Here are some relevant rankings put into context.
tom giffey
First the bad (or at least less sunny) news: Wisconsin ranked 47th among the 50 states and D.C. in its Rate of New Entrepreneurs, according to the latest report by the Kauffman Foundation, a Kansas City-based nonprofit that focuses on advancing entrepreneurship. Simply put, this is a measure of the percentage of a state’s population that starts a new business in a given month. As of 2020, Wisconsin’s rate was 0.22%. For comparison, Florida topped the list at 0.53%, while the U.S. average was 0.38%. (If it’s any consolation, Wisconsin squeaked past Minnesota and its 0.18% rate.)
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One of the statistics tracked by the Kauffman Foundation comes with a hefty name: the Rate of New Employer Business Actualization, defined as the “percent of all new businesses that make a first payroll within eight quarters of business application.” Essentially, it’s a measure of how quickly a business goes from existing only on paper to actually paying employees. The national rate in 2020 was 9.41% — in other words, for every 100 new businesses that start in the U.S., within two years about nine of them were expected to pay their first payroll. Wisconsin’s rate was calculated at 9.75% – just above the national average. Among all 50 states and the District of Columbia, Wisconsin landed at No. 26 – exactly in the middle. Compared with its neighbors, Wisconsin topped Michigan (7.13%) and Illinois (9.1%) and fell behind Iowa (11.4%) and Minnesota (11.35%).
The Badger State fares even better compared with its peers when it comes to business survival. According to the Kauffman Foundation, Wisconsin ranked 19th out of 51 for Startup Survival Rate in 2020. This metric “measures the percentage of new employer establishments that are still active after one year of operation.” Wisconsin’s Startup Survival Rate is 78.9%, besting neighbors Illinois (78.8%) and Michigan (71.8%) and trailing Minnesota (80.1%) and Iowa (79.8%).
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The Kauffman Foundation combines these and other statistics into one mega ranking, the Kauffman Early-Stage Entrepreneurship Index. And, unfortunately, Wisconsin didn’t perform too well by this metric. As the Kauffman report indicates, the index is meant to present “a snapshot of early-stage entrepreneurial activity,” and I this case it isn’t a very flattering snapshot: Wisconsin is 42nd among the state and D.C. Fortunately, the report’s authors add the caveat that one very high or low indicator can throw the index off. “As such,” they conclude, “for more specific insights, we recommend that users focus primarily on each individual indicator and less on the overall composite score.” In that case, how about that Startup Survival Rate, huh?
To learn more about the Kauffman Foundation and its Indicators of Entrepreneurship, visit indicators.kauffman.org.
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6 locally focused business boosters THE RIGHT PEOPLE AND PROGRAMS TO HELP YOUR START-UP SUCCEED IN THE VALLEY compiled by
tom giffey
ARE YOU THINKING ABOUT TAKING THE LEAP INTO ENTREPRENEURSHIP? Have you already started your own business but could you still use a hand, a sympathetic ear, or some inspiration? The Chippewa Valley offers a rich environment to create and expand your own business. Numerous programs can help you incubate your entrepreneurial idea. Here are a few of them. 1 MILLION CUPS At 9am each Wednesday at Chippewa Valley Technical College (or virtually via Facebook Live),
entrepreneurs meet over free coffee to network and listen to presentations from other business innovators about their latest and greatest ideas. Learn more at 1millioncups.com/ eauclaire. IDEA CHALLENGE Local entrepreneurs submit their business ideas, get free guidance from business professionals, and compete for a chance at a $5,000 grand prize to help their ideas succeed through this program, offered by the Eau Claire Area Economic Development Corp. and sponsored
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by Northwestern Bank. Learn more at eauclaire-wi.com/entrepreneurs/ idea-challenge. STARTUP 48 Participants pitch startup ideas, form teams, and scramble to create a plan for a minimum viable product – all in the space of just two days. One participant called the competition, held in Eau Claire each fall, “the most fun you can legally have in 48 hours!” Learn more at startup48.co. CHIPPEWA VALLEY INNOVATION CENTER This facility on Eau Claire’s north side provides a temporary home for start-up businesses as well as access to local economic development agencies for managerial, technical, and financial assistance. Learn more at eauclaire-wi.com/ entrepreneurs/chippewa-valley -innovation-center. SMALL BUSINESS DEVELOPMENT CENTER The Small Business Development Center aids entrepreneurs at every stage of business development with financial, marketing, and management techniques and strategies – all at no cost! The center offers the Entrepreneurial Training Program, a series of classes that help you learn what it takes to start and sustain a small business. Learn more at wisconsinsbdc. org/eauclaire.
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C.V. INNOVATION CENTER
CITY OF EAU CLAIRE ECONOMIC DEVELOPMENT DIVISION This city entity’s mission is to help grow local businesses, facilitate expansions, and incentivize businesses to locate in Eau Claire. They have resources available to assist in marketing and branding strategies, paperwork, permits and regulations, finding properties to rent or own, and finding financial assistance through grants, loans, and credit programs. Learn more at www. eauclairewi.gov/government/ourdivisions/economic-development.
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