Bridging the urban-rural divide: Helping small businesses seek talent, financing

MARION — In 2016-17, Aaron Mulherin was a college student looking to start his own business.

He worked at a glass repair business while in high school and had a friend in the business looking to retire. It provided an opening and opportunity to get his foot in the door.

Many of the larger glass businesses in the metro area pursue commercial jobs, meaning there was plenty of residential business to pick up.

“The glass became a medium for me to get to the ultimate goal of starting a business,” Mulherin told The Gazette.

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He started working out of his parents’ garage.

In the past five years, his business, AM Glass Repair, has grown into doing commercial glass repairs, new storefronts and custom glass shower enclosures. Services include window repair and custom glass cutting. The business also provides mobile and 24-hour emergency services to customers.

Mulherin now runs his own shop at 2980 Fifth Ave. in Marion with five employees. And the business continues to grow.

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Getting there, though, was no easy task. As a small-business owner in a small town, Mulherin struggled to find people he could hire and access startup and working capital.

“You’re jumping off a cliff and hoping your parachute opens. It’s a lot of unknowns,” he said.

Mulherin turned to SCORE, which provides free mentors, tools and resources to help small business owners start their business, grow them and succeed.

Together, Mulherin and his SCORE mentor, John Brockardt of Cedar Rapids, worked through a business plan, financing and discussed cash flow, hiring and labor.

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Small businesses — including Mulherin’s — have rebounded from COVID-19.

“Even with COVID, we haven’t seen much of a drop-off,” Mulherin said. “We’re growing so rapidly that the growth is kind overpowering whatever setbacks there might be.”

His business saw a significant boost after the August 2020 derecho, which led to “a surge in calls for broken windows. It kind of became an all-out sprint for all of us and any glass shop,” Mulherin said.

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Rural entrepreneurs

Rural entrepreneurs, though, still struggle to access to capital, high-speed internet and quality workers, according to new survey data from SCORE, a nonprofit and resource partner of the U.S. Small Business Administration.

Rural businesses are hurting for workers and are 26 percent more likely to have trouble finding qualified employees, according to SCORE data. And twice as many rural entrepreneurs say there’s a lack of local banks in their area where they can seek financing.

Rising fuel costs, slowing customer spending, tight marketing budgets and a limited local customer base also present challenges.

Rural business owners also report higher expenses and fewer customers, and cash flow is constrained by rising costs for utilities, supplies, labor and capital.

The SCORE survey of more than 3,000 U.S. entrepreneurs found rural business owners are 9.3 percent more likely to have higher costs of doing business and about 24 percent more likely to have higher vendor costs than their urban counterparts.

While starting and growing a successful small business can be more difficult in rural America, it also can be more impactful, according to the SCORE report.

Rural communities are home to one in five Americans, according to census data. And businesses with fewer than 50 employees provide 42 percent of all jobs in rural America, according to the Brookings Institution.

“By creating jobs, stimulating innovation and nurturing productivity, small and locally owned businesses can help rural towns and geographies prosper in ways that improve the physical, social and economic well-being of the people who live in them,” according to the report.

SCORE mentors

Brockardt said it takes “extra effort and creativity to source people and get customers” when an entrepreneur works in a small town or rural area.

Brockardt, a retiree who has been a SCORE mentor for 10 years, works with clients in a wide variety of businesses, helping them with business and financial plans and in securing commercial loans.

During his career, Brockardt worked for companies in consumer goods (including food), hardgoods and sporting goods. He has experience related to finance, production supervision, sourcing, corporate planning, human resources, accounting and information technology.

With a background in engineering and business administration, Brockardt said he joined SCORE “to give back” and help entrepreneurs like Mulherin “change their lives and realize their dreams.”

Accessing capital

Mulherin, 26, said he was young when he started his business five years ago.

“Everybody wants to see years of past experience for getting capital,” he said. “When you’re a new business, you don’t have years behind you.”

He also had to find customers and negotiate to find suppliers willing to sell to a startup, all with pressure from competitors, Brockardt said.

“One of the problems of a growing business is a lot of businesses, when you sell something, you don’t get paid until 30 days later or 60 days later,” he said. “But you have to pay for it ahead of time so you’re stretched on cash.”

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Mulherin started on a tight budget.

“It was sort of one of those deals where if you have a job on Thursday and you’re going to need a hammer drill, you’re buying it Wednesday night and making sure you’re paid Thursday,” he said. “The money was not there to buy all of the tools at once. We did it as it was needed, and that’s how we’ve always grown — as frugally as possible.”

Labor

When supplying quotes for window repairs during the derecho, Mulherin’s phones were ringing back in the office. He would return from a job site to piles of voicemail and email messages.

Mulherin’s business focuses on a niche trade. And the people who know how to do it are well-established and not looking to move.

“Instead of looking for someone who knows what they’re doing, you’re looking for someone who has the potential to learn and to listen and grow,” Mulherin said.

He said he was fortunate to be able to hire a past co-worker with experience, and together have been able to grow the company more quickly as a team, hiring ambitious employees who are willing to learn.

“It just feels like a lot of baby steps that we just kept chipping away at,” Mulherin said.

‘Someone to lean on’

Having Brockardt as a sounding board has been invaluable to him and to his business, Mulherin added.

For his part, Brockardt said he’s been amazed by Mulherin’s personal and professional growth.

“The focus is not only on qualification but capability to learn,” Brockardt said.

Mulherin and Brockardt encourage small business owners to take advantage of the free resources and online tools and workshops provided by SCORE.

The resources include templates for building a business plan that focuses on financial projections and defining the business — a business model canvass — as well as live and recorded webinars on topics from human resources to cash flow.

“If I hadn’t worked with John from the beginning and had someone to lay out the steps and hold me accountable, I don’t know that I would have followed through with starting the businesses,” Mulherin said. “Having someone I knew I could lean on, if I needed it, made me feel a lot more comfortable.”

Comments: (319) 398-8499; tom.barton@thegazette.com