Bernardo Ramirez - Hispanic Economic Development Corp, Kansas City, MO

2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008

Wealth Building for the Spanish-Speaking Microentrepreneur and Self-

Employed: The Primer Paso Curriculum

Bernardo Ramirez- Hispanic Economic Development Corp, Kansas City, MO

2008 NCLR Annual Conference, San Diego, CA – July 15, 2008

Entrepreneurial Activity in US

• In 2007, .30% of the adult population (300 out of every 100,000 adults) created a new business each month

• 495,000 new businesses were created each month in 2007

• 27.8 million businesses in US

*Information provided by Kauffman Index of Entrepreneurial Activity andAssociation for Enterprise Opportunity

2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008

Microenterprise Definition

• Five or fewer employees, often just one• Start-up costs of $35,000 or less• Generally do not meet the credit and/or

collateral requirements to access conventional financial services

• Owner often represents an under-served population

* Information provided by the Association for Enterprise Opportunity

2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008

Small Business Definition

• Depends on industry• Average of less than 500 employees or $12

million in average annual receipts• Range of employees (max) 100 – 1500• Range of receipts (max) $6 million – $28.5

million

* Source: U.S. Small Business Administration

2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008

Microenterprise Development

Microenterprise development is an income generating strategy that helps poor, low- to moderate-income, and

other disadvantaged or under-served individuals start or expand

microenterprises.

2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008

Microenterprise Client Profile

• 78% women• 62% racial or ethnic minorities• 60% low- to moderate-income• 30% below poverty line, 11% TANF

recipients• 83% HS grads, 58% some post HS

* Information compiled by Aspen Institute and AEO

2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008

Microenterprise as Part of the Economy

• 24.5 million microenterprises

• 87% of all businesses

• 31.3 million employees

• 18% of all private employment (nearly 1 in 5)

* Information compiled by AEO using data from Census Bureau and Department of Commerce

2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008

Why Microenterprise?

• Changes in the safety net that seek to require and/or support work

• The need for working parents – particularly working women – to balance their working and caregiving roles

• Growth in immigration

2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008

Why Microenterprise?

• The move to downsize major corporations by outsourcing jobs and relying more heavily on contingent and temporary workers

• The loss of well-paying, secure “middle class” jobs

• The aging of the population

* Aspen Institute

2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008

Microenterprise Works!

• Increases in median household income – 91% in a five-year study– 78% in two-year study of welfare recipients

• 36% moved out of poverty after two years, 53% after five years

• Receipt of TANF dollars declined from 94% at intake to 25% after 18 to 24 months

2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008

Microenterprise Works!

• 57% of microenterprises still in business five years after start of longitudinal study

• Average net worth grew 34%• Homeownership increased from 14% to 22%• 37% reported increased savings one year

after program services

* Compiled by AEO using studies by Aspen Institute and Ms. Foundation

2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008

Common Characteristics of the Microentrepreneur• Start part-time

• Income-patching

• Industry experience

• Little or no business experience• Business survival rates compare

favorably to other small businesses

2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008

Trends in Latino-owned Businesses• The entrepreneurial activity rate among

Latinos increased from .33% in 2006 to .40% in 2007

• Largest increase for any major ethnic or racial group

• Immigrant entrepreneurial activity rate increased from .37% in 2006 to .46% in 2007

• Native-born rate constant at .27%

*Information provided by Kauffman Index of Entrepreneurial Activity

2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008

Common Characteristics of the Latino Microentrepreneur

• Independent

• Motivated by others

• Energetic (spirit)

• Resourceful

• Observant (attentive)

• Family

2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008

Hispanic Economic Development Corporation (HEDC)

• The only CDC in Missouri engaged in the creation of economic development initiatives for the Latino community.

• Developed a continuum of services that are not only unique but also vital to the Greater Kansas City’s Latino community. 

2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008

Hispanic Economic Development Corporation - Programs

• Business Development (current and aspiring entrepreneurs)– Business Planning– Finance/Accounting – Licensing/Permits – Location/Real Estate – Marketing– Preparation for loan packaging – MBE/WBE Certification assistance– Primer Paso FastTrac

2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008

Hispanic Economic Development Corporation - Programs

• Real Estate Development and Reinvestment Program– assisting neighborhoods by developing

blighted and/or underdeveloped properties– attracting public and private resources that

will encourage real estate development

2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008

Primer Paso FastTrac

• 36-hour, 12-week business training course • Designed to introduce business concepts to

aspiring and existing entrepreneurs who have little or no business experience

• Employs an experimental “how-to” hands on approach where students complete a feasibility plan for their business concept

2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008

Course Overview

• Class 1: Introduction to Primer Paso FastTrac

• Class 2: Communicating the Business Concept

• Class 3: Gathering Information for Feasibility

• Class 4: Product and Service

• Class 5: Market Analysis - Industry and Competition

• Class 6: Market Analysis - Market Segments and Strategies

2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008

Course Overview

• Class 7: Price and Profitability - Pricing and Product/Service Cost

• Class 8: Price and Profitability - Profits

• Class 9: Price and Profitability - Cash Flow

• Class 10: Plan for Further Action - Resources for Success

• Class 11: Plan for Further Action - Next Steps

• Class 12: Feasibility Plan/Graduation

2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008

Statistics To Date

• Five courses offered (as of 2007)

• 60 participants– 33% female, 67% male– 57% KS, 43% MO

• 9 businesses started

• 15 jobs created

2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008

Lessons Learned Facilitating Primer Paso FastTrac

• Location

• Expectations

• Student-to-instructor ratio

• Strengths of the business coach and the needs of the participants

• Reputation (guest speakers)

• Stage of business – integrating current and aspiring entrepreneurs

• Explain feasibility plan incentives

• Program fee

• Evaluations of the program

2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008

Partnerships are Critical

• Microenterprise Development Organizations

• Community Development Corporation

• Educational Institutions

• Chambers of Commerce

• Social Service Organizations

• Media

2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008

Partnering Tips

• Recognize that it takes time• Figure out how a collaboration would benefit

the other party – give before you get• Meet on their territory• Determine mutual allies• Have clear, consistent goals• Model from other successful collaborations• Ask for suggestions of other potential

partners

2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008

Partnering Tips

• Emphasize the “Win-Win”• Be willing to share the praise with partners• Be willing to share results• Be willing to share resources• Be flexible• Don’t give up, be persistent

• Contracts/written agreements reduce confusion

2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008

Funding Sources

• Philanthropic donors interested in– particular under-served populations– workforce development– unique economic development strategies– offering hand-up versus hand out resulting

in a hand shake!

2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008

Funding Sources

• Corporate– Banks– Accounting firms– Attorneys– Local small businesses

2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008

Funding Sources

• Federal government– SBA Microloan, WBC’s, and PRIME– CDFI (Dept. of Treasury) – Community Development Block Grants (HUD)– Job Opportunities for Low-income Individuals

(ACF, OCS)– Office of Refugee Resettlement (ACF)– Rural Development through USDA

2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008

Funding Sources

• Regional, state, and locals governments– CDBG (entitlement and non-entitlement)– General fund revenues appropriated by

state legislatures

2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008

Funding Sources

• Partner sources– Workforce Development Boards– SBDC’s, WBC’s, Microloan Programs (SBA)– Community Development Corporations– Community Action Agencies– Economic Development Corporations– Individual Development Account Programs

2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008

Resources• ACCION USA

– www.accionusa.org• Association for Enterprise Opportunity

– www.microenterpriseworks.org• CFED

– www.cfed.org

• Ewing Marion Kauffman Foundation– www.kauffman.org

• FIELD through the Aspen Institute– www.fieldus.org

• First Step FastTrac– www.firststepfasttrac.org

2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008

Resources

• National Association for Latino Community Asset Builders– www.nalcab.org

• National Council of La Raza – www.nclr.org

• Small Business Administration (www.sba.gov) – Women’s Business Centers– Small Business Development Centers– Microloan Programs

2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008

Thank you Gracias

Questions?

¿Preguntas?