Hannah Elliott is one of the faces of a streamlined and updated Iowa Targeted Small Business Program operated by the Iowa Economic Development Authority.

Last year, Elliott and her family opened Lola’s Fine Kitchen in the growing Prairie Trail district in Ankeny. 

She benefited from a sleeker, modernized program with better networking, a more powerful website and new resources for certain businesses owned by women and minorities, service-disabled veterans and others with disabilities. The state certifies the owners, which brings special benefits in bidding and networking. 

“We applied through the processes that had been streamlined,” Elliott said. “We got to participate in all the new things they’ve rolled out and saw the benefits of that and all of the networking.” 

She discovered the program through her brother, Taufeek Shah, who runs Lola’s Fine Hot Sauce out of West Des Moines and joined the program for a couple of years. He’s used the networking to find private businesses that are looking for diverse suppliers.

Elliott has welcomed the marketing the program has allowed. “You get to market yourself as a targeted business, which for a restaurant I think is really helpful,” she said. “I think a lot of people are interested in supporting that. We also are a zero-waste kitchen. People look for those things nowadays. They want to support women, they want to support local, they want to support minority-owned. This puts a stamp on us and they can be confident that the money is going back into the community and into our family and to help us get better. They even give you a business coach.” 

She got a 10% discount on booth space and a prime spot at one festival in part because of her certification with the state, Elliott noted.  

Elliott, who grew up in Waterloo, is exploring loan options in addition to the networking and marketing status the state program provides. The 16-employee restaurant serves noodle bowls and other cuisine with Filipino and Pakistani influences. Her father’s family is from Pakistan and her mother’s is from the Philippines. “Lola” means grandmother, Elliott points out, but the restaurant is named for her mother and grandmothers. “Mom is a grandma now, so we just call her ‘Lola.’ ”

Elliott, a graphic design graduate of the University of Iowa, worked in inside sales after school. She’s been a hairdresser for 15 years, and ran her own business for the last 11. 

“I’m not a trained chef. So this has been a big learning curve for me,” she said. “But I’ve learned a lot, and I’m excited about learning more. And I think we’re on the right track and seem to get good reviews on our food.”

Jill Lippincott, who runs the state’s Targeted Small Business Program, said the effort goes back to 1986. 

“The intention was to help support the growth and development of what we call targeted small businesses,” said Lippincott, who works for the Iowa Economic Development Authority. “The businesses that fit into the four categories are women-owned, minority-owned, owned by individuals with disabilities, or service-disabled veterans.”

Lippincott’s job is to certify that the applicants fit one of those categories and own and actively manage at least 51 percent of the business.

It doesn’t have to be one applicant. “We could have three women who own 51 percent of their business, along with maybe two other relatives,” for example, Lippincott said.  

Companies applying for certification must be headquartered in Iowa, be for-profit firms, and make less than $4 million on average over the most recent three years. Applicants renew their certifications every two years. 

“The program was started with the intention of benefiting small businesses, mostly when they did state procurement,” Lippincott said. “The state buys all sorts of goods and services. The program was established to say, ‘We’re going to give you some benefits when you’re going to do work with us at the state. The first thing is, we’re going to give you two days’ heads-up notice of any state bidding opportunities to have a little extra time to be aware of what’s out there.’

“A lot of the small-business owners don’t have a sales department necessarily working to put together a bid proposal for a bid opportunity,” Lippincott said. 
There are additional benefits.

“There are some direct purchasing benefits,” Lippincott said. “Typically, if there’s a purchase that the state wants to make — say they need pencils — they can make that purchase for anything under $5,000 from any vendor. If they want to purchase from a targeted small business, that goes up to $10,000. And that’s without a formal bidding process. That makes state purchasing managers’ jobs easier, too,” she said. 

“The other thing that we offer is bond waivers to targeted small businesses for state projects under $50,000,” Lippincott said. Over the years, diverse owners had trouble getting capital or becoming bonded. The waiver allows them to get some experience with the state and clear the way for bonding. 

Another major program involves loans through the Iowa Center for Economic Success, which manages the portfolio under contract. Loans are for up to $50,000 for established businesses, $30,000 for startups. 

IEDA has managed the program for three years. Before that, the Iowa Department of Inspections and Appeals handled certifications. Those two departments and the 

Department of Administrative Services shifted the program to make it easier to access.

“They all got together and said, ‘We want to make this program better,’” Lippincott said. That led to a meeting in May 2016 on Lippincott’s first day on the job. In 

September 2016, IEDA took over informally, and then permanently on July 15 under new legislation.  

In January 2017, IEDA ran a series of eight listening sessions around the state. That and the in-house improvement discussions led to changes. 

“One of the first things we did was streamline the application. I would say before, it looked like a tax form. That’s what I equate it to, and it didn’t feel inclusive,” Lippincott said. 

Another change: Applicants no longer had to be certified to get a loan, since often the loan was needed to get the business to the stage where it would seek state contracts in the first place. That allowed the state staff to focus on other, nonfinancial credentials of the business first. The loans began with a state appropriation and have a repayment rate in the range of 97 percent. 

The time it took to get certified for the program fell from just over a month down to seven to 10 days.

On to the website, which hadn’t been updated since 2007. There was a directory of businesses, “but the algorithm was bad, it was just difficult,” Lippincott said. Businesses could check for bidding opportunities every day on the website, but they wanted push notifications.

In May 2018, the program launched a new online portal. That meant a new online application, a new directory and a place to create a profile. It’s all secure. And yes, there’s a place to sign up for notifications about bidding opportunities.

Then there was the fee to apply. Lippincott and her team ditched the $25 charge, figuring it wasn’t worth the time it took to process and was another barrier small businesses didn’t need. 

Lippincott said the state created a quarterly newsletter to help program participants network.

Kathy Evert, owner of Signarama Ankeny, a sign company, found the program helpful in marketing and in sizing up business opportunities. “They are very good at reminding us about opportunities,” Evert said. “And there are great networking opportunities,” although she added she doesn’t attend many events. 

The program has led to contacts about bidding opportunities for Evert’s firm, which designs, produces and install signs, and provides service and repair. She has seven employees. 

“For most business owners, it’s how you prioritize time and divide” the work, Evert said. The state’s online resources help, she added. “It’s a great service.” n