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Summit focus: Growing small businesses

Dave Ivan, the central region director at Michigan State University Extension, talks to a group of business owners and managers about community-based entrepreneurship at Thursday's Detroit Lakes Regional Chamber of Commerce's economic development summit. (Brian Basham/Tribune)

Cities and local business groups can do much to help small businesses in their area grow.

And it doesn't take much at first, said Dave Ivan, community and economic development specialist with the Michigan State University Extension. Ivan's remarks came during the Detroit Lakes Regional Chamber of Commerce Economic Development Summit at Minnesota State Community and Technical College-Detroit Lakes.

One item Ivan hit on that M-State-DL is trying is incubators. Incubators are centers that entrepreneurs can access for a variety of services. It serves as a one-stop place to help small business owners launch their plans.

But Ivan said that incubators aren't the only piece of the puzzle.

"It's only part of the economic picture," he said. "I've been to a number of communities where they put all of their eggs in an incubator basket, so to speak. They feel like they failed if the incubator doesn't work."

Incubators aren't dependent on location, Ivan said. He added that many cities see any empty storefront downtown and think that's a perfect location for one.

"Don't let real estate drive the project," he said.

Going hand-in-hand with real estate issues is community planning. Ivan said he is on a planning commission back in Michigan and knows that.

Another key entrepreneurship success is that banks need to be knowledgeable about financial resources that are available. Those resources could include a variety of state and federal loans and grants.

"It doesn't do you any good if you know about them and don't pull the trigger," Ivan said.

The basic tasks cities and businesses can do is to be a networking source for loans. From that, state and regional resources can be brought in. Cities that are in an advanced stage can ensure access to financial tools.

Besides access to capital, businesses need basic services. That can range from accounting, office supplies, attorneys and printing services.

Ivan said that business services aren't just limited to the city limits in Detroit Lakes. For some services, such as patent attorneys, Fargo is a source for business services.

"Regions are the economic engine," Ivan said.

Risk taking is another trait that is needed for success. Ivan said that those whose businesses fail need support and owners not be stigmatized with a scarlet letter. He said great rewards come from risk.

High performing communities, Ivan said, are those who assess strengths and weaknesses. Cities need to find out what gaps there are.

Those gaps could mean educating adults on business skills or re-training for new positions. Youth should be included, as well, in those education programs.

Ivan gave an example of a coffee shop that a church youth group set up. The church subsidized the operations for about a year and then the youth took off with it.

"What a wonderful opportunity it was for those young adults to get learning experience," Ivan said.

Local success stories

Besides Ivan's speech, two local business owners told their own success stories.

Keith LeCleir, a co-owner of Sunrise Machine and Tool and SMT Health Systems.

From a simple tool and die shop that was started by Keith's father, Richard, in 1972, it has grown into a medical supply business with SMT Health Systems.

"Most people haven't heard of us," LeCleir said.

He said the growth of the business came throughout the years. One of those spikes in growth came in 1987 when SJE Rhombus -- then SJ Electro -- made a deal with Sunrise Machine and Tool to stamp and paint alarm boxes.

The medical supply part came in 1988 when Richard was approached to design a lift. Lifts at that time were cumbersome and operated with a hand crank. Richard built the first battery-operated lift in the United States.

A sit-to-stand lift was introduced in 1991.

LeCleir said that his business operated on lean principles and tries to fill its manufacturing capacity.

He also gets his clients involved in the product development process. That way, he's finding ways to help his customers instead of just selling a product.

Bob Borash, owner of RMB Environmental Laboratories, talked about the growth of his business from a one-person operation.

Borash graduated from Bemidji State in 1992 with a degree in environmental sciences and found that there weren't many opportunities to work in the field in the region.

After starting as a dishwasher in a lab, Borash moved on to direct one section, but wanted to strike out on his own. With an $18,000 loan, he started RMB to do on-site petroleum environmental testing.

But he was approached by several different entities to do water testing.

Hiring another person for $6.50 an hour with no benefits, Borash grew the business. He said he didn't take a salary for two years, relying on his wife's income, so that the loan could be paid off in quicker fashion.

RMB Environmental Laboratories has 12 to 13 employees on average and just added two more last month. Borash expects to add another two employees within the next month.

He said that he hasn't had to layoff any workers for economic reasons since he started the company.

The key for the success is that everyone supports one another. That means family comes first to him. He said that a worker who needs to take a few hours off to take a child to a doctor's appointment is able to do so.

"Everyone in the company supports that and we step up," Borash said.

The company has about $1.2 million in annual revenue and will experience 30 percent increase in annual growth for three years running.

"If you have that dream, believe in that dream," Borash said. "Don't take no for an answer."