Success needs a partner

Jun 11, 2007 2:00 AM

By Kindra Gordon

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A common problem across small communities is that small businesses are disappearing or failing to thrive. What do successful small businesses do that is different?

The answer may be as simple as joining the chamber of commerce or being a member of an industry organization, according to Diane Vigna, an associate professor and Extension specialist with the University of Nebraska-Lincoln.

Vigna uses the quote: “The biggest problem facing small businesses is not being small, it is being lonely.” Thus, she says business networks can create rural economic vitality.

Vigna, whose extension work focuses on business networks, retail and apparel, entrepreneurship and technology, has recently completed a four-year study with researchers from Iowa State University, Ohio State University and the University of Minnesota Rural Policy Center that looked at how business associations impact the success of an organization.

For the study, small communities were defined as having a population of less than 10,000 people with the majority of the community agriculture based and not adjacent to metro area. Small businesses were defined as those having less than 20 employees and less than $5 million in annual revenue.

Vigna defines networks as groups of businesses joined in voluntary formal organizations that have by-laws and officers, hold regular meetings, and have the general purpose of achieving business success. Examples could include local business chambers, regional tourism associations or industry organizations such as breed and beef cattle groups.

From the survey that was conducted among small businesses in small communities in Nebraska, Iowa, Minnesota and Ohio, Vigna concluded that the commonality among successful businesses is that they were members of some type of business organization or “network.”

Vigna says the benefits cited by businesses that belonged to a network included being connected to others with a shared vision, as well as the opportunity for resource sharing.

Essentially Vigna says, “It’s comforting for businesses to have a network to rely on for information. It’s the social capital theory that social connections between people, ultimately generates a competitive advantage.”

The take home message: no matter if you’re a Main Street business or a seedstock producer in the community, Vigna says there is value in being a member of some type of organization that will help provide new ideas and information for your business.

Advice for Associations

On the other side of the coin, Vigna also collected information from her survey of different businesses regarding what they value from the networks or organizations they are members of.

Topping the list was receiving a regular newsletter that conveyed current information about the organization and the related business industry. “Members value frequent communication. It is a means for them to feel connected,” Vigna says.

She reports that annual meetings and workshops through the year were also appreciated by members as an opportunity for information sharing and a means to help the business members be more successful.

Attracting and retaining prestigious members into the group is also an important element for successful networks. Vigna says the ability to regularly attract and keep members adds up to the opportunity to generate more new ideas. All total, it helps members with their business and thus, small businesses stay viable.

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