Could more entrepreneurs help revive the heartland? – The Journal at the Kansas Leadership Center

For heartland communities hoping to thrive, encouraging and supporting entrepreneurs can energize the local economy. Places such as Ord, Nebraska, have emerged as regional poster children for economic development. Peers such as Council Grove in Kansas are seeing green shoots of their own. But such shifts can be difficult to make, and there isnt a tried and true formula that works everywhere. To figure out what works, communities have to develop their own combination of tactics and be willing to push until they find their version of success.

With 15 sites listed on the National Register of Historic Places, visitors to Council Grove, such as Barbara Worley of Olathe and daughters Mila and Eloisa, might be forgiven if they expect to see a town tightly tethered to its past. In fact, entrepreneurship isnt just encouraged in the Morris County seat, its being cultivated. (Photo by Jeff Tuttle)

All Bob and Christy Alexander had in mind was renting studio spacein downtown Council Grove to expand a side hustle that was burgeoning into a small art business.

Then, with Bob branching out from stained glass into metalworks, the couple started to think about buying one of the many vacant, dilapidated buildings along Main Street. So they borrowed some money and set sail with no business plan and absolutely no idea about how to run a business.

Fourteen years later, Alexander ArtWorks is still going strong. Some townspeople hail the Alexanders as pioneers who paved the way for a Main Street rebound, but Christy rejects the label.

Pioneer indicates something that is intentional, she says. We were never trying to start a renaissance or anything like that.

Whatever the origins, the Alexanders sparked a momentum that helped this Flint Hills community of approximately 2,100 residents write its own playbook for rural revitalization. At a time when the story being told about our nations smaller communities is typically one of decline, disinvestment and a lack of innovation, Council Grove shows how entrepreneurs can energize an economy for the better by making it easier for residents, particularly younger generations, to start up their own business, and supporting them once they do.

But if you want more entrepreneurs in your community, how exactly do you get them? Because there doesnt seem to be an exact formula that works for every community, and the answer can seem a bit mysterious at first.

Barriers vary widely from community to community, as the Kansas Leadership Center, publisher of The Journal, learned during a recent Heartland Together listening tour about rural entrepreneurship through Kansas, Missouri Nebraska and Iowa. (The tour was part of a $150,000 grant to KLC from the Ewing Marion Kauffman Foundation. This story was produced independently of the tour.)

In some places, tour facilitators learned, it can be hard for business owners to secure a downtown storefront because of decaying buildings and absentee landlords. In others, the challenge is getting workers who can secure a job with salary and benefits at the local manufacturing plant to see starting their own business as an attractive alternative. Natural disasters, changing demographics, conflict between established residents and community disruptors, and wariness about communities aiming too high can all complicate the equation.

However, by looking at communities such as Council Grove, and Ord, Nebraska a similarly sized community that is being touted by its advocates as a regional example of rural resurgence patterns emerge that show a communitys path to forging a more shared mindset about growth and entrepreneurship.

One is the importance of building upon a foundation of young talent and finding ways to support their ventures, through both financial programs and community loyalty. Caleb Pollard and his partners in Ords Scratchtown Brewing Co., one of a number of entrepreneurial ventures that have been popping up in the central Nebraska community of about 2,000 people, like to call it positive transformation through fermentation.

Other trends include a willingness to preserve whats most essential about a communitys past by trying new things to help secure its future, whether that be by embracing immigrants or by nurturing entrepreneurism in schools.

But such shifts arent necessarily easy to make quickly. Downtown Alma, which is about 40 miles northeast of Council Grove in neighboring Wabaunsee County, is also showing signs of life. But community attitudes have tended to be more cautious about change than in Morris County.

Part of the reason is that Wabaunsee County is a county of small towns with strong individual identities and different regional loyalties scattered across multiple political jurisdictions. Collaboration on economic development there requires working across different perspectives in a way it doesnt in a community where 40% of the countys population is anchored in one place.

Because each town and region is distinctive, its important to be cautious about drawing overarching lessons, economic development experts say. One that rings clear, from Ord in particular, is that it takes a combination of tactics to achieve success. A focus on small businesses, for instance, doesnt need to preclude targeted recruitment of large employers, and financing assistance for startups can be incredibly helpful.

Another takeaway is that the revitalization of a community feeds upon itself: A rebounding community is attractive to younger generations, who then become the risk-takers that fuel continued growth. Instilling school-age kids with entrepreneurial spirit is an important part of recruiting and retaining young leaders.

In the end, success breeds success. Nothing shuts up naysayers better than proving them wrong, entrepreneurs told The Journal. Which means that entrepreneurs and the communities theyre working in need to be able to hold steady through failures and learn from setbacks to ultimately secure wins and develop a winning formula that works for them.

No town is too small to make a comeback, says Christy Preston. She covers the western part of the state for NetWork Kansas, a nonprofit established by the state to provide fiscal and technical assistance to small businesses and entrepreneurs.

When we work at it together, then everything is unstoppable, Preston says. You can do a lot of great things.

Rural decline is far from universal, with some researchers noting many thriving rural counties benefit from proximity to population centers, an influx of immigrants and popularity with retirees. But the overall trend favors cities and suburbs.

The latest census figures show that 86% of the U.S. population lives in a metro area. In examining 2020 census data, the Kansas Health Institute determined that approximately 60% of Kansans live in urban counties. Similar dynamics are at play in Missouri, Nebraska and Iowa.

The hollowing out of some rural towns means more than just the loss of a Rockwellian way of life, says Don Macke, a Nebraska-based community economic development expert. Downtrodden communities filled with poor and unhealthy people rely heavily on government assistance financed by all taxpayers, he notes.

Its not like they go away and die, Macke says. They just become really expensive.

Macke leads e2 Entrepreneurial Ecosystems, which is part of NetWork Kansas.

It is his organization that identified Ord as a model for a rural rebound by nurturing entrepreneurism. It has a web page devoted to its extensive studies of Ord. But the communitys success is as rooted in theexercise of community leadership as it is in technical solutions that encourage entrepreneurs.

Over the past two-plus decades, leaders in Ord have persuaded voters to invest in themselves through a 1% sales tax for economic development, money that can provide gap financing for local small businesses in need of additional capital to get started. The first loan went to Valley Thunder Rods and Restoration, an auto body shop that specializes in antiques and classics, which remains in business under the ownership of Trent Proskocil and his brother. (NetWork Kansas provides similar financing through its E-Community program, which includes more than 60 communities around the state.)

To date, more than $6.2 million has been loaned to 68 local businesses throughout Valley County, leveraging over $19 million in development.

Community officials attracted some businesses, such as an ethanol plant that spawned a cluster of related industries, including Valley Transportation, a trucking company established to haul grain and byproducts. They also fought to keep important economic linchpins Ord already had. A successful push in the mid-1990s to save the community hospital, which operates now as the Valley County Health System, created an anchor for a health care cluster that is a leading creator of jobs in Ords region.

At the same time, there have also been investments in quality of life amenities. A nonprofit, the Valley Performing Arts Theater, was established and acquired the communitys iconic theater on the square to put on performing arts events. Such offerings, e2 indicates, are essential to the core formula for rural community development success in todays competitive location environment.

Whatever the formula, the community is producing results that could be hard to refute.

Although Valley County experienced a 4.7% drop in population from the 2010 to 2020 census, it saw a small uptick in population during the pandemic-era population shifts of 2021. Several other indicators are pointing in the right direction. They include personal income, job growth and retail sales.

Between 1970 and 2016, personal income in Valley County grew from $120.9 million to $183.8 million in real dollars, a 52% increase, according to e2 research. That outpaces the 40% rate of growth Americans as a whole gained in median personal income according to the St. Louis Federal Reserve over roughly the same period.

The county also saw a slight gain in employment between 2000 and 2018, outstripping peer counties in Nebraska, Kansas and South Dakota.

But the No. 1 metric, in Mackes view, is population growth among people in their 30s and 40s young families and the next generation of leaders. Between 2000 and 2010, according to e2, Valley County experienced a nearly 54% increase in residents between the ages of 30 to 34. The increase was nearly 10% in the 40-44 age bracket.

In the 2020 Census, the countys working age populations percentage dropped slightly, from 54.2% to 51.3% of the total population, although detailed figures on the exact demographic breakdown were not yet available.

Mackes point speaks to another argument Mackes point speaks to another argumentfor rebuilding small towns.

It preserves a way of life that many Americans enjoy, offering a slower pace, less stress and closer community relationships than in a city.

That desire to live in such an environment was often cited by the dozen small-business owners The Journal spoke to for this story, including group conversations with entrepreneurs in Council Grove and Alma.

The businesspeople in the two Kansas communities do everything from running craft breweries and coffee shops, to restoring old buildings for event spaces and stores, to doing custom screen printing and embroidery, and operating a specialty beef company.

Economic development officials supporting these business owners include Tracy Henry, executive director of the Greater Morris County Development Corp., and Jim MacGregor, director of economic development for Wabaunsee County. MacGregor succeeded Henry after she left Wabaunsee County for the Morris County position in late 2019.

In Council Grove, Jesse and Deidre Knight are among the owners of Riverbank Brewing, along with Lindsay Gant and others. Beth Watts owns Watts Coffee Co., which she operates out of space she rents in the Alexander ArtWorks building.

Riverbank Brewing opened in November 2021, and Watts opened her coffee shop in January 2019.

Jesse grew up in the nearby town of Alta Vista, and Deidre grew up in Salina. They both have farming backgrounds.

They lived in Kansas City for a while after graduating from Kansas State University, but they found themselves in Council Grove often. The thought of moving to Council Grove had an irresistible appeal.

It was a way of life that we appreciate, Jesse Knight says. Its not that Kansas City wasnt fun. I think we knew that wasnt where we wanted to be long term.

Gant is originally from Dodge City and moved to Council Grove when she and her husband got married. Watts moved to the area in 2004 when her husbands job brought them there.

We are really creating a life we all want to have here. We want cool stores, cool coffee shops, (a) cool brewery, cool buildings, cool event spaces, Gant says. We are all choosing to be here, so we are creating a life

To be proud of, Deidre Knight interjected.

Yeah, Gant agreed.

Almas downtown entrepreneurs include 32-year-old Morgan Holloman, who owns the Antique Emporium of Alma and Mill Creek Mercantile, and Wrenn Pacheco, 40, who runs Pacheco Beef, which sells high-quality beef from the cattle she and her husband raise on their ranch. Dylan Barber, 51, is the owner of the Pep Club Locker, which provides school spirit wear and other products.

For Pacheco, the quality of Flint Hills grass is a key reason she and her husband are in Wabaunsee County. But there is more to it than that.

I believe in what this community has, she says. I believe that there is stuff and things for people to come and see and get to experience what we have here, and what we get to experience every day.

But even in places where entrepreneurs appear to be flourishing, its not always clear how much the path is being cleared for people of different backgrounds to pursue their dreams. Most of the business owners interviewed by The Journal reflect the demographic makeup of their communities, which are overwhelmingly white. And while its perhaps unwise to underestimate the risk of starting a business just about anywhere, its not uncommon for business owners in these communities to have a clearer path to accessing resources or other income streams to help them out.

Could that change over time?

When Henry talks to high school freshmen about BYOB, she is not encouraging underage drinking. Instead, she tells them that the acronym means be your own boss.

She delights in planting these seeds of entrepreneurism. To her, that is the ultimate form of economic development.

Henry grew up in Cambridge, Kansas, a town of fewer than 100 people about 60 miles southeast of Wichita. When she finished high school, her parents got her some luggage and sent her on her way. Dont live the rest of your life in Cambridge, they told her. Go out and find something better.

Thats the mindset Henry is trying to change when working with students in Morris County. The message is: A four-year college degree and relocation to a city is not the only road to success.

Perhaps, she says, that message will resonate with the student who spends evenings tinkering with a motorcycle, dirt bike or mower. Maybe that student opens a small-engine repair shop.

They are not going to employ 30 people, Henry says. Thats OK. They are providing a good job and a decent living for their family. They are going to stay there. They are going to raise their kids; they are going to go through the school system.

And who knows? Henry says, they may need to bring on a second person, and maybe a third.

Its not an overnight success, she says. To me, that is economic development. To me, economic development is growing your own.

Beth Watts opened Watts Coffee Co. in Council Grove in 2019 in space she rents in the Alexander ArtWorks building. And if online reviews are an accurate indicator, her shop is one of the perks of local living. (Photo by Jeff Tuttle)

Yet change doesnt always come easily, even in communities that appear to be headed in the right direction. In choosing whether to embrace entrepreneurship, communities have to wrestle with competing values, squaring a desire for growth and progress with a willingness to deal with conflict and loyalty to friends and family, history and past successes.

Silver Tongued Devil is a Belgian tripel, and its a big seller for Scratchtown Brewing when it comes out each fall. The success of the beer is one way Pollard and his partners get the last laugh on opponents who made life difficult as the business moved toward its opening in 2013.

The name of the beer comes from the nickname brewery opponents gave Pollard when they complained in an online forum.

Pollard, 42, is still unsure what generated the vitriol and false accusations including that his wife was running a brothel at the brewery. Crazy as it might sound, he thinks some of it came from cat lovers who were outraged by a feral cat ordinance under consideration when one of the Scratchtown Brewing partners was on the city council.

Some people thought it was funny in town. Some people thought it was horrific. Some people didnt care, Pollard says of the backlash. But for us it was a nightmare. It was a three- year nightmare.

Pollards experience is an extreme case, but it illustrates that naysayers and skeptics can be a huge hurdle in rebuilding a community through entrepreneurism, especially in a tight-knit small town where conflict can feel up close and personal.

In Council Grove, entrepreneurs have crossed swords with residents who prefer selling the towns history.

I think there is a kind of a group of people here who want us to walk around in period costumes from the 1800s and be gunslingers, because that is what they think draws people to town, Watts says.

MacGregor has encountered similar resistance in Wabaunsee County.

The geography and history of Wabaunsee County might explain the lack of vision, says MacGregor, a Virginia native who fell in love with the Flint Hills when he did tours at Forts Leavenworth and Riley during his career as an Army officer. He and his family settled outside Alma a few years ago after MacGregor retired from the service.

The majority of the countys population is rural, MacGregor notes, and the remaining 40% live in seven very small towns. Alma is the biggest with about 800 residents.

The county, MacGregor notes, is part of three state Senate districts and is split among seven school districts.

Alta Vista on the west identifies heavily with Morris County because its kids are part of the Council Grove school district, and MacGregor says Harveyville to the east sometimes feels more like it is part of Shawnee or Osage counties than part of Wabaunsee County.

And then, he says, there is a historical religious divide between the northern half of the county, settled by German Catholics, and the southern half, settled by German Lutherans.

Listening to MacGregors descriptions of Wabaunsee County, its easy to see how they could apply in other parts of the state.

Wabaunsee County, he says, has never been a county that has spent a lot of energy or money investing in the future potential of growth. There is very much a sense in some places that what we have works, that this is a great place and we dont want it to change.

Evidence of that attitude, MacGregor says, was apparent three decades ago when the county rejected a power plant that ultimately located in Pottawatomie County.

You can also see it today, he says, in some natives who have never traveled outside the county and in the Alma residents who disagreed with incentivizing the development of 16 residential lots in town. The incentives were ultimately approved by the city council with support from the local school board and the county commissioners.

The population trends in Wabaunsee County are actually more positive in recent years than the ones in Morris County. Almas home county lost fewer people than Council Groves home county from 2010 to 2020, and recent estimates suggest that Wabaunsee County climbed up toward its 2010 population mark in 2021 while Morris County saw a slight dip.

These are good people, MacGregor says, they just come at these issues from a different perspective on what works and what the future might look like based upon their past experiences.

Pacheco and other business owners in downtown Alma have more prosaic concerns, such as how to draw more foot traffic into their stores. Theyd also like to see owners of the empty downtown buildings take responsibility for making them look presentable.

If there are whispers in town that they are crazy to make a go of it in Alma, they pay them no mind.

We are grinding, Holloman says. We are making it work.

Morgan Holloman, owner of the Antique Emporium of Alma and Mill Creek Mercantile, knows that rural locales are often seen as too rocky for entrepreneurial endeavors to put down roots. But she finds motivation in negativity. We are grinding, she says. We are making it work. (Photo by Jeff Tuttle)

Even when progress is achieved, its not without challenges. Sustaining success is a problem that can creep up, especially if communities arent prepared for it.

Pollards experience in Ord tells him that community leaders in Council Grove, Alma and elsewhere need to be aware of burnout. Pollard moved to Ord with his wife and children 14 years ago to become head of the Valley County Economic Development Board. Eventually he tired of public service. But after a little time away, he is re-energized about becoming more civically involved.

Such ebbs and flows are natural, Pollard says, and need to be managed rather than avoided.

Waxing and waning is really natural, he says. Volunteers will come and go, leaders will come and go, and thats OK. Re-engaging is OK. That is the one thing. It is a lifelong commitment, and your role can evolve in the community over time.

Proskocil, the co-owner of the body shop in Ord, is a native. It was a nice place to grow up, he says, with enough stuff for kids to do.

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Could more entrepreneurs help revive the heartland? - The Journal at the Kansas Leadership Center