Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, November 5, 1995 TAG: 9511060008
SECTION: CURRENT PAGE: NRV-3 EDITION: NEW RIVER VALLEY
SOURCE: ELISSA MILENKY STAFF WRITER
DATELINE: BLACKSBURG LENGTH: Medium
Today, the plant's work force has shrunk to about 1,200 people, an example of the effects of defense downsizing in a post-Cold War era. The numbers do not even reflect the other businesses and subcontractors in the New River Valley that have laid off people as a result of a shrinking defense industry.
What is the answer to the trend? People laid off from the defense industry who want greater independence should start their own businesses, said Michael Hensley, director of the Economic Development Assistance Center at Virginia Tech.
Thanks to a $52,000 grant from the U.S. Small Business Administration, budding entrepreneurs who lost out to downsizing in the New River and Roanoke valleys will get help to achieve that goal.
"... People think the best way to be in charge of your own economic future is with your own business," said Hensley, whose department also runs the Virginia Small Business Development Center at Virginia Tech. The development center is part of a network of offices throughout the state.
One hundred people who want to start their own businesses and can directly attribute their job losses - or impending layoffs - to defense downsizing may sign up with the center for a business course and follow-up support paid for by the grant money.
The course, which is already offered twice a year for a fee, is based on a book entitled "The Virginia Entrepreneur's Guide." Hensley wrote the book along with Virginia Tech faculty member Michael J. Tentnowski, and a professor at the University of Montana.
The 10-week course will include practical guidelines to develop marketing and business plans, details on how marketing research, patents, trademarks and copyright work, information about Virginia's economy and a state business resource database.
By the end of the course, students should have a solid business plan ready if they still want to go through with the venture. Counseling and mentoring from local business owners follow the class.
"Many people don't have confidence in their business skills," Hensley said. "This course just gives them an opportunity to see what it's really like."
The New River Valley was one of only three areas in Virginia to receive part of the $242,5000 grant to help people laid off by defense downsizing. The bulk of the money, $133,460, went to Hampton Roads. The center in Manassas received $54,180.
There are no solid figures on the number of people working for subcontractors who lost their jobs as a result of defense downsizing.
But 16 local companies reported two years ago that they had laid off workers because of defense cuts. The New River Valley Planning District Commission conducted the 1993 survey of 166 local industries.
Those layoffs can also affect sales and employment at local department stores, restaurants and grocers.
Hensley's theory is that income levels often drop when people who are laid off from the defense industry take other jobs, which ultimately means they will spend less on clothes and groceries. They are not doing the things that employ other people.
New businesses can mean better paying jobs, which equal more disposable income for these families and the whole valley. Hensley said offering the course and subsequent support to potential entrepreneurs will help this process.
"I feel very confident that this cycle can be accomplished in the New River Valley," he said.
The Small Business Development Center, which is tucked away in the Donaldson Brown Conference Center, will begin taking applications for the free course on Dec. 1. The U.S. Small Business Administration funding is from a one-time grant.
A five-person screening committee, which will include local business people, a small business development center representative and an official from the state's Department of Economic Development, will whittle down the applicants.
People will be chosen based on whether they have a solid business plan in mind, which could be anything from computer services to flower shops. Once picked, people will be divided into small classes that will be held throughout the year.
"This is not a come-one, come-all process," Hensley said. "Our objective is to be selective enough that the people we select to benefit from this grant will open businesses and create jobs."
The Virginia Small Business Development Center in the Donaldson Brown Hotel and Conference Center will begin taking applications for the course Dec. 1. Applicants must prove they have been laid off, or are in danger of losing a job, as a direct or indirect result of defense downsizing. For more information, call 231-4004.
by CNB