Appalachian Small Business Series: Industries of the Future

With the third installment in our series of ideas and tips for small businesses in Appalachia, we discuss the industries essential to the region's future growth.

Appalachia is, unfortunately, not well-known as the home of growth-oriented industries. People living inside the region often speak of how the economy was once stronger, typically due to a booming local extractive industry such as mining or logging. Interestingly, Appalachia's tremendous blessings of coal and timber also lead to what economists often term the "natural resource curse." This "curse" occurs in a region (or even an entire nation) where the prevalence of valuable natural resources actually deters economic diversification/long-term growth. When Appalachia's resources were in great demand, there was little incentive for communities and citizens to develop alternative employment opportunities because jobs were so plentiful. As good timber became less available and coal prices crashed, though, Appalachia's economic pillars crumbled with nothing to replace them. The more recent boom in natural gas was also short-lived as over-production crashed the market and many drillers in Appalachia underwent layoffs.

Appalachia can no longer afford to rely on boom-or-bust natural resource industries. We're not saying that communities in Appalachia should turn their backs on successful mining/logging/gas drilling businesses. Quite the opposite. Stable energy and timber companies should be encouraged to stay and grow! Forward View is not anti-coal/gas/oil/logging/etc. as long as the industry is responsible and economically viable. (For example, America still needs coal for over 30% of our electricity production and for almost all new steel.) We do, however, believe that Appalachia should diversify its economy so that communities aren't reliant upon a single cyclical industry for survival.

Our readers probably expect us to encourage leaders in Appalachia to pursue major manufacturing employers for job creation. Manufacturing, it seems, is this election season's #1 economic topic. Forward View, however, is absolutely certain that 21st century manufacturing will not be Appalachia's new economic engine. Why? It's very simple: Infrastructure.

Appalachia's transportation infrastructure was designed to deliver commodities such as coal and wood by rail to a few select locations. In a college Urban & Regional Economics course, our founder studied the highway infrastructure in Southwest Virginia. His research showed that billions of dollars would be needed in just this one corner of the state to satisfy the demands of large-scale manufacturing. Needless to say, we sincerely doubt that Appalachian communities will receive enough infrastructure investments to make manufacturers suddenly flock to the region in the foreseeable future. Forward View has an alternative solution, though, and it's perfect for small businesses.

In American Nations: A History of the Eleven Rival Regional Cultures of North America, Colin Woodard (2011) informs us that Appalachia is the most "Americanized" region of the nation. In fact, people living in Appalachia are more likely to describe their ancestry/heritage as simply "American" than anywhere else in the nation. Thus, anybody seeking a taste of Americana should begin their travels in Appalachia. The same lack of infrastructure that keeps Appalachia from developing a major manufacturing economy also ensures that the region maintains its unique culture, rural atmosphere and quiet communities. Instead of lamenting the lack of super-highways in Appalachia, communities and small businesses related to tourism should promote Appalachia as America's new tourism center. The region's lakes, rivers, mountains, farms and small towns are under-appreciated across the country. If you read almost any travel website or magazine, you realize that activities such as adventure tourism, eco-tourism and dining at farm-to-table restaurants are extremely popular. Appalachia has the natural resources necessary for all of these tourism-related opportunities, but communities need to harness them. (Farmers can provide the fresh ingredients used by local restaurants to feed the tourists who visit to shop/hike/bike/fish and explore in Appalachia.)

Our November newsletter will delve into the details of how small businesses across Appalachia can collaborate to ensure joint prosperity. We'll give special attention to strategies that business owners can implement during the upcoming holiday season. The 2016 holiday season should be the launch point for small businesses in Appalachia to make 2017 their best year ever!

Reference: Woodard, C. (2011). American Nations: A History of the Eleven Rival Regional Cultures of North America. New York, NY: Penguin Group.

August News

We'll soon have the new Dickenson County Behavioral Health Services website online. It's nearly finished, and we're excited to complete a project for another client in Appalachia. Forward View is also filling our autumn design project calendar, so now is the time to schedule your organization's website development or upgrade. We offer free quotes and look forward to hearing from you!

On the equity research side of Forward View, Forward View research analyst, Michael Williams, was cited in an article about Nike's decision to exit the golf equipment business. We're developing fresh investment recommendations and always have sporting goods industry insights you won't get anywhere else. We invite you to ask us how this chart explains the state of sporting goods retailers:

Reach out to us soon!

The Appalachian Small Business Series: Mountain Finance

In the second installment of our Appalachian Small Business Series, we discuss economics and financing opportunities in the region.

We decided to focus on the availability of capital and related economic topics early in this newsletter series because they're critical elements for revitalizing Appalachia. Access to small business financing is necessary for entrepreneurial activity, and without cash, firms can't survive long enough to implement our other ideas. With a strong financial foundation, though, companies can focus on 21st century growth strategies.

Before diving into our small business recommendations, let's take a look at the state of small business financing in Appalachia. Perhaps not surprisingly, there's limited data on this subject as more researchers focus on rural economics in developing nations than on Appalachia. Anyway, some of the only available research on our topic comes from a National Community Reinvestment Coalition (2007) report. The study offers these important points:

  1. Small and mid-sized banks in Appalachia are especially small business-friendly. Branches of large banks tend to be less devoted to small business.
  2. The most economically-distressed counties in Appalachia suffer from insufficient access to business capital, especially for companies early in their development.
  3. An overall lack of non-bank financing opportunities restrains small businesses across Appalachia.
  4. Entrepreneurs in Appalachia need additional financial guidance and training to succeed.

How should small businesses in Appalachia respond to these facts?

Just because many counties in Appalachia have limited ties to the banking sector doesn't imply that small businesses should ignore this traditional source of capital. In fact, the fewer the banks in a community, the more important it is to be well-prepared for an application for a loan. (You can't afford to fail!) It's absolutely essential to create a detailed business plan for new ventures, including realistic financial forecasts. Banks won't lend money to entrepreneurs without a clear understanding of the business. Existing firms seeking additional financing will need revenue, profit and cash flow predictions, too. The SBA and SCORE are two sources of guidance for business plans and small business forecasting. Contact them for free advice! Forward View, of course, can also create the financial analyses required for loans and other forms of start-up financing.

One new source of business financing that's underappreciated in Appalachia is crowd-funding. No, we're not talking about some type of charity fundraiser; we're talking about a 21st century alternative to banks, private equity and venture capital firms. EquityNet, Crowdfunder and MicroVentures are just a few of the companies that help connect entrepreneurs directly to investors. Crowd-funding bypasses lending institutions and serves as a new route for businesses in Appalachia (and elsewhere) to receive capital from across the nation. We believe that crowd-funding can absolutely help to bridge Appalachia's financing gap.

In the next issue of this newsletter series, we'll discuss industry and tourism in Appalachia and its relationship to small business. We look forward to presenting our research and ideas. Stay tuned!

Reference: National Community Reinvestment Coalition. (2007). Access to Capital and Credit For Small Businesses in Appalachia. Retrieved from the Appalachian Regional Commission: 
http://www.arc.gov/assets/research_reports/AccesstoCapitalandCreditforSmallBusinessesinAppalachia3.pdf

Appalachian Small Business Series

This post from our newsletter kicks off our six-part series focusing on ideas and tips specifically designed for small businesses in Appalachia.


Here at Forward View, we consider ourselves to be problem-solvers. As a small business based in the Appalachian town of Clintwood, Virginia, we're very familiar with the local commercial environment: Overall, it's difficult to succeed as a small business in Appalachia. Although some areas of the region are much more economically developed than others, it's certainly true that Appalachia isn't a center of 21st century entrepreneurship. We'd like to change that.

In order to start a conversation about small business success in Appalachia, we're sending this newsletter to Chambers of Commerce in as many of the economically distressed counties as possible, in addition to the at-risk counties in Virginia. (For the record, some Chambers of Commerce don't have a website or email address. They're digitally invisible. This lack of an online presence is terrible! Please contact your Chamber if they don't have a website.)

This newsletter series will focus on these topics:

  • Economic challenges and capital access (September)
  • Tourism, industry and agriculture (October)
  • Business community collaboration and events (November)
  • Limited digital usage in Appalachia (December)
  • Reputation management (January)

We welcome questions or suggestions for specific needs that Forward View should address in this series. Unlike typical, and stereotypical, articles about Appalachia, we'll be offering solutions for the challenges in our communities. Our solutions, however, will not be centered on government or politics. We'll be speaking directly to small businesses across the region. We look forward to your feedback!

July News

Forward View enjoyed a truly exciting July. First of all, we completed the Ralph Stanley Museum website! (Click here to see it.) We believe that it's one of our finest website designs, and we thoroughly enjoyed the entire museum project. We've already begun our next website development job, too.

Our founder was quoted in a U.S. News & World Report article on analyzing corporate earnings reports. (Click here to read.) He was also interviewed by Harvest about Forward View's research methodology and our coverage universe. (Click here for the interview.)

In July, Forward View research analyst Michael Williams initiated formal coverage of Callaway Golf (ELY). Our Director of Research, Nathan Yates, and Forward View research analyst David Wilson initiated formal coverage of West Marine (WMAR), too. As our Sporting Goods Monitor research service continues to expand, we invite you to review these free research samples: Cabela's 2Q Earnings AnalysisMarineMax Fiscal 3Q Earnings AnalysisWest Marine 2Q Earnings Analysis. Please contact us to start your free trial of our equity research service.

June Update

Forward View enjoyed a June filled with opportunities to continue our growth. We also received recognition of our efforts to create a pleasantly different type of consulting and research firm. On June 27th, Forward View won the Dickenson County Chamber of Commerce's New Business Award for 2016. (Businesses open for less than three years were eligible.) We are truly pleased to have been so honored by our fellow Chamber members. The entire Forward View team has worked tirelessly to offer quality consulting and research services, and we believe that our best days are still ahead of us. As a matter of fact, the Chamber award has already increased interest in our business. We look forward to enlarging the Forward View clientele.

The Ralph Stanley Museum website project is nearly finished, so look for an announcement of the site's public availability soon. (Follow us on social media for the latest updates!) Sign up today to our Sporting Goods Monitor research service receive immediate access to our fresh analyses and trading recommendations. We'll soon be publishing a Callaway Golf initiation report exclusively for our clients that you won't want to miss.

May News

May was an exciting month for Forward View with three new stocks added to our coverage list: Sportsman's Warehouse, Hibbett Sports and MarineMax. The initiation reports are available exclusively through StockViews. (Please contact us if you're interested in a StockViews research service trial.) In June, our coverage list will be expanding again with the addition of Callaway Golf. This special coverage will be provided by new Forward View research analyst Michael Williams. He's a golf industry expert with experience in auditing, planning and business analysis. Forward View will be pleased to share Michael's financial modeling, forecasts and field research with our institutional clientele.

Michael earned a Bachelor's degree in Economics and Finance from Southern New Hampshire University, where he graduated with multiple honors and is now a Master's in Finance candidate. He has also completed additional studies in Econophysics and speaks conversational German. Michael is a great addition to the research team!

Forward View was also in the news once again in May. Our mutual fund research was cited by U.S. News & World Report in this article. The Springfield News-Leaderalso discussed our analysis of the potential for a Bass Pro and Cabela's combination in this article.

On the design and consulting side of Forward View, we continue to develop the Ralph Stanley Museum website, and we've also been busy with website updates and marketing projects. We're especially happy that multiple clients decided to deepen relationships with us and request additional services. Each opportunity is most appreciated!

Have a great June!