Building the Foundation for a Long-Standing Small Business Ecosystem
The struggles and setbacks of 2020 forced Colorado to acknowledge that there were long-standing gaps in the small business economy. Knowing that 95% of jobs in Colorado lie within the small business ecosystem (fewer than 25 employees) we, at Energize Colorado, saw a need to address gaps so small businesses would be more resilient to future economic setbacks. These crises triggered by the pandemic, anchored by a strong desire to get a comprehensive baseline of insights to inform capital and technical assistance programs as well as small business policy, inspired our Small Business Resiliency Index (SBRI).
What is resiliency?
The term “resiliency” is commonly used to describe life after the COVID-19 pandemic. It’s become overused and has taken on a variety of meanings.
Our theory is that resilient businesses will survive economic instability. This will then result in more agile businesses that are able to structure new business models supported by multiple revenue streams that attract and retain talent resulting in more vibrant communities across the state. However, to help companies to become more resilient, we needed to define the vectors of resiliency that are unique to small businesses and then build a baseline of metrics.
In 2021, a group of Energize Colorado’s most seasoned volunteers from a range of backgrounds – culture and innovation thought leaders, public health experts, data scientists, academic researchers, business growth consultants, policy makers, technology founders, an economist and a communications consultant – sourced and reviewed literature to support the unique vectors that made up the index, structured questions to support the research and then assessed small businesses’ social and operational performance. They conducted a detailed analysis of the data which resulted in a culturally appropriate and statistically valid index rich in relevant insights to inform programs and policy.
Meet the Team of Experts
Brooks Johnson has been a volunteer with Energize Colorado and the SBRI team since January 2021. Brooks was part of the original volunteer team that developed the hypothesis for the project including the initial research to support the vectors for small business resilience. Previously, Brooks was a business founder, and has held a variety of positions in corporate management, finance, and strategy consulting.
Brian Lewandowski is the Executive Director of the Business Research Division at the Leeds School of Business, University of Colorado Boulder. Brian provides regional business and economic information and education, including economic and revenue forecasts, policy studies, economic impact analyses, and data workshops. Brian was crucial in the foundational research required to align the structure of the index with the research.
Cody Butt is the global leader of McKinsey’s marketing efficiency for growth capability, which includes the firm’s agency search capability. Cody’s knowledge provided expert guidance based on prior North American and European business resiliency research.
Alex Damianou is co-founder & CEO of OpenAxis (Techstars ’21), a data sharing and visualization platform. A political economist with experience at the United Nations and in emerging markets, he previously served as the National Policy Director for Andrew Yang’s 2020 Presidential campaign. Alex helped Energize Colorado use OpenAxis to present the charts and datasets in the SBRI Report in an accessible, transparent, and easily shareable manner here.
Patrick Russo is co-founder & CTO of OpenAxis (Techstars ’21), a data sharing and visualization platform. He is a data scientist and engineer with experience at the Federal Reserve Bank of New York and Via Transportation. Patrick helped Energize Colorado use OpenAxis to present the charts and datasets in the SBRI Report in an accessible, transparent, and easily shareable manner here.
Steven Gotlieb is a communications expert with a long resume of experience. He is the founder of Gottlieb Group Communications, LLC. The firm helps executives think through business opportunities and challenges through the lens of reputation. Steven helped create the inaugural small business index and the communication strategies for the project.
Arnobio Morelix is a California-based data scientist working at the intersection of technology, economics, and policy. Currently he is co-founder and CIO of Sirius Education. On the SBRI project, he led the initial workshops to structure the actual questions for the survey. As we iterated the survey, he provided valuable oversight to ensure we had good alignment with the research.
The Resulting Index
The survey was sent to approximately 14,000 small business owners from Energize Colorado’s database to understand the current state and potential predictors of small business resilience. Powered by data-driven insights, the team condensed the survey results into an index to provide actionable guidance, resources, and programs to drive change identified by small business owners.
Following the development of the index, approximately 750 survey respondents received their unique resiliency score of average, below average, or above average. Businesses were then provided with opportunities to access advisors and resources to maintain or improve their scores.
Energize Colorado is currently leveraging the SBRI to support both the small business community and a number of State Partners. Using the report, we can communicate the needs of the small business community to State leaders and demonstrate the State’s commitment to business and workforce diversity by tailoring their technical assistance and capital programs tailored to the specific businesses based on demographics, size, industry, growth rates, etc.
Over the next several weeks, we will publish a series of articles that outline the parts of the SBRI and what indicators were used to calculate resilient scores. We will also meet more of the expert volunteers who brought it to life and the businesses that benefited from the project.