There are few things worse for a struggling rural town than the closure of a successful business.
The town not only loses the tax revenue and jobs that business provided but it loses services or products that its residents must then do without or drive some distance to obtain. Every business a community loses contributes to the downward economic and population spiral that has gripped much of the western part of Kansas.
It’s easy to see that one of the best things the Kansas University School of Business could do for rural Kansas is to help preserve businesses in those communities. Business Dean Neeli Bendapudi briefed the Kansas Board of Regents last week on a new initiative aimed at achieving that goal.
The plan is to pair rural business owners who are ready to retire with KU business school graduates who are eager to get a start in the business world. Too many businesses in rural Kansas are closing simply because the owner retires and there is no one to take over the business, according to Wally Meyer, director of the entrepreneurship program at the KU business school. The new program, called Red Tire (which stands for “Redefine your Retirement), will identify businesses with a chance of growing and pair them with business grads who are ready to take over their management. Red Tire also would help manage the transaction between buyer and seller by guaranteeing the loan to purchase the business. Initial funding will come from private backers and government grants, and a Red Tire board, including local business people, would serve in an advisory role.
KU officials are hoping the program can close one or two deals in its first year and plan to focus its efforts on agriculture or health-related businesses. For instance, preserving a pharmacy is an investment in both the economy and the health of a rural town.
Meyer points out that recent business school grads are ready to take on this challenge because they have worked in down economies and embrace the entrepreneurial spirit. In a broader sense, these graduates also will be providing a breath of fresh leadership skill and energy that can benefit their new communities in many ways.
The KU initiative is just one step in trying to bolster rural Kansas communities, but it represents a refreshingly creative approach to a daunting economic challenge.