Economic Development Center Specializes in Funds, Training, Advice
John J. Rooney is president of Valley Economic Development Center Inc. in Van Nuys. Founded in 1978, the organization provides consulting, training and financing to small businesses. Last year, it won a Commerce Department award as the best economic-development lending program in the Western United States.
Q: What services do you offer?
A: We are a full-service, small-business development center, so we offer every type of service a small-business owner would need to grow a business. That includes professional management consulting, business financing, chief executive and employee training and other specialized services.
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Q: How does your organization differ from other management consulting services?
A: We’re a nonprofit, focusing strictly on small businesses with fewer than 500 employees. We are a one-stop center, offering everything from help [with] securing permits to financing to strategic planning retreats for CEOs.
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Q: How many companies have you helped over the years?
A: In 1994--the year of the Northridge earthquake, our major challenge--we helped about 10,000 companies. Since then, we’ve [worked with] about 7,000 companies a year on average. I think we’re the largest provider of small-business assistance in California.
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Q: Give an example of a success story.
A: We had a client--Pegnato & Pegnato Roof Management in Marina del Rey--that came to us about four years ago. It was a new company with five employees. Bill and Maryella Pegnato, the husband-and-wife team, went through our entrepreneurial training program, a 10-week, business strategy boot camp. We helped them analyze their market segments, and we showed them how to do focus groups. They found out that their large retail customers hated roofers because they always tried to sell them a new roof. [These customers wanted] a service that was on their side and would help prevent them from getting ripped off. The light went on. [The Pegnato firm does no re-roofing, just repairs to get as much life out of the existing roof as possible.] Over the next three years, the company expanded nationwide.
The next step was that they needed regular guidance on how to grow the company. Bill became part of our Breakthrough program [made up of] 12 CEOs who meet once a month. He would run problems by this “board of directors.” Breakthrough, which costs a nominal monthly fee, is a new concept in consulting: group consulting, with a dozen companies splitting the bill. On average, companies in the Breakthrough program boost profits by about 40%. The Pegnatos’ company now has 100 employees, half in California and half in other major metropolitan areas. Last October it made Inc. magazine’s list of the 500 fastest-growing companies.
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Q: What market area do you cover?
A: Mostly Los Angeles and Ventura counties. We have 11 offices ranging from Huntington Park to Santa Barbara. Our biggest offices are the Gold Coast Small Business Development Center in Ventura, the Valley Business Assistance Center at the main Van Nuys office, the Pacoima Business Assistance Center and the Huntington Park Business Assistance Center. We have field offices in other communities, including Palmdale, Burbank, downtown Los Angeles and San Fernando.
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Q: Who subsidizes the center?
A: We have different funding sources, including the city of Los Angeles and other communities, the state of California, the U.S. Department of Commerce and the U.S. Small Business Administration, plus some private contracts with corporations to do special work.
The largest funding source is the Commerce Department, which provides $6 million for lending (through the Los Angeles Business Development Corp., our lending arm). We’ve just been awarded by the U.S. Small Business Administration the contract for micro-lending for L.A. and Ventura counties. We acquired the loan portfolio for Coalition for Women’s Economic Development and are managing that at the SBA’s request. Also through the SBA, we’re designated as the intermediary for a pre-qualification program for minority and female business owners.
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Q: What must a company be or do to qualify for a loan?
A: We have multiple loan programs with different qualifications. Generally, we will lend to what we call “near-bankable” businesses. They might need help getting their package together or be a bit too young or not profitable for long enough. They should have some collateral. They should show an ability through historical earnings to repay the loan and should have reasonably good credit. Some programs, such as the new micro-lending and minority and women “pre-qual,” will lend to start-ups.
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Q: What is the Hollywood Economic Alliance?
A: After the earthquake, we created the Economic Alliance of the San Fernando Valley. It has raised $4 million in private money and is instituting 16 initiatives to improve business retention and schools, etc. Mayor [Richard] Riordan liked that, and about a year ago he asked whether we would do the same in Hollywood. We hooked up the entertainment and tourism industries and got them to come up with 12 projects to improve Hollywood. For example, where the post-production places are, between Highland Avenue and Vine Street and along Santa Monica Boulevard, they’ve banded together, raised money and set up security patrols and business incubators. There is a major tourism effort, including Hooray From Hollywood and a visitor center; a keeping-the-streets-safe program; and an effort to recruit new companies and persuade existing ones to expand by helping with parking and other headaches. There is also Smart Hollywood, a program to install fiber optics throughout Hollywood so that independent companies can “plug in.”
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Q: What has the ongoing economic recovery in the Southland meant to your clients?
A: Business is up pretty much across the board. Now they’re hiring and expanding, acquiring other companies, seeking financing, buying equipment. They are using our financing services and want to make sure that they plan things correctly, so they use our planning services a lot. We’ve seen people thinking more aggressively. Before we were seeing more activity, but it was people who feared they were going out of business. Now is the time to start a business and live your dream.
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Help Is on the Way
The Valley Economic Development Center Inc. is a full-service small business development center, offering management consulting, business financing, chief executive and employee training and other specialized services.
* Call: (818) 907-9977
* Fax: (818) 907-9720
* Write: 4717 Van Nuys Blvd., 2nd floor
Van Nuys, CA 91403
