By Roger Van Scyoc Centre Daily Times (State College, Pa.)
WWR Article Summary (tl;dr) Instead of going for her MBA, Eliza Martin decided to participate in The Goldman Sachs 10,000 Small Businesses program. The program, which is free for those who are accepted, attracts a wide array of businesses, including restaurants, candy makers and clothing shops.
Centre Daily Times (State College, Pa.)
When Eliza Walton bought Martin's Feed and Fertilizer, her father's Coburn feed mill, four years ago, she was doing a bit of everything. She helped make the animal feed and delivered it across the county. When a salesperson left, she took over, meeting with customers on the road. Wearing the janitor's hat was not beneath her.
She felt like a student all over again. Being in the thick of daily tasks was a learning experience, but for the young business owner, it kept her from thinking bigger.
"Between delivering or doing sales, what I want to be doing is working in the office and growing the business," Walton, 31, said.
It's been a decade since she's had homework. But Walton, who graduated from Penn State in 2007, decided last year to go back to school.
Yet the program was not an MBA or a typical graduate degree, commitments that tend to be expensive, take years to complete and often require individuals to leave their jobs.
"Most MBA programs are not focused on growing a small business," said Patti Greene, the chair of entrepreneurial studies at Babson College. "Most small business owners don't care about theory, they just want to know what's going to work."
Through the Penn State Small Business Development Center, one of 18 university-based centers across Pennsylvania, Walton learned of the Goldman Sachs 10,000 Small Businesses program and decided to apply for the spring cohort beginning in February. About 7,700 business owners have graduated from the program since being founded in 2010.
Goldman Sachs reported more than 68 percent of alumni increased their revenue at six months, compared to 45 percent of U.S. small businesses that grew revenue in 2015. At 30 months, about eight out of 10 graduates had increased revenue.
Walton, whose program wraps up at the end of April, works within a 153-member cohort, which includes other small business owners from around the U.S. From there, the cohort is broken down into smaller sections and groups where peer learning and one-on-one consulting with a dedicated business adviser happens.
"I did an ag business minor, so we did some stuff," Walton said. "But you use it or lose it."
The program, which is free for those who are accepted, is nationwide, and attracts a wide array of businesses, including restaurants, candy makers and clothing shops, among others.
Walton's business for instance, is one of the only agriculture-related companies in her cohort. While most of the learning takes place virtually during the three-month program, Walton's class reconvenes twice in Boston for a weeklong session of networking and collaborating on the business.
"There's somebody in that room who is a model," Greene said.
The smaller groups are further broken down as each student is paired with another. Walton's partner, who hails from Puerto Rico, owns a laundry business. She said she's gotten advice from accountants in the class, while others looking to branch into to the digital space have sought guidance from the technology companies in the room.
"All the pains as a business owner that I have, you're in a group of people who also have those pains," she said. "You feel validated that you're not the only person who struggles with this stuff."
During the recession, the nation's rate of new business creation declined by more than 30 percent, according to the Kauffman Foundation, with the number of startups hitting its lowest point in more than 30 years in 2010.
Greene, the program's founding national academic director, said Goldman Sachs created the initiative to respond to the financial hardship felt around the country.
"You think about 2010, times were still pretty rough then, so it was a program where entrepreneurship meets economic development," said Greene, who now serves as the global director of Goldman Sachs' 10,000 Women program, a similar initiative focused on female entrepreneurs. "The intent was grow businesses, create jobs."
On that front, Goldman Sachs says, the initiative has succeeded. According to program data, about half of graduates created jobs at six months. That number rose to more than 60 percent at 30 months.
More than 80,000 people are employed by its alumni, the program reported.
But despite its success, the initiative also coincides with Goldman Sachs' management of mortgage-backed securities leading up to the financial crisis, resulting in the loss of billions for investors and a contributing factor in the following recession.
In April 2016, the investment banking giant agreed to pay more than $5 billion related to its selling of mortgage-backed securities between 2005 and 2007, the Department of Justice announced.
The resolution required Goldman Sachs to pay more than $2.3 billion in civil penalty under the Financial Institutions Reform, Recovery and Enforcement Act and pay $1.8 billion in relief to "underwater homeowners, distressed borrowers and affected communities," through loan forgiveness programs and financing for affordable housing.
To repair that image, and Goldman says, the country's financial outlook, the 10,000 Small Businesses Program has given business owners like Walton a more focused version of a traditional form of study.
"This is geared toward the actual business you're involved in," said Michael Ryan, the Penn State SBDC business analyst who works with Walton and two other clients in the program.
"When you're pursuing an MBA or any type of educational program, it's based on case studies -- usually the students who are working on those case studies really don't have any skin in the game at that business.
"So for Eliza, her business is her life," he continued. "Her case study is her real business."
Before it became Martin's Feed and Fertilizer, the mill was the oldest operating feed mill in Centre County. David Walton, Eliza's father, bought the mill from founders Ed and Mary Martin in 2008, and went on to run it for the next five years.
When Eliza took over, it was a lot to digest for the then twentysomething entrepreneur. But she learned, as she always has, on the job.
"It's real life for her," Ryan said.
The mill is a dealer for big names such as Purina, and Walton still makes her rounds on the delivery route. But after Friday when she returns from Boston and the program concludes, she said she hopes to take her newfound knowledge from the micro to the macro. From the program, she's learned about pursuing government contracts, issues related to human resources and strategies for hiring and retaining good workers.
She's already put the knowledge to use: Martin's Feed and Fertilizer is hiring.
Her second graduation, Walton said, has been just as important as her first.
"When I first graduated, I was like 'I'm done,' " she said, laughing. "So it has been 10 years since I had to do a lot of homework."