Transcript Entrepreneurship and Small Business as a Means to Self

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?
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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?
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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
 Combined overall access to over
Default rate -remarkably low
given the un-bankability of
the clients.
 Our private loan funds have only
$700,000 in private capital and
$585,000 in SBA capital.
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
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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
 LexisNexis
 Fortune Magazine
 FedEx Corporation
 Revlon Cosmetics
 Microsoft Corporation
 Hewlett-Packard
 Apple Computer
 Sports Illustrated
 CNN (Cable News Network)
 Burger King
 Cliff Bar
 Hyatt Corporation
 Skype (VOIP)
 Trader Joe’s
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. Rockin
Illinois SBDC/Duman Microenterprise Center
JVS Chicago
216 W. Jackson Blvd., Suite 700
Chicago, IL 60606-6921
Phone: 312-673-3430
Fax: 312-553-5544
[email protected]
• E-mail: [email protected]
• Website: www.jvschicago.org/duman