137
AGENDA ITEM BACKGROUND
TO: GOVERNING BOARD
FROM: PRESIDENT
DATE
April 2, 2012
SUBJECT:
SBDC Annual Report - 2011
REASON FOR BOARD CONSIDERATION
INFORMATION
ITEM NUMBER
D.3
ENCLOSURE(S)
Page 1 of 6
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 nineteen 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.
The SBDC also oversees the regional Business and Entrepreneurship Center (BEC) and the regional Youth Entrepreneurship Program (YEP), serving the 17 Community Colleges of the greater Bay Area. The mission of the BEC is to foster entrepreneurship programs and collaborative economic development initiatives for the region. YEP is focused on increasing entrepreneurship within CTE programs and providing entrepreneurial training and large events to youth ages 14-28.
Highlights of the SBDC’s activities in 2011
In addition to the client service statistics, the SBDC engaged in some special programs:

Through funds provided by the Workforce Investment Board, the SBDC provided employee retention services to Santa Cruz County businesses, 56 employers received
Layoff Prevention services, resulting in 30 jobs retained due to resulting cost savings.

Under a special contract with the Monterey County Redevelopment Agency, four customized seminars were provided to 63 business owners in the communities of Pajaro and Castroville. The SBDC utilized a team of student interns from CSUMB and a new bilingual business advisor to develop an intensive technical assistance program for
Castroville and Pajaro merchants . The work of the team included a needs assessment that revealed the merchants needed basic recordkeeping and pricing strategies.
Bookkeeping tools and customized trainings resulted in a better understanding of cash flow, tax obligations and point of sale systems.
Administrator Initiating Item:
Rock Pfotenhauer, Dean CEED
Wanda Garner, Kathleen Welch
Interim VPs Instruction
Academic and Professional Matter  Yes  No Final Disposition
If yes, Faculty Senate Agreement  Yes  No
Senate President Signature

138

Developed a business assistance program for victims of the March flooding in Capitola and the yacht harbor businesses affected by the tsunami.

Assisted in the development and facilitation of three diverse countywide Economic
Development Summits in Santa Cruz and Monterey Counties that were attended by many elected officials, business leaders and public sector representatives.

In November, 2011, the SBDC Director was invited to Washington D.C. to be a guest on
Congressman Sam Farr’s monthly video taping of Central Coast issues. The show has had widespread showing on community television and the web.

As part of the funding from the City of Santa Cruz Redevelopment Agency, the SBDC provided assistance on the selection of businesses to occupy the Pacific Avenue kiosks.
This included assisting all applicants with business plans, financial projections and feasibility studies.

An SBDC Advisor assisted in the review of various financial and operation models for the Cabrillo College Bookstore. His work included using a team of graduate students to look at industry trends for college bookstores, explore possible cost savings including expansion of food sales and print on demand services.
Accessing Capital
In 2011, SBDC clients received over $10.13 million in loans ($5.1M) and equity injection ($5M) for business start-up and expansion, 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
Continued 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.
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 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 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 2011 ten free-of-charge Brown Bag Lunch seminars.. The collaboration between the City of Santa Cruz, the Downtown Association,
2

139 and the Friends of the Santa Cruz Library presented over 200 business owners with social networking, accessing capital, technology tools, bookkeeping and tax tips and green business practices. The series was sponsored by Bank of America.

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 2011

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.
Business and Entrepreneurship Center / Youth Entrepreneurship Highlights:

Presented the Extreme Entrepreneurship Tour to 755 participants, including both high school and college students at the following schools at SF City, Cabot, Evergreen and
Alameda Community Colleges:

Piloted a financial literacy program for Spanish-speaking farm owners in San Benito,
Santa Cruz, and Monterey Counties:

Presented a QuickBooks training course to 25 small farm owners at the California Small
Farms Conference in San Jose.

Partnered with the SF SBDC, San Mateo Area Chamber of Commerce, and the San
Mateo Public Library to present a series of business training courses reaching over 30 local business owners.

Presented at the Annual California Workforce Association Conference to over 30 community college and high school faculty and administrators.

Sponsored and played an active role on the in the Monterey Bay Regional Business Plan competition, reaching over 30 student participants.

Presented at the California Community College Association of Occupational Education
Conference on how to integrate entrepreneurship training into existing Career and
Technical Education (CTE) programs to over 40 college administrators and faculty.
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140
2011 Sample Success Stories
Nut Kreations
- Mina Feuerhaken is part of the fourth-generation in her family to farm pistachios in the Central Valley. Her business idea of starting a retail nut bar grew out of an experiment she tried with her boyfriend Brody for Christmas 2009. They took orders for pistachios from family and friends and put together 200 packages out of their home. Immediately after getting engaged and confirming wedding plans, a preferred location came up for lease in downtown Santa Cruz. Mina and Brody had no retail food experience, so they contacted the Central Coast SBDC and began working with SBDC
Business Plan Advisor Keith Holtaway in late 2010 to discuss their plans and learn to run their new business.
Holtaway reviewed their draft business plan, startup costs, and potential lease terms.
The location was analyzed in detail and the lease reviewed to complete the Letter of
Intent and discuss tenant improvements. The clients were advised on all lease negotiations, permits, equipment, operations, insurance, marketing and staffing.
As a result of Holtaway’s assistance, the business plan was completed, the lea se was negotiated and signed in December of 2010, and Brody began the tenant improvements build-out to save money. Due to the difficulties with bank financing for new businesses, the owners provided their own start up investment with the help of their family. Other
SBDC Advisors were consulted for possible financing, staffing set up, and the POS and inventory/bookkeeping system. The Feuerhakens enjoyed their wedding, and the business was ready to open at the end of April, with the ribbon cutting and grand opening in May 2011.
Client Statement: “Keith Holtaway gave us clarity, much needed moral support and a little push we needed in making decisions. He was available to us anytime we needed him and introduced us to his large network. It was nice to share our experience with someone who has already gone through the process in order to avoid big and costly mistakes.”
Bob Gillis of Santa Cruz, CA, sold his first patent for a small tent design to The North
Face in 1975, and it forever revolutionized backpacking tents from being A-frames to the geodesic dome shapes seen around every campfire today.
Shelter Systems
was started in 1976 and has grown to manufacture environmentally sound, low impact, portable shelters tents and greenhouses. Gillis began selling tents for individuals and events such as Burning Man, and brought on his daughter Eleanor to develop a new
“Grip Clip” product in 2006.
Eleanor stayed on with her father to help run the company, and the company began expanding quickly, due to the portability and long-term reliability of the shelter tents.
Their market expanded when interest increased in their product for disaster preparedness, resulting in their first sale to the city of Phoenix, AZ in 2008. Shelter
Systems reached their largest market yet in 2009 when, due to the disaster in China, the U.S. Olympic Committee paid $300,000 to provide 1,000 shelter tents for disaster victims. In October, the Federal Emergency Management Agency ordered 800 dome tents for the tsunami victims in the Samoan Islands. Shelter Systems received their
4

141 largest order ever in January of this year, for 3,000 dome tents bound for earthquake relief in Haiti, purchased by the United Nations.
SBDC began a long-term relationship with Shelter Systems when Eleanor and Bob met with Advisor Louis Panetta to assist with the new product development and launch.
John Hibble, SBDC Marketing Advisor, counseled them on brochures, website, and marketing presentation issues. He also advised to subcontract shipping and assisted in trade show preparation and follow-up. Eleanor attended a national hardware trade show with no previous experience in sales, and felt competent based on SBDC sales presentation advising. She was able to sell $4000 in initial orders with potential long term re-orders. Shelter Systems made their first disaster preparedness sale in 2008, and have since delivered their tents to aid the victims of the earthquakes in China, Haiti and Samoa.
Client Statement: “As soon as I realized what a resource the SBDC is, I started taking advantage of the programs. It’s easy, it’s free and there is very little paperwork to fill out. It’s simple to get what you need. The people are great. I always feel satisfied with the help that I get. It’s invaluable”.
Restaurant owner JP Iuliano came to the Central Coast SBDC in 2011 to create a new fusion restaurant for downtown Santa Cruz. He and his partner Fernando wanted to fuse simple Mediterranean and Latin influences featuring local, organic & sustainable ingredients. These Partners came together almost 15 years ago in the Santa Cruz area, each bringing an important piece of their culture to their new venture;
"MexItalian."
JP was raised in both France & Italy before moving to the United States in 1993, while
Fernando came from Oaxaca, Mexico and worked with JP at his existing restaurant
Cafe Mare in Santa Cruz (a previous SBDC client) .
The initial challenge for newly-hired SBDC Restaurant Advisor Tom Bruce was to assist in the business planning by focusing on the fusion concept, menu development, marketing planning, and location remodeling including a kitchen re-design. The owners invested privately.
After Keith Holtaway provided basic business set up assistance, Tom worked with JP and Fernando to create the new fusion menu, remodel the location and kitchen, develop a website and marketing strategy, set up weekly prime cost reports, and coordinated mystery shopping for feedback before official opening.
Mexitalia held its official opening as a new business at the end of October 2011, and hired 8 new employees. This innovative eatery has received rave reviews from local food critics.
Client statement: “During my recent new business venture, MexItalian, the Cabrillo
College SBDC provided me with invaluable assistance. With their help I was able to streamline the kitchen design/work flow, re-engineer the menu, and create necessary graphics and interior design elements to create a more cohesive brand image. Tom
Bruce was easily accessible, supportive, knowledgeable and very easy to wo rk with.”
5

Business Counseling:
Total Clients
Counseling Hours
Types of Business:
Retail
Service
Wholesale
Manufacturing
Construction
Business Ownership by
Gender:
Male
Female
M/F Partnership
Business Ownership by
Ethnicity:
African American
Native American
Hispanic Latino/a
2009
424
2,853
140
203
64
57
92
9
60
24
2010
381
2,302
144
165
52
69
92
9
69
23
2011
423
2,710
68
103
6
48
28
169
177
62
SBA 2011
Goal
514*
3,597*
%
Change
2010 to
2011
11%
18%
-1%
12%
-33%
-30%
22%
17%
7%
19%
Asian
White
5
71
4
18
293
7
1
99
18
239
9
2
89
20
250
29%
100%
-10%
11%
5%
No-response
Jobs Created
Jobs Retained
Loans to SBDC Clients
104
212
116
247
140
234 186**
287 457 136 214**
$6,901,400 $8,121,772 $5,105,000 $1,840,000
21%
-5%
-70%
-37%
Events, Workshops,
Seminars
Attendees of above events
70
1,429
82
1,856
87
1,212
72***
1,200
6%
-35%
* Number of clients served and counseling hours goals were established before a funding cut. The goal was not reduced accordingly.
** Goal of jobs created / retained was not met due to prevailing economic conditions.
*** Number of seminars actually presented was lower than SBA goal due to the loss of funding cited above.
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