Brief Summary of Minutes of Annual Meeting

The primary data collected by the NC 1030 group is the National Family Business Survey (NFBS) 1997, 2000 and 2007 waves. The current project focuses on data collection and interpretation for the third wave of data. The third wave (2007) is unique in that it contains information on family business experience with natural disasters. Such data allow us to distinguish between business failures due to a natural disaster and those failures that are routine business failures. Only a small body of disaster research exists on individual responses that estimate disaster prevalence, nature of losses, and predictors of recovery. These studies have been conducted either in urban disaster locations or with small convenience samples. All samples have been cross sectional. Studying businesses at one point in time potentially has presented a distorted picture, since businesses may fail at a later date; economic cycles and increased indebtedness after the disaster can influence success and failure over the long-term (Tierney, 1997). The NFBS panel data can begin to provide some insight into the distinction in failure rates. Members of the technical committee also informed the development of the National Minority Business Owner (NMBO) Survey and work with data on the Tobacco Buy-out in Kentucky.

Short-term Outcomes

Firms located in counties receiving more disaster assistance are not more likely to survive, however these firms are more likely to realize positive changes in revenue than firms located in counties receiving less disaster assistance. Businesses located in an economically vulnerable rural county, those engaged in family to business resource intermingling and those transferring more business income to the household were more likely to survive. Larger businesses, those headed by women and those transferring more income from the business to the family were most likely to succeed.

Higher levels of federal disaster assistance were associated with lower family firm resilience for male-owned businesses and higher family firm resilience for female-owned businesses.

Results from disaster assistance work refutes previous findings that firms experiencing more disasters are less likely to survive. Results were mixed in supporting claims that disaster assistance helps individuals recover but not businesses, and that disaster assistance is negatively related to disaster recovery.

Disaster assistance had larger and more significant effects on female firms. Most importantly, this research found that disaster assistance had a positive impact on the success of women-owned small businesses, while having no impact on the success of men-owned small businesses.

An on-line resource tool, The Entrepreneurs Toolbox, has been developed to assist minority business owners. It is available at http://www.ctahr.hawaii.edu/oc/freepubs/pdf/ER-10.pdf

Outputs

National Family Business Survey Data

Research results and outreach pieces developed as a result of the projects research results were used in the natural disaster work done in Rushford, MN because of a natural disaster caused by the flooding of the Root River.

It is important for practitioners such as SBDC counselors to consider business conditions among participants before soliciting participation in support groups. Support groups may disproportionally advantage those who are meeting business challenges successfully and represent further constraints on time and personal energy for struggling business owners.

Small business consultants or professionals can better support female business owners by understanding which areas of business innovation their clients do and do not actively engage, and better support female owners in obtaining business innovation skills. Understanding how differential responses based on characteristics of the business owners will help policy makers, business consultants, and small business owners improve business performance.

Copreneurs, or couples who own and operate businesses together, are more likely to intermingle business and personal finances with varying results. While the use of the home equity increased business profits, using business cash for the family decreased the feeling of success.

Copreneurs who did not start as such but who later formed this type of business were less likely to intermingle resources. This may be related to the fact that these businesses were often financially stronger in terms of profit and revenues.

A preliminary analysis of longitudinal data indicates that innovation and strategic planning may be a distinguishing factor, as suggested by Carland, Hoy, Bolton and Carland, between entrepreneurs and small business owners.

National Minority Business Owner Survey Data

Programs targeting minority-owned family businesses can be developed for educational purposes in order to help them to be successful in business and in achieving business goals. When minority business owners placed family needs first over business needs, the level of business success decreased. Thus, providing family coping strategies for minority owners might help them to be more successful in business.

Business owner motivation should be studied beyond the start-up phase and well into the life of the family business. Business consultants who work with small business owners need to consider the influence of goal orientation on business performance and growth. Goal setting and goal orientation are an important part of business planning activities that in the long run set the stage for family business success.

Korean-American business owners reported significantly more business problems than their Mexican-American counterparts on items ranging from assessing customer needs to managing family/business conflict. Korean-Americans, as more recent immigrants than Mexican-Americans, face more challenges as business owners, relative to obtaining credit, navigating and complying with local and state laws and finding qualified workers. Therefore, Korean American family businesses in particular can benefit from support coming from a network outside their own family. Examples of community agencies in Hawaii include the Korean Chamber of Commerce and the Center for Korean Studies. Lending institutions can help by providing copies of regulations translated into Korean as well as offering business start-up workshops.

Kentucky Tobacco Buy-out Program

The increasing availability of the internet in rural areas changes the demographic profile of rural entrepreneurs. In particular, entrepreneurship becomes a more available employment option for married females, but is less available for low income populations.

Activities

Members of the NC 1030 technical committee are engaged in the following efforts related to this project:

A second National Science Foundation (NSF) grant has been awarded to two individuals on the NC 1030 project. Maria Marshall and Holly Schrank from Purdue University have been funded for the project Small Business Recovery and Demise After a Natural Disaster.

Data collection for Phase I of the USDA grant, Rural Community Resiliency: The Role of the Retail Sector in Easing the Effects of Slow Motion Shocks was completed in September, 2009.

Qualitative interviews were conducted with small family businesses in Iowa and Oklahoma on the business owners views of community social responsibility (CSR) for family firms.

Outreach projects were conducted in spring 2009 with rural retail and hospitality firms with funding received from the Main Street Iowa Program, Iowa Dept. of Economic Development. Six businesses from a small community impacted by recent floods in Iowa were provided with marketing and branding assistance, competitive strategic advice, and physical enhancements of the actual business.

A second round of funding was received for the Rural Renaissance Community Index (RRCI) Project that is focused on attracting and retaining residents in small rural communities.

In cooperation with the Northern Rangelands Trust, a Kenyan wildlife conservation group, a community-based pilot project is being conducted in Il Ngwesi, Kenya. The project is designed to help a Masai rural community of pastoralists better manage their range lands, earn more from the sales of their livestock, and find alternative enterprises to supplement their income. In addition to faculty efforts, graduate students are able to collect data for thesis projects.

Additionally, a member of the technical committee is serving on the Board of Directors of the Prairie Family Business Association, the second largest family business association in the nation.

Consulting projects, such as those noted above, provide valuable professional and service learning for students, develop entrepreneurship capabilities in students and rural communities, build networks between communities/universities/state organizations, and aid in building various forms of value and life quality enhancements for participants.

Milestones and Plans for the Upcoming Year

The project timeline indicates that by the end of the year in 2009, the technical committee will have completed data collection and prepared preliminary descriptive analysis. The project is ahead of schedule as data collection was completed prior to 2009 and the data set for the current (and third) wave of the National Family Business Survey has been merged with the two previous waves of data (1997 & 2000). Moreover, the NFBS data sets have been merged with the following data sets containing disaster-related information: PERI, SHELDUS and County Business Pattern data. Complete data sets have been distributed to technical committee members and several webinars developed by the primary investigators on the first NSF grant have been conducted to help technical committee members use the longitudinal family business and disaster-related data.

In terms of meeting the objectives for the project, outputs in the form of presentations and publications have been achieved for all four objectives (1a, 1b, 2a, and 2b), and are presented in the Publications section of this report. In 2010, as specified in our proposal, the committee is responsible for analyzing data and testing hypotheses and models. Presentations to stakeholders and scholars is also to take place. Early evidence of our ability to accomplish these tasks include scheduled publication of a 2010 special edition of the Journal of Family and Economic Issues for which two of our committee members are serving as guest editors, and the members of the committee have submitted papers for review. There are also papers accepted for presentation at the United States Association for Small Business and Entrepreneurship annual conference in January, as well as proposals submitted to other conferences. Members of the committee will continue to develop and submit manuscripts for review as hypothesis testing is completed.