Entrepreneurship and small business as a means to self sufficiency
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Entrepreneurship and Small Business as a Means to Self-Sufficiency. Presented by: Donna R. Rockin, Director Illinois SBDC/Duman Microenterprise Center/JVS Chicago. Program Name. Small Business Development or Expansion

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Entrepreneurship and Small Business as a Means to Self-Sufficiency

Presented by:

Donna R. Rockin, Director

Illinois SBDC/Duman Microenterprise Center/JVS Chicago


Program Name

  • Small Business Development or Expansion

  • Center Name: Illinois Small Business Development Center at the Duman Microenterprise Center


Who are we?

  • The Duman Center was made possible through the generous gift from Louis Duman to the Centennial Campaign of the Jewish Federation for the JVS Endowment Foundation and a grant from the Illinois Department of Commerce and Economic Opportunity.

  • JVS is a 501 (c) (3) nonprofit organization, whose mission is to provide a wide range of employment and educational training services and career counseling that “empower all people in need to find fulfillment through work.”

  • The Illinois Small Business Development Center(SBDC) at the Duman Microenterprise Center provides one-on-one counseling at no charge for start-ups and pre-existing small businesses in the Chicago metropolitan area.


Who are we?

  • The Duman Center’s programs also provide, on a limited basis, start-up and expansion capital for area entrepreneurs via zero and low-interest small business loans. In 2007, the Duman Center began helping clients access and receive larger SBA-backed business loans as well.

  • The center offers entrepreneurial training, business assistance, mentoring, and access to capital. The center has been helping small business owners since 2001.

  • The Center partners with local banks, government agencies, business professionals, business schools, organizations, and the Jewish Federation of Metropolitan Chicago.


How many comprise the staff?

  • 2.67 full time equivalents (FTE’s)

  • 15 person volunteer Loan Approval Committee

  • Volunteers and mentors


Who are our clients?

  • Refugees and asylees

  • Immigrants

  • Divorced men and women, generally with children

  • Widows, widowers, generally with children

  • Veterans (make up about 9% of our clients)

  • Young adults: recent high school and college graduates with little or no assets

  • Over 41% are African American, nearly 54% are white, about 3% are Asian, and nearly 2% are Hispanic

  • Nearly 59% are men and 41% are women


How do we market ourselves?

  • Constant Contact e-News Bulletins

  • CAN-TV (Community Access Network TV)

  • Craig’s List

  • JVS Offices and all JVS Counselors

  • Libraries

  • Chambers of Commerce

  • Economic Development Centers

  • Banks

  • Other Small Business Development Centers

  • Word of mouth

  • Recognition from local media outlets


Who are our funding sources?

  • Private funders

  • Corporate foundations

  • Federal grants

  • State grants


What outcome measurements are built into the program?

Economic Impact

Survey – measures improvement in financial stability

  • Jobs Created

  • Jobs Retained

  • Access to Capital

  • Change in profits

  • Change is sales


What outcome measurements are built into the program?

Amount of capital obtained

Default rate -remarkably low given the un-bankability of the clients.

  • Combined overall access to over $700,000 in private capital and $585,000 in SBA capital.

  • Our private loan funds have only a 3% default rate which is a remarkable measure of financial stability that has been achieved by our clients.


What outcome measurements are built into the program?

Down Home Loan Manager

Client class surveys - service delivery is client centered. JVS Chicago has a terrific, top-notch research department that tabulates and analyzes all or our survey data.

  • Allows us to track and manage client loan payments so we can immediately call the client if we see a late loan payment and try to get the business back on track.

  • Data determines program topics regarding new classes and seminars

  • helps us determine new or revised curriculum

  • helps us assess client satisfaction

  • gather client feedback to improve service delivery


What outcome measurements are built into the program?

Measurement of program success seen in the numerous grant goals that are met and/or have been exceeded

  • Exceeded the number of clients served individually.

  • Exceeded the number of classes taught and the number of clients attending classes.

  • Got superb ratings from questionnaires the state submits to our clients randomly.


Key statistics

  • Small businesses represent 99.7% of all employer firms and employ about 50% of all private sector employees.

  • Small businesses pay nearly 45% of the total U.S. private payroll and have generated 60-80% of the net new jobs annually over the last decade.

  • 52% of small businesses are home-based, while 2% are franchises.

  • 44% of new businesses survive at least 4 years, which appears to be the critical timeline for surviving long-term. After the fourth year, the rate of firm closings declines considerably.

  • The United States unemployment rate : 8.5% in March 2009

  • The Illinois unemployment rate: 9.1% in March 2009

  • Source: U.S. Dept. of Commerce, Bureau of the Census and International Trade Administration; Advocacy-funded research by Kathryn Kobe, 2007 www.sba.gov/advp/research/rs200tot.pdf and CHI Research, 2003 www.sba.gov/advo/research/rs225505.pdf Federal Procurement Data System; U.S. Dept. of Labor, Bureau of Labor Statistics.

  • Source: U.S. Dept. of Commerce, Bureau of the Census and International Trade Administration; Advocacy-funded research by Kathryn Kobe, 2007 www.sba.gov/advo/research/rs299tot.pdf and CHI Research, 2003 www.sba.gov/advo/research/rs225505.pdf :Federal Procurement Data System; U.S. Dept. of Labor, Bureau of Labor Statistics.

  • Source: U.S. Dept. of Commerce, Bureau of the Census and International Trade Administration; Advocacy-funded research by Kathryn Kobe, 2007 www.sba.gov/advo/research/rs299tot.pdf and CHI Research, 2003 www.sba.gov/advo/research/rs225505.pdf; Federal Procurement Data System; U.S. Dept. of Labor, Bureau of Labor Statistics.

  • Source: “Business Employment Dynamics Data: Survival and Longevity, II,: by Amy E. Knaup and Merissa C. Piazza, Monthly Labor Review, vol. 30, no.0 (Sept. 2007), pp.3-10l :Redefining Business Success: Distinguishing Between Closure and Failure: by Brian Headd, Small Business Economics, vol. 21, no. 1 (August 2003), pp. 51-61.

  • Source: U.S. Department of Labor website, http://www.bls.gov/lau/


Can Entrepreneurs and Small Business Owners still be viable even in a down economy?

  • Clients are carefully planning growth strategies, including thoughtfully adding new products or services that will be in demand

  • Small businesses can be incredibly more price competitive than other medium and large businesses because they have lower overhead, making their services highly attractive to other businesses.

  • Small business can respond much more quickly to changing economic conditions which is a huge plus in a struggling economy. As a comparison, think how quickly a tug boat can change its course versus a huge ocean freighter.

  • Client businesses are looking for more business-to-business services they can offer, looking for more wholesale accounts

  • Clients are offering attractive price points by bundling products and services, a la “meal deals,” and product/service combination sales.


Blockbuster Companies that started during a Recession

Some classic companies

More recent pioneers

  • General Electric

  • Fortune Magazine

  • Revlon Cosmetics

  • Hewlett-Packard

  • Sports Illustrated

  • Burger King

  • Hyatt Corporation

  • Trader Joe’s

  • LexisNexis

  • FedEx Corporation

  • Microsoft Corporation

  • Apple Computer

  • CNN (Cable News Network)

  • Cliff Bar

  • Skype (VOIP)


Two Key Points

  • Understanding the importance of pre and post-loan technical assistance to entrepreneurs.

  • How to help clients access capital or bootstrap their business growth.


Questions?

  • How can this model of self-employment be expanded to other low-income, at-risk populations?

  • How can we partner with other community resources to expand the range of services we provide to clients?


How to contact us?

  • Donna R. RockinIllinois SBDC/Duman Microenterprise CenterJVS Chicago216 W. Jackson Blvd., Suite 700Chicago, IL 60606-6921Phone: 312-673-3430Fax: [email protected]

  • E-mail: [email protected]

  • Website: www.jvschicago.org/duman


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