Orange County now has two Small Business Development Center offices and both are vying to augment their current budgets with federal and state grants to be allocated this month.
There’s only so much money to go around, but Orange County has been deemed to be an area in need of more coverage.
The centers offer small businesses free counseling in areas such as management, operations and marketing.
“We should get more (funding) because we serve a larger audience,” said Hazel Belladora Laskey, director of the Orange County Small Business Development Center of Santa Ana.
“We have a wider business acumen,” Laskey said. Last year, 945 clients moved through its office. So far this year, 165 businesses have received business counseling from the Santa Ana center.
New Game in Town
But there’s a new small-business development kid in town who is all over the high-profile high-tech market: Irvine-based Venture Point Tech Coast SBDC.
Jay De Long, executive director of Venture Point, sees the two centers as targeting different clientele.
“We help those companies who are high-risk and high-growth,” De Long said.
He defines those as companies with the potential to achieve annual revenue of $15 million within five years.
De Long is negotiating to increase his funding from $375,000 to more than $500,000. The Santa Ana center wants to improve on its $523,000 government grant. Next year’s fiscal year budgets are also being reviewed.
Venture Point expects to assist 270 high-tech clients by the end of the year. So far, 35 businesses have been counseled. Venture Point replaced the UCI-based Accelerate Technology Small Business Development Center, which closed in 1998.
While the Santa Ana center assists the traditional entrepreneurial startup; whether it is a high-tech business or a restaurant, Venture Point exclusively targets the high-tech market. It is the only high-tech oriented development center in the state and one of two in the country.
Venture Point’s clients aren’t credit-worthy by traditional banking standards. Instead, its clients are encouraged to apply for angel funding through Venture Point’s network of investors, who serve as volunteer consultants. De Long describes the consultants as executives either in transition, interested in giving back or looking for investment deals. Venture Point employs eight full-time consultants and 50 pro bono consultants.
The Santa Ana development center, on the other hand, employs seven consultants, two of whom are full-time, and university interns. Its consultants are businesspeople without connections to the venture capital community, and the center is associated with SBA-lending banks. Its consultants are proficient in international trade as well as minority-owned businesses. Three of its consultants are bilingual, and the office can assist clients in Korean, Vietnamese and Spanish.
The Santa Ana center is housed, as many small business development centers are, at a college. In this case, Rancho Santiago Community College, which manages the center’s program. The center also receives funding from the state community college chancellor’s office.
Venture Point is housed at the Orange County Business Council, which sponsors Venture Point’s program.
Competing for Cash
Both centers are fluffing up their feathers in hopes of getting a share of funds administered by the California Trade and Commerce Agency. The Small Business Administration requires development centers to be measured on several criteria, including how many jobs are created, the number of companies counseled and the direct outcome of that assistance.
The SBA funds the centers nationally, based on population. Fiscal year 2000 funding for the state is $8.2 million. The state has to match at least 50% of the federal funding. The California Trade and Commerce Agency then divvies up the money among all the development offices in the state according to needs of the region. The centers have to match at least 20% of its government grant money with private funding.
Rolina Brown, assistant state director for the development-center program at the California Trade and Commerce Agency, said that more funding is needed in the OC area due to the large number of small businesses. South County is underserved, as well as the Asian, Vietnamese and Latino communities, she said. Over the next few weeks, Brown said the agency will figure out the best strategy to meet the needs of the county.
Minorities Targeted
Laskey said her office has the expertise to better serve minority-owned businesses, and could open a satellite office in Fullerton or Huntington Beach to reach more.
“They truly need our assistance,” she said. Laskey doesn’t see high-tech startups in desperate need for state and federal funds. The next IPO-bound high-tech widget maker already has investors banging down his or her door, she said.
But, Laskey adds, she wouldn’t turn down a tech client. Her office has the business expertise to assist a high-tech startup and has counseled many tech companies, she said.
In the future, Venture Point may have a larger role, Brown said. With its high-tech focus, the center has the potential to serve the entire state. She doesn’t see other centers turning into Venture Point-type operations. Instead, Brown suggests all the centers will become more adept at both using technology and offering high-tech advice to businesses. n
