Bernardo Ramirez - Hispanic Economic Development Corp, Kansas City, MO
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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
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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
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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
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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
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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.
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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.
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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!
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2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008
Funding Sources
• Corporate– Banks– Accounting firms– Attorneys– Local small businesses
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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
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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
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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
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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
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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
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2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008
Thank you Gracias
Questions?
¿Preguntas?