Scale Up Milwaukee, Aided by $350K From WEDC, Aims to Prove Itself

3/12/14Follow @XconomyWI

State officials are pouring a lot more cash into Scale Up Milwaukee, the entrepreneurship program that tests a college professor’s theories by helping existing businesses push for more rapid growth.

For its second year, Scale Up is getting $350,000 from the Wisconsin Economic Development Corp., officials told Xconomy. That represents a big increase in support from the state’s lead economic development agency, which contributed just $50,000 in Scale Up’s first year.

Scale Up is also getting a second grant from American Express Open, said Brian Schupper, policy director for the Greater Milwaukee Committee, the local nonprofit organization overseeing Scale Up. The size of the American Express donation has not been disclosed publicly.

It’s far too early to tell whether Scale Up will be successful in meeting its goals, which range from specific to abstract: by 2020, helping to spur 60 “scale-ups”—businesses that consistently increase sales an average of 20 percent annually—and changing the local culture to create a “self-sustaining environment that embraces regional entrepreneurship.”

WEDC CEO Reed Hall said the first year of Scale Up showed plenty of promise—hence the new round of cash. “I think there’s some real jobs that can be created by this,” he said. “That’s why we’re willing to invest.”

There are critics, too. While the current era of American business seems enthralled with the promise of fast-growing technology startups that sprout from dorm rooms and weekend hackathons, Scale Up is taking a decidedly old-school approach to growing the local entrepreneurship scene.

Note that we’re talking about “scale up,” not “startup.” Part of Scale Up’s mission is to broaden the local concept of entrepreneurship to include later-stage businesses, particularly companies that have a proven business model and a clear market, but need an extra push to reach the next level and grow rapidly.

For example, the two-month “Scalerator” program of mini-MBA courses focuses on companies with annual sales between $500,000 and $10 million, regardless of their industry or age. Pilot participants included a 14-year-old branding and social media consulting firm, a 24-year-old contract screen printing and embroidered clothing producer, and a more than 60-year-old headcheese and sausage manufacturer.

The 12 participating businesses from Scale Up’s first year are projecting, on average, an additional 25 percent sales growth this year thanks to the program, Schupper said. That’s easier said than done, of course, but Scalerator has led business owners like Visual Impressions’ Todd Richheimer to think differently about how his company generates sales and to form a more aggressive plan to achieve revenue goals.

“It’s more the mindset that Scale Up gives us,” Richheimer said. “Our eye is on growth, versus the day-to-day business and watching the dollars come in.”

This year, Scale Up aims to hold a second, more intense Scalerator program with a new crop of companies, form a mentorship program, create a website with resources for entrepreneurs, and host more workshops.

Scale Up’s focus definitely runs counter to … Next Page »

Jeff Engel is the editor of Xconomy Wisconsin. Email: jengel@xconomy.com Follow @XconomyWI

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