Way Off Broadway, School-Based Businesses Thrive

By Nancy Mathis — June 14, 1989 7 min read

St Pauls, NC--The Way Off Broadway Deli is just about as far off Broadway as it can get, located here across from Joe Don Danny’s Truck Stop on Interstate 95.

But the drama shaping up in this tree-lined textile town of 2,200 people is worthy of any Broadway play.

It stars four shy but plucky teenagers trying to make a go of a business they created while in high school. Will they be a success? Will they stay with their small town or head for the big city? The last act is still being drafted.

Meanwhile, the subplot of this rural drama--the spread of school-based business enterprises in the heartland--is taking on national significance, the concept’s promoters say, as small-town America struggles with an economic crisis.

‘Nowhere To Go’

The Way Off Broadway Deli is the oldest of five school-based projects initiated by North Carolinia real Enterprises, a nonprofit corporation headed by Jonathan Sher. Real stands for Rural Entrepreneurship through Action Learning.

According to Mr. Sher, many rural students now feel trapped by the economic circumstances in their communities. No longer able or willing to follow their parents into the mills, mines, or farms that once provided the economic sustenance for their areas, these young people may also lack the skills needed to enter the urban job market.

“What do you do with a generation of young people who can’t stay where they are because there are no jobs and have nowhere to go? That’s what this program is about,” said Mr. Sher. The goal of real Enterprises, which now has related organizations in Georgia and South Carolina, is for students to create their own jobs.

As a doctorial student in education at Harvard University in the 1970’s, Mr. Sher made school-based enterprises the subject of his thesis.

His idea was that rural schools themselves could serve as incubators of small businesses, providing students with both the setting for work training and the entrepreneurial skills needed to make them successful. The students would eventually purchase the business the school had helped them establish and run it themselves.

‘Real Life’ Reform

“The idea is to get the schools to a point where they can be continuous incubators of businesses,” said Richard Larson, associate director of North Carolina real Enterprises.

The program is as much about education reform as about enterprise development, he maintained, because students are dealing with real-life situations, not the simulations some similar enterprise programs offer.

Students in the real program are required to take academic courses that augment their business plan. They spend months conducting a community assessment to determine business needs, demographics, and the viability of various options.

When they decide on a venture, they must then develop a business plan outlining how they will operate it, what their costs will be, and other specifications. Courses on small-business management and entrepreneurship help them determine these and other considerations.

The capital comes from loans made by either the school district, the community, or real Enterprises. Students are overseen by an adult manager whom they hire themselves.

The goal, when they open for business, is that some or all of the student-entrepreneurs will eventually buy the company, or that the school district will offer it for sale to the community.

By stressing the fundamentals of finance, planning, and management, Mr. Larson said, the program hopes to avoid the staggering 90 percent failure rate for small businesses nationally.

Dream to Reality

In St. Pauls, the delicatessen, which celebrates its second anniversary this week, is a thriving example of the program’s best hopes. It turned its first profit this spring.

And last week, four 19-year-old St. Pauls graduates--Blake McDuffie, Robert Reynolds, Sherrie Cain, and Copernicus Harris--and the delicatessen’s manager, John Dexter, purchased the facility from the school district for $33,000.

“It gave me a great feeling of accomplishment,” said Blake McDuffie, the only co-owner who has been involved since the planning stages. ''It’s becoming a reality instead of a dream.”

The St. Pauls High School students started out three years ago with three choices for new businesses: a delicatessen, a community newspaper, or a theater, said Sara Hayes, their marketing teacher. The students themselves decided a theater would not be successful, she said, and their plans for a newspaper were scratched when one was launched by a local resident.

Superintendent Thomas A. Paquin, a former New Englander who had often spent vacations in Florida, said he liked the idea of a New York-style delicatessen that could take advantage of the interstate highway, the main artery for travelers headed from the Northeast to Florida.

Although St. Pauls is the poorest school district in the state, Mr. Paquin tapped the general fund for $30,000 to buy an abondoned pizza parlor building.

Real Enterprises, along with the Small Business and Technology Development Center at the University of North Carolina, provided technical assistance and curriculum support.

Georgia Program

Although this intensive form of entrepreneurial learning was Mr. Sher’s idea, he was not the first to make use of it. A former Georgia elementary-school principal who had read Mr. Sher’s work formed Georgia real Enterprises first.

Paul DeLargy said the idea of experiential education intrigued him most. “There are different ways of learning, and schools only use one,’' he said.

In 1980, Mr. DeLargy’s program, working with the Small Business Development Center at the University of Georgia, helped students open a day-care center and a pig farm in Quitman, Ga. Two graduates of the program later opened two more day-care centers.

The Georgia program now assists projects in six school districts, and that number will double to 12 districts in the fall.

The North Carolina program, incorporated by Mr. Sher in 1987, also helps four other districts, two with T-shirt shops, another with a boat-rental business, and the fourth with an ice cream parlor. He also is exploring with three community colleges and a four-year college the possibility of adult programs based on the same concept.

After surviving with foundation support for two years, North Carolina real Enterprises may soon be in line for state aid. A measure is pending in the legislature that would provide $500,000 a year to help pay staff salaries, support the program’s technical assistance, and form a pool of capital needed for new businesses, said Mr. Sher.

Spreading Nationally

The program also shows signs of spreading beyond its tri-state Southern base. Mr. Sher is awaiting word about additional foundation support that could help replicate it in many other states.

Inquiries about the program arrive almost daily at his office, he said. Mr. Delargy last week was presenting details of the program at a seven-state conference in the West.

“The idea is really catching on,” he said, noting that school leaders in Mississippi, Oregon, and Washington State were studying the feasibility of establishing programs.

In South Carolina, a branch of real Enterprises (the name has been copyrighted by Mr. Sher) was started last fall by the South Carolina State Development Board. It is now operating at four sites in two school districts.

Real Enterprises has been cited in a number of economic studies as one way of helping rural America recover from its economic stagnation. George Autry, president of mdc, a North Carolina economic consulting firm specializing in the South, said the economic outlook for the 1990’s for that region looks similar to that of the 1950’s.

Without job opportunities at home, he said, rural residents are fleeing to the cities--not to Northern urban centers as was the case three decades ago, but to Southern cities where the need for unskilled labor is marginal.

“What this program offers is a national model for rural areas,” Mr. Autry said. “Jonathan’s program will have an impact on urban areas even if he never sets up a program there.”

Moving Mountains

But the Broadway script of the Way Off Broadway Deli has not had an especially happy ending for some of the lead players here.

While the eatery’s student-owners are just starting life as business leaders, the school district that fostered their enterprise has itself fallen victim to the dismal surrounding economy.

The poorest district in the state, it is being merged with the Robinson County school district. As a result, Superintendent Paquin is out of a job, and the real Enterprises program has been discontinued.

The delicatessen, Mr. Paquin said, was a worthwhile venture for the district and became a source of pride to both students and community. ''It let the kids know if they worked hard and were dedicated and committed they could move mountains,” he said.

The success continues in real’s projects elsewhere. In South Carolina, students are working with a lawyer to patent the plastic bookends they invented for use in the health-care industry. A national distributor has ordered 10,000 of the bookends already, reports Vickie Propst, that program’s director.

“We have pockets in the community where students feel really lost and that they have no hope,” she said. “This program offers them a hand up, not a handout.”

A version of this article appeared in the June 14, 1989 edition of Education Week as Way Off Broadway, School-Based Businesses Thrive