When I was the executive director of the Southwestern Illinois Development Authority back in the 1990s, we created a fund that was devoted to the economic development of East St. Louis. The fund would generate millions of dollars over a couple of decades so we were taking a long-term, strategic view on its investment.
Al OrtbalsOrtbals    We decided that a good first step would be to create a strategic development plan that would lay out a strategy for development and a game plan to accomplish it. Obviously, it was important that city government be involved in creating this plan. In fact, we intended to work with the city to select a professional planner and pay the bill but play a minor role in the planning process.
    We set a meeting to inform the mayor of this fund and our desire to have a blueprint created to help guide our investments. He bought in enthusiastically and we decided to meet again to continue the discussion.
    When we arrived for that second meeting we received a bit of a surprise. The mayor had invited a couple of individuals who he introduced to us as urban planners. When you work in economic development as I had for a long time at that point, you’re familiar with the firms and individuals who provide these services. I had never heard of either them or their company but we decided to play along. We agreed that they would return to the next meeting with a proposal that would include the firm’s and individual’s qualifications, an outline of their approach and their proposed fee.
    As suspected, that proposal revealed that these urban planners had very little knowledge or experience in the field. No surprise there. But we were shocked when we saw the fee — nearly a half million dollars. This figure was stunning on two fronts. One, that was nearly ten times what would have been a customary charge for such a service. Two, despite the fact that we had never revealed to the mayor how much money we had in the fund, the proposed fee came to nearly that exact amount. Somehow they had found out how much we had in our pockets and their goal was simply to turn our pockets inside out. Some well-connected political pals had been called to the trough for feeding.
    I was reminded of this episode recently when I read that $500,000 was to be spent to plan a heretofore unimagined, unmentioned new Amtrak station in East St. Louis. I found this curious for several reasons.
    The St. Louis to Chicago high speed rail line kicked off with a $1.2 billion grant in January 2010 and construction began that September. For three years the city of Alton has been diligently working through the process of planning a new Amtrak station — investing in preliminary engineering, site analysis, site planning and pulling together $17 million in development funds from various sources including federal grants that don’t just drop out of the sky.
    Now, four years later, St. Clair County decides, “Hey, why don’t we do a station, too?” It tends to make one think that this is a frivolous proposal.
    There’s also the fact that the planned terminus of the line, the St. Louis multi-modal station near 14th St. and Clark in Downtown St. Louis is just three miles away. How, exactly, do they intend to justify the expenditure of $15 million to $20 million on a new station when one already exists five minutes away?     
    And then there is the amount — a nice round $500,000. It’s way too much to conduct a preliminary site analysis and create a preliminary site plan — assuming you were hiring a reputable engineering firm. But, it’s not nearly enough to do the engineering necessary to create construction documents.
    Since there have been no reports of who is being hired to do what for how much over what time frame to deliver what when, I thought I would look into it. Unfortunately, the only people I was able to reach were as much in the dark as I was and those who know what’s going on aren’t willing to talk about it.
    All of which takes me back to those East St. Louis meetings years ago. Is this just an ill-conceived and poorly prepared proposal or is it a game that’s being played to funnel funds to some well-connected politicians’ pals? I guess only time will tell because no one else will.
    Alan J. Ortbals is president and publisher of the Illinois Business Journal.

When you want to make it big, why not think smaller? I’ve asked myself that many times through the years, watching fledgling businessmen struggle with their strategy.
Dennis GrubaughGrubaugh    Many of them closed their doors all too quickly because they failed to realize what they were getting into. They didn’t know their market. Or didn’t understand finances. Or didn’t understand the regulation that goes along with running a business. They weren’t taking the plodding baby steps that are sometimes necessary to stay on track.
    In other words, they didn’t have a plan. They were in love with the idea of running their own business, but not as in love with the hard work — read that, homework — that goes into overcoming the obstacles.
    Apparently other people are thinking as I am, because there is a growing movement in this country to give small businesses a boost through incubation.
    When I was a kid, incubation is what chicks went through in a hatchery. They still do for that matter, but in modern times the term is applied more than ever to a creative way to start business.
    In this month’s issue we have two stories about local business incubation efforts. One is under way in Belleville; the other in Alton. Neither is far enough along to know whether either will succeed, but certainly a lot of time has been spent on both projects. And as every farmer knows, time is essential to a good harvest. But then, so are land, seeds, weather and work. And luck.
    Certainly this is not the first time incubation has been applied to southern Illinois, but the wave of interest is so strong right now there is a newness about it. I’ve been watching with awe some of the organized startup efforts under way on the St. Louis side of the river and it appears to me that the trend is rubbing off on the east side.
     Area colleges have been at this for a while, of course, but more than ever they are being proactive. SIUE’s University Park and Metro East Small Business Development Center, for instance, were recent sponsors of the Metro East Startup Challenge, which awarded $10,000 to one new business, and $5,000 to a second, following a three-month competition. Combine those prizes with the wealth of resources offered through the university’s business network (like SCORE, for example) and two lucky entrepreneurs have a real head start.
    Then, there is Kaskaskia College, which offers incubator space and support services at its education center in Trenton. Kaskaskia is specifically targeting businesses that have a better chance of succeeding in today’s economy — sales, marketing, health care, energy and Internet firms among them. In short, the school’s got one of the best business-assist programs in our region.
     One common factor among most of the incubators is the requirement that participants be screened. Only serious folk need apply, is the unstated mandate, and I like that. People who are serious enough to help a startup need to know that the man or woman behind the startup is serious, too.
    Such scrutiny works. While SIUE had 100 people initially inquire about the Startup Challenge, only 30 turned in business plans for consideration. That sadly reminds me of the business failure rate in America.
    Every day in the U.S., more than 15,000 people start a business. Up to 70 percent of those businesses will close within 18 months,  according to StartupPoint, an Atlanta-based company whose mission is to help communities increase the success rate of their new businesses.
    Sometimes the difference between success and failure is finding the right resources in the beginning. Those entities mentioned here are but a few of the many places where local entrepreneurs should turn before they ever consider hanging a sign.
    Dennis Grubaugh is editor and partner of the Illinois Business Journal. He may be reached at This email address is being protected from spambots. You need JavaScript enabled to view it. or (618) 977-6865.

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