Program aims to keep businesses in business
The Kansas University School of Business is preparing to play matchmaker in a new initiative that won recent applause from the Kansas Board of Regents.
“This sounds like a wonderful program,” said Regent Kenny Wilk, of Lansing, after being briefed last week by KU School of Business Dean Neeli Bendapudi.
Targeted at rural areas, the program will match businesses that are looking for successor owners with business school graduates who want to run and grow a business, Bendapudi said.
Bendapudi said when businesses shutter because of the lack of a successor, that accelerates economic decline because the community loses the services and tax base. Keeping that business open, she said, helps the local community and the new owners.
“It’s a pretty intriguing idea,” said Regents Chairman Ed McKechnie, of Arcadia.
Wally Meyer, director of entrepreneurship programs at the KU School of Business, said he got the idea for the program after a visit to Goodland, where an economic development official was complaining about businesses shuttering because owners were retiring and there were no successors.
“Goodland is a long way from Lawrence, so I had plenty of time to think of a solution on the drive back,” Meyer said.
He thought of businesses closing shop in western Kansas while there’s a pool of educated students graduating every year in Lawrence with the ambition and expertise to run a business.
So the Red Tire program was created. Red Tire stands for “Redefine your Retirement,” and it will be launched next month after more than two years of planning.
“Neeli is justifiably proud of the role that the KU School of Business is playing in terms of reaching out to businesses across the state who are experiencing a hellacious problem of having to shutter doors because of a lack of successor,” Meyer said. In many towns, “You lose the business, you lose the schools, and increasingly there is no reason to live there,” he said.
Red Tire will identify businesses that have a chance of growing as well as graduates who can make up the ideal management team. Some of the graduates may have already had a successful career in other cities and want to move back to Kansas, Meyer said.
The transaction will be between the buyer and seller with advice to both parties from a Red Tire board, which includes leading business figures. The program will be the guarantor of the loan that the buyer will use to purchase the business. Red Tire will receive its initial funding from government grants and private contributions.
Meyer is hoping that in the first year, the program will do one or two deals. It will focus on medical and health-related businesses, such as pharmacies and agriculture. Other regents schools also will be pulled in to help, he said.
Meyer said he believes the current crop of business school products are up to the challenge. They’ve seen down economies, know that growing a business takes hard work, and their heroes are entrepreneurs, he said.
“These people are a great pool to draw from,” he said.
— Statehouse reporter Scott Rothschild can be reached at 785-423-0668.