AGENDA ITEM BACKGROUND
TO: GOVERNING BOARD
DATE
April 11, 2011
FROM: PRESIDENT
SUBJECT:
SBDC Annual Report - 2010
REASON FOR BOARD CONSIDERATION
INFORMATION
ENCLOSURE(S)
ITEM NUMBER
Page 1 of 6
E.8
Background:
One of the most important ways in which Cabrillo fulfills the California Community
College mission of economic development is through the hosting of the Central Coast
Small Business Development Center. The SBDC contracts with seventeen independent
business advisors to provide free-of-charge, confidential business counseling in Santa
Cruz County and portions of Monterey County. The SBDC also presents low-cost
seminars in many areas of business management.
As the host of the Central Coast SBDC, the College provides a facility to house the
program, provides technical support, and acts as the fiscal agent with the grantors. In
turn, the College receives an indirect rate to offset the overhead of grant administration.
Highlights of the SBDC’s activities in 2010
The Chancellor’s Office granted the SBDC an additional $35,000 grant through March
of 2011, and a $20,000 augmentation in October, for the Youth Entrepreneurship
Training Program. The initial phase involved sixteen entrepreneurship classes for high
school students in the Pajaro Valley Unified School District, taught at the Cabrillo
College Campus in Watsonville, resulting in projects such as a Farmer’s Market booth
and developing business plans. The 2nd project scheduled 4 presentations from local
business owners for ROP students at Pajaro Valley High School to connect business
mentors with students to review their business plans.
The SBDC was successful in securing the highly competitive grant for the new
Business Entrepreneurship Center from the Chancellor’s Office of the California
Community Colleges in 2010. The mission of the BEC is to foster entrepreneurship
programs and collaborative economic development initiatives for sixteen bay area
community colleges.
Granted one-time ARRA funds, the SBDC provided employee retention services to
Santa Cruz and Monterey County businesses, under sponsorship of the Santa Cruz and
Monterey County Workforce Investment Boards. A total of 100 businesses received
technical assistance and resource referrals, and 426 jobs were retained.
Administrator Initiating Item:
Rock Pfotenhauer
Renée M. Kilmer, VP Instruction
Academic and Professional Matter
If yes, Faculty Senate Agreement
Senate President Signature
 Yes  No
 Yes  No
Final Disposition


Under a special contract with the Monterey County Redevelopment Agency, four
customized seminars were provided to 57 business owners in the community of
Pajaro. Follow up individualized advising will be continued in 2011.
Three training and assistance programs were developed with funding from the
City of Watsonville Redevelopment Agency for retail, restaurant, and Spanishspeaking business owners.
Accessing Capital
In 2010, SBDC clients received over $8.1 million in loans and equity injection for
business start-up and expansion, among the highest in the Northern California region.
The majority of loans received are guaranteed by various government agencies. The
Director serves on the loan committee for Cal Coastal Rural Development Corporation
and regularly meets with the SBA lenders in the region to facilitate funding of SBDC
clients.
Program Funding
New funding was secured from the Redevelopment Agencies of Santa Cruz, Monterey
County and Watsonville. Continued funding was secured from SBA, the Chancellor’s
Office of the California Community Colleges, and the private sector. These funds meet
the college’s obligation to provide a cash match to the state and federal contracts. Wells
Fargo Bank has renewed their sponsorship of the business management seminar series
presented every Wednesday at the Watsonville Library.
Other Activity / Community Partnerships
 The SBDC continued to partner with the Monterey Peninsula Chamber of
Commerce and developed and presented the Business Builders Program, a
series of 10 customized seminars for entrepreneurs in Monterey County.
 The Farm Service Agency and the SBDC collaborated to present the Financing for
Small Farms Seminar to over 60 local small business farmers.
 The SBDC co-sponsored another successful Freelance Camp in October, 2010.
 The SBDC developed Quickbooks, Marketing, and Business Plan Seminars for
Child Care Providers for a Community Ventures Grant for local child care
business owners, and includes technical assistance from SBDC Advisors.
 The SBDC presented the Technology Bootcamp: Moving Your Business Online
to over 100 local business owners at the Cabrillo Horticulture Center in June, 2010.
This was followed by a similar conference held in Monterey in August.
 SBDC supported the Extreme Entrepreneurship Tour for Youth Entrepreneurs in
Santa Cruz in October, 2010. Over 100 local youth attended the event which was
co-sponsored and funded by the local Workforce Investment Boards.
 The Director presented SBDC services to the Project for Innovation and
Entrepreneurship at UCSC to foster engagement with young entrepreneurs.
 The SBDC continued to develop and present in 2010 ten free-of-charge Brown Bag
Lunch seminars called Business 2.010. The collaboration between the City of
Santa Cruz, the Downtown Association, the Santa Cruz Chamber of Commerce
and the Friends of the Santa Cruz Library presented over 200 business owners with
social networking, accessing capital, technology tools, bookkeeping and tax tips
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and green business practices. The series was sponsored by Bay Federal Credit
Union.
 The Director of SBDC, Teresa Thomae, has served on the Board of Directors for El
Pajaro Community Development Corporation (CDC) since 1992. The CDC is
dedicated to serving very low-income, minority entrepreneurs in the greater Pajaro
Valley and is a partner to the SBDC on many projects.
The Central Coast SBDC was represented on the following committees in 2010
 Santa Cruz Chamber of Commerce, Board of Directors
 El Pajaro Community Development Corporation, Board of Directors
 Cal Coastal Rural Development Corporation’s Loan Committee
 Loan Approval Board for the Santa Cruz County Human Services Agency Childcare
Developers Loan Fund
 Your Future is Our Business
 Employer Advisory Council (EAC) for Santa Cruz County
 Advisory Board, Marina Technology Center
 Statewide Advisory Board, Building Childcare Consortium
Other Activities;
 The SBDC is featured in weekly “Business Tips” on KSCO Radio.
 Outreach activities included appearances on Community TV and local radio,
speeches to Leadership Santa Cruz and Monterey, local service clubs, Chambers
of Commerce and Business Associations.
 SBDC Client Service reports were presented to the Santa Cruz County Board of
Supervisors, and the City Councils of Santa Cruz and Watsonville.
 An additional Financing Business Advisor was obtained in 2010.
 The SBDC presented four seminars on the use of Technology and Social Media
Marketing.
 The SBDC held planning meetings with the Green Careers Partnership to develop
an entrepreneurial track in their work plans.
2010 Sample Success Stories
The Penny Ice Creamery is the only artisan ice cream shop in Northern California
licensed to make small batches of ice cream completely from scratch in house, featuring
locally farmed and organic ingredients. Chef Kendra Baker was the executive pastry
chef at the two-Michelin-star Manresa Restaurant in Los Gatos before focusing on
opening her own business with her business partner Zachary Davis. They came to the
Central Coast SBDC late in 2009 to request assistance in obtaining financing and
business planning for a food establishment in the downtown area. Keith Holtaway,
SBDC Business Plan Advisor, assisted with the development of their business plan and
reviewed various potential locations. Unfortunately, bank lending was all but halted in
2009 due to the nationwide recession, and the entrepreneurs were not sure whether or
not they were going to be able to start their business. However, the 2009 American
Recovery and Reinvestment Act (ARRA) provided Ms. Baker and Mr. Davis hope for
their loan application to be considered by the bank with the incentives ARRA provided.
By the summer of 2010, the SBA loan was approved by Lighthouse Bank which enabled
them to buy and improve the building, and complete a remodel following LEED best
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practices. Ms. Baker and Mr. Davis were able to employ 20 local businesses to
complete the remodel, hired 10 employees, and they held their very successful grand
opening for The Penny Ice Creamery on August 24th on a 100+ degree day.
The business opening went “viral” due to a thank you video for ARRA assistance. Mr.
Davis, also an accomplished videographer, mentioned to a friend that the bank loan
central to the creation of the shop was made possible by the ARRA, and that he was
considering writing a letter to the responsible elected officials thanking them for their
efforts. They decided a YouTube video would be a great way to communicate their
appreciation. It was completed in late October, and 3 days later the White House had it
on its Twitter feed as well as being mentioned in the Huffington Post. Congressman
Sam Farr stopped by the shop, and the opening was covered by many local and
regional media outlets. By November 11th, Vice President Joe Biden called to thank the
owners. Both videos are accessible on their website. The White House called again in
January 2011, this time to invite the entrepreneurs to represent business owners across
the nation and sit in Michelle Obama’s box during the State of the Union address. Ms.
Baker and Mr. Davis were featured in The Sentinel again January 25th, and local TV
stations interviewed them when they arrived home from Washington, DC.
Client Statement: "It was great to be able to work with Keith Holtaway from the SBDC
while Zach and I were writing our business plan. Not only did he give us support and
encouragement during the planning process, he also offered first-hand knowledge and
insight into operating a food service business in Santa Cruz. And above all he
connected us with Bob Dennis of Lighthouse Bank which ultimately resulted in our
project getting funded. Thanks Keith!”
Ana Brantley of Aptos had been searching for an opportunity to start her own business,
and decided to purchase Tranquille Spa in Aptos, whose owner wanted to sell the
business. The owner liked the idea of staying on as a stylist along with continuing the
other stylists’ jobs, so they entered into negotiations. Ms. Brantley heard about the
Central Coast SBDC “Retain Your Employees” program and applied for assistance from
Certified SBDC Advisor Danny Braga, who helped her review the financial reports and
develop a business plan and revenue projections in order to apply for an SBA loan at
the Santa Cruz Community Credit Union. The application was accepted for the
business acquisition, and Ms. Brantley completed the purchase of the business in June
2010, retaining the eight jobs at the salon. Ms. Brantley’s success story was featured in
a Santa Cruz Sentinel article on June 23rd, highlighting the Workforce Investment
Board-funded retention program and the SBDC services that retained the business and
all the employee jobs.
Client Statement: “The SBDC and Danny Braga were instrumental in purchasing the
business. Thank you for all the support and help, I could not have gotten this far without
your guidance.”
Robert Mylls had been teaching his family and friends about bike fundamentals since
2009, and saw a need in the community to provide training classes and personalized
guidance for bike riders of all skill levels. He visualized a cycling gym and membership
community offering classes and secure bicycle parking for commuters to downtown
Santa Cruz. Mr. Mylls called the SBDC in the spring of 2010 and met with Keith
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Holtaway, SBDC Business Plan Advisor, to develop his business plan, find a location,
and obtain financing for the new business, Bike Dojo.
Mr. Mylls faced challenges with funding requirements at the Santa Cruz local banks,
and three banks were approached and could not fund his start-up. The location also
was difficult to find because it needed to be affordable, provide bike parking and class
space, and be located in the downtown area. Mr. Holtaway reviewed multiple location
lease options with Mr. Mylls, as well as suggesting the Monterey County Bank for his
SBA-guaranteed loan as a final funding option. Mr. Holtaway assisted Mr. Mylls in
developing the plan for the business concept over several sessions, and reviewed
multiple options for the business location. He also provided feedback in the negotiations
to complete the final lease contract. The SBA loan application was completed and
accepted by Monterey County Bank, and it was approved in December. Two full-time
jobs were created, and ten part-time instructors were hired for the grand opening in
2011.
Client Statement: "As Kim and I sat in the Bike Dojo after the grand opening party
celebrating the evening and being thankful for everyone that helped us get the business
going, we came up with a list of 10 people who without them, Bike Dojo would not exist.
Keith Holtaway of the SBDC was at the top of that list."
A Watsonville strawberry farm owner and his two brothers had been facing continued
economic challenges with their farm, so the owner contacted the SBDC and was
referred to Certified Agricultural Advisor Nestor Marin for assistance to increase their
sales and profits and review options with their outstanding lender obligations.
Mr. Marin reviewed their strawberry farming business operations and concluded that the
owners needed to expand their marketing and increase the product quality. After
conducting several cost analyses to provide suggestions to reduce costs, Mr. Marin
discussed with the owner the new product varieties available, and processes to
increase product quality.
For the final advising sessions, the owner and Mr. Marin focused on the loan application
and cash flow projections for the additional farming operations for the new varieties.
They also reviewed the outstanding debt obligations. The SBDC advising resulted in a
new business product focus and a restructured term loan and crop loan. The most
gratifying outcome was the fifteen full and part-time employees who were able to
continue in their jobs.
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Central Coast SBDC Client Service Statistics 2008 -2010
2008
2009
SBA 2010
Goal
2010
Business Counseling:
Total Clients
399
424
381
350
2,686
2,853
2,302
2,450
56
57
69
122
92
92
Wholesale
12
9
9
Manufacturing
54
60
69
Construction
16
24
23
Male
156
140
144
Female
171
203
165
60
64
52
African American
6
4
7
Native American
5
5
1
Hispanic Latino/a
75
71
99
Counseling Hours
%
Change
2009 to
2010
*
-19%*
-10%
Types of Business:
Retail
Service
21%
0%
0%
15%
-4%
Business Ownership by
Gender:
M/F Partnership
3%
-19%
-19%
Business Ownership by
Ethnicity:
75%
-80%
39%
0%
-18%
12%
Asian
10
18
18
White
266
293
239
No-response
107
104
116
Jobs Created
47
212
247
115
Jobs Retained
161
287
457
120
$9,353,549
$6,901,400
$8,121,772
$4,500,000
18%***
113
70
82
60
17%
1,581
1,429
1,856
1000
30%
Funding of SBDC Clients
Events, Workshops,
Seminars
Attendees of above
events
17% **
59%**
* Reduction in Client Services is attributed to the budget reductions due to the Chancellor’s
Office elimination of the SBDC program as of July 1, 2010 and the decreased demand of
services for start up businesses due to economic conditions.
** Increase in jobs created and retained is attributed to services delivered to local employers for
Layoff Aversion funded by the Santa Cruz and Monterey County Workforce Investment Boards.
*** Although lending to small business nationally dropped almost 30% from 2009 to 2010, the
SBDC was able to assist in a large amount of agricultural loans and loan guarantees which are
generally much larger than the typical operating capital or start up loan received by SBDC
clients.
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