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


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


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


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.


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


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


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


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


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


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


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


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


Common Characteristics of the Latino Microentrepreneur

• Independent

• Motivated by others

• Energetic (spirit)

• Resourceful

• Observant (attentive)

• Family


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.


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


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


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


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


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


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


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


Partnerships are Critical

• Microenterprise Development Organizations

• Community Development Corporation

• Educational Institutions

• Chambers of Commerce

• Social Service Organizations

• Media


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


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


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!


Funding Sources

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


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


Funding Sources

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

state legislatures


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


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

http://www.accionusa.org/

http://www.microenterpriseworks.org/

http://www.cfed.org/

http://www.kauffman.org/

http://www.fieldus.org/

http://www.firststepfasttrac.org/


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

http://www.nalcab.org/

http://www.nclr.org/

http://www.sba.gov/


Thank you Gracias

Questions?

¿Preguntas?

Documents

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