Area group hopes to help start, boost small business, industry

The six-county East Central Rural Business Development Program, at the Ottawa Area Chamber of Commerce, has been named a funding partner with NetWork Kansas.

NetWork Kansas, created by state law to serve as a resource center for small businesses, has been working to start up the Rural Angel Investor Network promoted by the state and made up of investors and entrepreneurs.

NetWork Kansas will work with the East Central group as it helps start or boost small businesses and industries in a six-county area, Tom Weigand, who helps administer the East Central program, said.

The area group is designed to provide funds, resources and advice to new businesses in Franklin, Miami, Douglas, Johnson, Wyandotte and Leavenworth counties, he said.

In Franklin County, the East Central group helped garner funding for the Serenity Tea Room, 101 S. Main St.

“That has been very successful,” Weigand said. “We’ve been very pleased.”

In many cases, the group helps those promising ventures that may not fit traditional business loan formulas, he said.

“A lot of the loan requests we’ve had are too small for a bank loan,” he said. “Those that are under $50,000.”

Although the loan amounts are smaller, the ventures are still subject to the same scrutiny, including examining business plans and checking references, he said.

“We want to see if there’s a logical chance it would be successful,” Weigand said.

Although the group originally targeted small industries, it has worked most often with small businesses and retailers, he said.

The East Central Rural Business Development Program has been raising funds through the sale of state tax credits, he said.

The program hopes to raise $350,000 from the sale of the state tax credits, he said.

The deadline for selling all of the tax credits is July 1, he said.

Network Kansas has been working with a variety of economic development agencies to build the “angel investment” group. Officials recently staged a meeting at Hays to explain the concept.

Angel investors are people willing to provide money for start-up businesses. Unlike partners, the angel investors usually aren’t involved in management but can enhance a business through their contacts and expertise. The concept is a national one, which spread across the United States in the 1990s.

“The networking and contacts are invaluable,” Jan Srack, president and chief executive officer of Matrix Electronic Measuring, Inc., which markets a photographic electronic measuring system for the automotive collision repair industry, said.

She and her husband, Bob, have found business-based networking valuable to their start-up venture.

“It really helps you feel like you’re not out here working in a vacuum,” Jan Srack said, “that you have other network people that support you and that you can seek advice from.”

Srack’s business, north of Salina in Bennington, recently was named a Pipeline Innovator, a designation of the state-owned Kansas Technology Enterprise Corp. for notable new technology companies in the state,

The Kansas Rural Angel Initiative is part of new statewide efforts to promote equity investments in a business’ early stages, serving to connect entrepreneurs and investors.

The Midwest Venture Alliance, a statewide network of accredited investors, has committed to investing in high-growth seed companies and young technology companies in Kansas and nearby states.

Members of the initiative include entrepreneurs, business owners and executives experienced in funding and growing new businesses.

Angel investments help spur local economic growth and jobs in a community. They also can create a more sustainable business environment, with less talent drain from a region, Steve Radley, director of NetWork Kansas, said.

A main focus are technology companies, which tend to pay above-average wages, he said.