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SMALL BUSINESS

Economic Development Center Specializes in Funds, Training, Advice

January 28, 1998|MARTHA GROVES | TIMES STAFF WRITER

John J. Rooney is president of Valley Economic Development Center Inc. in Van Nuys. Founded in 1978, the organization provides consulting, training and financing to small businesses. Last year, it won a Commerce Department award as the best economic-development lending program in the Western United States.

Q: What services do you offer?

A: We are a full-service, small-business development center, so we offer every type of service a small-business owner would need to grow a business. That includes professional management consulting, business financing, chief executive and employee training and other specialized services.

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Q: How does your organization differ from other management consulting services?

A: We're a nonprofit, focusing strictly on small businesses with fewer than 500 employees. We are a one-stop center, offering everything from help [with] securing permits to financing to strategic planning retreats for CEOs.

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Q: How many companies have you helped over the years?

A: In 1994--the year of the Northridge earthquake, our major challenge--we helped about 10,000 companies. Since then, we've [worked with] about 7,000 companies a year on average. I think we're the largest provider of small-business assistance in California.

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Q: Give an example of a success story.

A: We had a client--Pegnato & Pegnato Roof Management in Marina del Rey--that came to us about four years ago. It was a new company with five employees. Bill and Maryella Pegnato, the husband-and-wife team, went through our entrepreneurial training program, a 10-week, business strategy boot camp. We helped them analyze their market segments, and we showed them how to do focus groups. They found out that their large retail customers hated roofers because they always tried to sell them a new roof. [These customers wanted] a service that was on their side and would help prevent them from getting ripped off. The light went on. [The Pegnato firm does no re-roofing, just repairs to get as much life out of the existing roof as possible.] Over the next three years, the company expanded nationwide.

The next step was that they needed regular guidance on how to grow the company. Bill became part of our Breakthrough program [made up of] 12 CEOs who meet once a month. He would run problems by this "board of directors." Breakthrough, which costs a nominal monthly fee, is a new concept in consulting: group consulting, with a dozen companies splitting the bill. On average, companies in the Breakthrough program boost profits by about 40%. The Pegnatos' company now has 100 employees, half in California and half in other major metropolitan areas. Last October it made Inc. magazine's list of the 500 fastest-growing companies.

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Q: What market area do you cover?

A: Mostly Los Angeles and Ventura counties. We have 11 offices ranging from Huntington Park to Santa Barbara. Our biggest offices are the Gold Coast Small Business Development Center in Ventura, the Valley Business Assistance Center at the main Van Nuys office, the Pacoima Business Assistance Center and the Huntington Park Business Assistance Center. We have field offices in other communities, including Palmdale, Burbank, downtown Los Angeles and San Fernando.

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Q: Who subsidizes the center?

A: We have different funding sources, including the city of Los Angeles and other communities, the state of California, the U.S. Department of Commerce and the U.S. Small Business Administration, plus some private contracts with corporations to do special work.

The largest funding source is the Commerce Department, which provides $6 million for lending (through the Los Angeles Business Development Corp., our lending arm). We've just been awarded by the U.S. Small Business Administration the contract for micro-lending for L.A. and Ventura counties. We acquired the loan portfolio for Coalition for Women's Economic Development and are managing that at the SBA's request. Also through the SBA, we're designated as the intermediary for a pre-qualification program for minority and female business owners.

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Q: What must a company be or do to qualify for a loan?

A: We have multiple loan programs with different qualifications. Generally, we will lend to what we call "near-bankable" businesses. They might need help getting their package together or be a bit too young or not profitable for long enough. They should have some collateral. They should show an ability through historical earnings to repay the loan and should have reasonably good credit. Some programs, such as the new micro-lending and minority and women "pre-qual," will lend to start-ups.

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Q: What is the Hollywood Economic Alliance?

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