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Business helpers learn hard business lessons

September 24, 2011
Editorial by the Adirondack Daily Enterprise: Publisher Catherine Moore, Managing Editor Peter Crowley

It has become clear that Clarkson University, though its Reh Center for Entrepreneurism, set up shop in Saranac Lake a year ago with the best of intentions but without much of a business plan - something that goes against the smart business principles they try to teach local business people.

The private university signed a three-year lease for a good location on River Street, sunk $80,000 into renovating it ($25,000 of that from a National Grid grant), filled it with high-tech equipment, hired several staff members and opened the Adirondack Business Center with a loose mission - to help local businesses, using its classes and facilities. Fees for these services were intentionally affordable, but too low to pay the bills, so the plan was to make up the difference by renting the space to telecommuters. That flopped because telecommuters, by their nature, work from home. Clarkson hadn't investigated its market potential very well on this one.

Therefore the center recently laid off its last remaining staff member and suspended regular hours until it can find volunteers and/or partners to keep it open.

This is a classic example of why we're skeptical of the many business helper groups that exist around here. In this case, though, any temptation to criticize should be countered by a couple of key facts: No public funds were used in this venture, and the motives were benevolent. Therefore, we're more forgiving of Clarkson than of public entities like New York's Empire State Development and county industrial development agencies, or nonprofit groups that rely on government grants. These groups seem to give taxpayers little return on investment yet continue on indefinitely - seemingly just to keep their staffs employed.

Now Clarkson officials know a little more about what it's like to run a small business around here. Most start-ups fail, but the harsh risk of failure motivates entrepreneurs to plan and work better.

Like many aid groups, the university took a top-down instead of bottom-up approach. Its people first decided to help business people, got money and staff for the job, and only then, after they were already committed, tried to figure out the "how" part. They didn't know what they were doing, the way an entrepreneur has to before he or she can even apply for a start-up loan.

An example of a bottom-up approach is a chamber of commerce or a merchants' association, in which businesses organize themselves into a guild or union and pool their resources to do things for the good of them all. True, such groups are not always effective, but their effectiveness reflects the business community's degree of unity.

Clarkson's business center also stumbled into a trap that many business helper groups do - competing with businesses they're supposed to serve. Just as chambers of commerce compete with publishers when they create visitor guides, nonprofit groups' classes sometimes duplicate efforts by colleges and private instructors. Clarkson's computer classes undersold those offered by Judi's Computer Support & Learning Center.

Nevertheless, Clarkson's business center has done some good, albeit less than it hoped, and don't forget its tangible investment in dressing up a business property in the middle of the village. Anyone else want to use private funds to improve an upstate New York town's economic climate? Fix up old commercial real estate that weighs down others' efforts to raise the bar.

We hope others who want to help businesses take to heart the lessons Clarkson has learned the hard way. Entrepreneurism is critical and is a wonderfully American way to get us out of this time of high unemployment. Someone who has lost a job has less to lose by starting that businesses they've daydreamed about for years, if they can get the capital, but the risk is high. Many of those enterprises need help, but targeted help.

We wish Clarkson well and hope it reinvents its Adirondack Business Center in a way that is sustainable and focused on specific tasks - ones that local entrepreneurs tell them they need and which they cannot do on their own.

 
 

 

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