Executive director: ‘SBDC will have a presence in Jackson County’ under state network following closure Dec. 31 closure; state seeks independent contractor locally to provide services

By Holly Dillemuth, Ashland.news

The State Small Business Development Center (SBDC) Network based in Eugene will step in to offer its services to Rogue Valley business owners starting Jan. 1 following an announcement by Southern Oregon University Nov. 10 that it is set to close the Medford SBDC office by Dec. 31.

“We definitely knew that the budget environment would mean less capability to subsidize the SBDC’s operations, but we did in earnest work with the state to find a creative solution to continuing services,” SOU President Rick Bailey said in a November news release announcing the pending closure. “We went back-and-forth with the state in our effort to create a single center for Jackson and Josephine counties – despite our budget issues – but ultimately were unable to move our proposal forward.”

State director Mark Gregory told Ashland.news last week that virtual advising through the Oregon Small Business Development Center Network (OSBDCN) based out of Eugene’s Lane Community College will continue for those in Southern Oregon seeking small business services in the Rogue Valley in the new year. Rogue Community College will continue to be a subcontractor to the state network, but SOU will not.

The state network at Lane Community College will provide virtual services until an independent contractor is found to partner with the statewide network operated through Lane Community College’s lead office in Eugene to offer a localized service, similar to services offered by the SBDC at SOU. 

“We are seeking an independent contractor to provide full-time advising services for Jackson County,” Gregory said via phone. “We’re trying to accelerate the timeline for that and believe that we have some remote options additionally available beginning in January. We hope to find someone local soon after.

“We would manage that through the lead office,” he added.

“Fifty percent of our advising is online, so we have a deep niche in supporting online advising,” Gregory told Ashland.news via phone. “We see the need for that local, independent contractor so that we also have that in-person availability.”

What is the Market Research Institute?

Additionally, the Market Research Center housed by SBDC will also close Jan. 31.

“This is one of the top services in the nation,” said Marshall Doak, executive director of SOU’s SBDC, who also serves as administrator for the institute. “It has excelled over its lifespan.”

The Market Research Institute, hosted by SOU since 2014, has offered in-depth, applied market research to clients of SBDC all across the state.

“The intake is from the whole SBDC system,” Doak said. “At one time, 20 centers were sending clients our way. We would work out their needs and send reports back.

“With the closure of the SBDC here, the state SBDC Network has opted to put that on hiatus.

“These are difficult decisions, and they do affect people – big time,” he added.

The organization is fully virtual, but has been run out of the SBDC office in Medford as well, according to Doak.

“The Market Research Institute was established at Southern Oregon University given their strengths in supporting both business and research,” Gregory said. “We’ve had to place a strategic pause on those services right now and are exploring other options for how we’ll provide that.

“We’re going to explore innovative research options, including AI and how it could support unique research requests,” he added.

A proposal dated July 25 written by RCC and SOU administrations and obtained by Ashland.news states that the current funding model for SBDC puts limitations on the university, including the following:

• Stagnant Small Business Administration and Business Oregon allocations
• Rising costs in PERS, insurance, and compliance
• College positions for directors restricted to only SBDC duties
• Operations and facilities expenses not accounted for in SBDC budget
• Equal funding for every Oregon SBDC regardless of population and/or goal attainment

SOU and RCC issued a proposal with three options, including options to partner with RCC to operate SBDC jointly during the summer. The state office denied the request for SOU and RCC to join forces in the effort, which was SOU’s preference, according to Bailey in a Zoom interview with Ashland.news on Monday.

“As we explored options with our partners at RCC, our preferred option was to join forces with our friends at RCC and co-host a joint Rogue Valley regional small business development center that would provide coverage for both Jackson and Josephine counties and would work on sharing resources to create efficiencies to create overlapping productivity and performance and a true collaborative project,” Bailey said. “To be fair, ultimately we want to be respectful of what the state prefers.”

Bailey said SOU is always going to prefer solutions that are more collaborative and involve more partnerships.

“If there is the option to have SOU and RCC together on something versus RCC or SOU separately, I’m always going to choose the option that has us working together … whether it’s SBDC or anything else,” he said.

“Whatever solution is decided, our hope is that there will still be valuable services provided to businesses and prospective businesses in our communities. It’s important for all of us.”

Bailey said the university is honored to have been able to serve the community through hosting the SBDC for four decades.

“It is still our responsibility as a higher education institution to be fully connected with our business community to make sure that we are providing workforce opportunities and serving as a genuine partner to workforce and economic development for the region and state,” Bailey said in a Zoom call with Ashland.news last week.

SOU will continue to receive funding for the center through Dec. 31. RCC will receive $72,000 in additional funding from Oregon SBDC Network to expand its service area, according to a  response from Gregory to both SOU and RCC presidents dated Sept. 19, obtained by Ashland.news.

What is SBDC?

SBDC provides confidential, one-on-one advising for business owners or entrepreneurs and is funded by the federal Small Business Administration, created in 1953 by The Small Business Act signed into law by President Dwight D. Eisenhower. Centers also provide resources for business owners, ranging from finding solutions for employee issues, hiring, creating new divisions within companies and exports as well as general business education, both online and in-person.

“We’re paid for by the public so especially early stage entrepreneurs who are cash-strapped can help develop their company without going under before they get started,” Doak said. “That’s one of the major things that we do.”

Doak said he works with 100 to 125 businesses and entrepreneurs in the Talent and Ashland area per year.

“We’re very popular because we help people and we don’t charge them,” Doak said. 

Doak has served in his role at SBDC since 2017. He announced his retirement from the center about a year ago. 

“There is a tragedy here and it’s the employees that are here,” Doak said.

There are nearly a dozen employees between SOU’s SBDC and the Market Research Institute, Doak said. Two full-time and two part-time employees work out of SOU’s SBDC office, located at the Higher Education Center in Medford. Most of the MRI’s several employees are remote.

Since COVID, the center has transitioned toward virtual meetings with clients. Doak said the center also employs some remote personnel.

Doak shared pride in his team at SBDC.

“One of our greatest strengths (is) that they’re giving back to the community through the SBDC and that they’re not trying to make a living from the SBDC because the funding isn’t there for full-time jobs,” he said. “And so, everyone here has been giving from their heart.”

“We are not a large budget center,” Doak added.

The center runs on about $250,000 per year, with SOU providing approximately half of that amount, Doak said.

“And we produced large budget results. I’m very proud of the legacy of this center – by volume and by survey feedback from our clients.”

He spoke also of the financial difficulties in recent years for SOU, including the SOU Forward Plan, which cut $13 million over two years from the university, according to a previous Ashland.news story.

“We were spared,” Doak said.

Not so under the Resiliency Plan, which will cut $10 million over the next four years, including $5 million from this year’s budget alone.

“This time around, it’s severe,” he said. “This time, we knew with the draft plan that we were at least being considered to being eliminated.”

Despite successes experienced at the SBDC, Doak said the concept of closing down has “been a possibility for years.”

“I was thinking this morning, if I was to give SOU advice right now when you’re struggling financially is to go back to their core (mission), and that’s what they’re doing,” Doak said. “So they’re following the advice we would be giving.

“Some of our businesses that don’t form or go under, they go to the university as a result of contact with us,” he added. “But we’re non-credit … and that’s a big deal because you have to have credit classes and degree completion to get paid in the university system.”

Doak said he was not in the room for discussions regarding the SBDC closing as it was a decision made at a higher level.

He described the impact of the center locally as “profound” for business owners, nonetheless.

“Many of today’s well-established companies started in garages or by single entrepreneurs,” Doak said. “We’re currently over 400 clients a year in here through our center and it’s risen and fallen, but during COVID, it was just astronomical.” 

Doak said it’s an estimate that 11,000 individuals have been helped because “we don’t have 41 years of data at our finger tips.”

“The question is … the output of SBDCs are that businesses stay alive and that they grow and build. That employs people, that keeps property taxes high, that funds local services through the local governments, so who’s responsible to fund local business support? Is it the federal government through the SBA? Is it the state of Oregon through the Legislature?” he said.

“I think the model in the future is going to have to be different because the institutions that have carried this for 40 years, they’re struggling,” Doak added. “It’s a complex problem they’re facing.”

Doak said the idea of both RCC and SOU trying to join forces as a combined SBDC has been a concept for at least 25 years.

“I have not been in the discussions at the institutional level, but … there has been interest in the community region for RCC and SOU to combine to have a single Small Business Development Center,” Doak said.

“The intricacies between joining a university and a community college with different systems, different methods of being compensated by the state … it’s pretty difficult,” he added.

“If it was easy to do, it would have been done. A number of influential people over the years in both Josephine and Jackson Counties have worked on it.”

Doak said he believes RCC President Randy Weber and SOU President Rick Bailey work well together and that if a combined effort would work, now would be the time.

“They view things very similarly, they work very well together and that’s really positive for the area and so if they couldn’t make a deal with the OSBDCN … then it probably isn’t going to happen,” Doak said. 

Weber was not available for comment via his public relations staff as of publication time, but was able to connect with Kohler.

Dave Kohler, Provost and vice president of Student Learning & Success at Rogue Community College, said on Wednesday that RCC will continue to offer its SBDC services to Josephine County. 

Kohler shared additional insight into the future of SBDC services for Josephine County through RCC.

“As far as I know, RCC is going to provide services to Josephine County under our current contract with with the state SBDC (office),” Kohler told Ashland.news on Wednesday. “In order for us to offer those services to another county, which we have not historically been doing …

We would require initial funding to operate that and state SBDC was unwilling to provide that funding that would allow us to do that.

“Therefore, we’re not going to take on an entire other county … that’s three times the size and foot the bill for that from our own general fund in a period where we’re already hearing about potential reductions to the Public Community College Support Fund.”

Bailey stated he believes the state SBDC office, SOU and RCC are all in agreement about the importance of providing valuable service to our communities.

“We also respect that the state SBDC office has been tasked with finding a structure that serves its state goals in an efficient way,” he said. “We have all acted in good faith to try and solve this challenge and, ultimately, we have to respect the wishes of the state. It is their decision to make. I am proud of the partnership that we have with our friends at RCC and I’m proud of the creative proposal that our two institutions provided as a potential solution to a regional center, but ultimately, we need to be respectful of the state’s decision and my hope is that their ultimate determination will lead to a continuation of the quality support that our communities have received for decades.”

“When we look at all of the university services that the university provides, we have to be conscious of academic programming as a central core function of the institution,” Bailey said.

“It is the reason why we exist, but it’s not to diminish the importance of everything else that we do or everything else we host. 

“We can understand the value of … everything we offer and everything we do and we can acknowledge that we do have a primary mission,” he said.

Doak expressed empathy for SOU in the decision to sunset its partnership with SBDC.

“This is not an easy decision for SOU,” Doak said.  

“The institution needs to survive,” Doak added. “I can say with certainty that the SBDC will have a presence in Jackson County of some sort in the future.”

Doak also gave a call-to-action for those who may have benefited from SBDC or the Market Research Institute over the years.

“There’s an opportunity in front of everybody right now,” Doak said. 

“If you enjoyed the services, then be part of the solution to bring it back in so others can have that benefit also. There are plenty of willing people that will lend support to that.”

If you have been or are a client of SBDC and would like to share how SOU’s SBDC impacted your business at any point in the last 40 years, reach out to Ashland.news reporter Holly Dillemuth at [email protected].