Watch: "NetWork Kansas helps Mildred, Kansas, keep its grocery store" | 2:52
The viability of rural businesses often depends on help from support organizations and city officials, who can mean the difference between success and failure.
On a spring evening in 2014, Regena and Loren Lance were at their kitchen table in Mildred, Kansas, population 28 in the last census, but now down to 22. Regena wanted to bake a cake but was out of eggs. The local grocery, Charlie Brown’s Store, which had operated continuously in one form or another since at least 1915, was going out of business and closed till Saturday. The next-closest grocery store was 30 minutes away in Iola.
"I was sitting there, and I said, 'This is so frustrating.' And I looked at my husband, and I said, 'What do you think about buying the store?' And he said, 'I was just sitting here thinking the same thing,'" she explained.
Though Regena had been trained as a teacher and Loren as a mechanic, they became grocers that June. They bought the grocery store, which had served not only the town of Mildred but all the surrounding towns in at least a 50-mile radius, and changed its name to the Mildred Store.
The town had no other businesses, only a church. The Lances felt confident the regulars would continue to support the grocery; their income should be steady. But they hadn’t expected an electric bill they could barely afford to pay.
Shelley Paasch was only partly kidding when she described her work at NetWork Kansas as "making dreams come true." She oversees eastern Kansas, supporting rural entrepreneurs and small business growth.
Since its inception in 2006, NetWork Kansas has established 60 "e-communities" across the state, loaning more than $18.53 million to 555 businesses, and leveraging $87.79 million of additional capital from traditional lenders like banks and resource partners. Funding comes from the state. E-communities can choose to grant the funding to businesses, but most often, Paasch explained, the capital is in the form of low-interest, revolving loans. The thinking is that if rural entrepreneurs – that is, the craftspeople, makers, owners of hardware and grocery stores, as well as the technically savvy who are building service or retail businesses online – are supported, local economies will be positively affected as well.
Kansas communities or counties apply to become an e-community, which gives them support from NetWork Kansas. Once the county has been accepted as an e-community, individual businesses apply to the county for assistance, or the leaders Paasch works with target businesses looking for a hand getting started or scaling. Paasch said that her organization meets with the leaders, then the leaders work with the small business owners.
The Lances learned about NetWork Kansas in a more roundabout way. Shortly after opening the Mildred Store, they invited Kansas State University representatives to perform an energy audit. They learned that their electric bills were running high because their century-old building had poor insulation and energy-inefficient lighting and coolers. The couple updated the insulation and installed LEDs, but new coolers – the main source of their astronomical energy bills – were too expensive.
Regena said that they applied for a USDA loan to help them with the cooler replacement, but learned that, if it was approved, the USDA would only reimburse them for 25% of the cost of replacement.
The two were relieved to learn about NetWork Kansas and the Kansas Healthy Food Initiative that it supports, after Allen County Economic Development sent them to Kansas State University’s biennial National Rural Grocery Store Summit. The Lances applied for a Kansas Healthy Food Initiative grant, and were approved, receiving enough funding to cover the cost of three new coolers.
Regena said that without the funding, she and her husband would still be struggling to pay the bills or would have shut down by now.
"The store doesn’t generate enough extra income to cover the expenses of the electricity we were having to pay. [The new coolers, insulation, and lighting] have literally cut our electricity bill down from $1,500 in the summer, to I think our largest bill last year was $600. It’s a tremendous amount," Regena said. She added jokingly, "I make my employees suffer a little. I don’t turn the air conditioning on till the candy bars start melting."
Don Macke is vice president of e2 Entrepreneurial Ecosystems in Nebraska and directs its Entrepreneurial Communities solution area. He works with rural entrepreneurs in the continental United States and Canada. Macke said he offers a framework for rural entrepreneurs that helps mayors, bankers, economic developers, and people in local chambers of commerce identify local entrepreneurs who have growth orientation or potential. Those entrepreneurs are important, because, ultimately, they are the ones who will reach external markets, create jobs, tax bases, and bring wealth into the community.
He offered up a story of about Ord, Nebraska, a town currently of 2,100 people. Twenty years ago, the people of Ord realized that they’d never recovered from the 1980s farming crisis. Their numbers were dwindling quickly.
"They had been a small community hoping they could bring an industry to town. But they were too small to really do that. So, they said, 'Let’s focus on helping the folks who are already here,'" Macke said.
Early on in Ord’s journey to retain its residents and bolster its economy, two men in their early 20s approached a woman in the local chamber about starting an auto body shop. With limited experience, there were questions about their ability to see the idea through.
Macke said the question that made the difference for the young men was: "'Are we going to give them a fair chance and not prejudge who should succeed and who shouldn’t?' That changes the culture when you have people growing up and going, 'Okay, I’ve got a crazy idea' knowing that someone will give them a chance."
The auto body shop now employs 100 people and serves customers from 12 states.
In the last decade, Ord has seen a 56% increase in 30 to 34-year-olds, a strong indicator of a healthy community. "If you get young adults, and if that part of your population is growing, that means your school is safe from consolidation, and also these are people who start, buy, work in businesses, become your workforce in your schools and your hospitals," Macke said.
The mayor of Logansport, Indiana, Dave Kitchell, joined Macke and NetWork Kansas’ Paasch in Kansas City for the Kauffman Foundation’s ESHIP Summit at the end of May.
Kitchell agreed with the importance of appealing to young adults, both entrepreneurs and otherwise, for the fiscal health of a town’s economy. As the mayor, he’s tried to play up his city of 18,300 as a "micropolitan economy" which he said he thinks is attractive to millennials who are interested in living in urban areas. Logansport is between South Bend and Indianapolis, 20 miles from Kokomo and 40 miles from LaFayette. He said he doesn’t think of the town as rural or suburban but noted that it is one of the nation’s top 100 micropolises. Their biggest employers are Tyson Foods and the advanced manufacturing industry – including factories that create parts for Indy 500 cars. Positioned as such, he said Logansport has a small-town charm as well as big-city advantages without all the big city costs. That combination is a draw to entrepreneurs.
"We’re seeing that millennials now, particularly entrepreneurs, need to be around service-sector economies. They need lawyers, libraries, coffee shops, places to grab a sandwich, internet access, they need places to hang out, they need a 3D printer," Kitchell said.
He said he doesn’t think rural entrepreneurs are much different from suburban or urban entrepreneurs. "In rural I think it’s easier to make a splash in a smaller pond. I also think that there’s less pressure involved in doing that. We need to celebrate what they do and how they’re doing it because they’re out there, they’ve got an idea, they know how to get it done, and they’ve got a plan," he said.
As the Lances approach the fifth anniversary of opening the Mildred Store, they’ve ramped up their creativity in an effort to plan for their continued success. The store is now home to one of the best delis in the region, according to their distributor. Though they don’t have a full kitchen, they’ve begun serving biscuits and gravy on weekend mornings but are frequently asked to serve during the week as well. They even turned a former storage room into an events space that locals are enjoying for wedding receptions and graduation parties.
Regena downplays their innovation. She said, "It’s just doing little things that are kind of unique to us."