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

Wealth Building for the Spanish-Speaking Microentrepreneur and Self-Employed: The Primer Paso Curriculum. Bernardo Ramirez - Hispanic Economic Development Corp, Kansas City, MO. Entrepreneurial Activity in US.

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

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  1. Wealth Building for the Spanish-Speaking Microentrepreneur and Self-Employed: The Primer Paso Curriculum Bernardo Ramirez - Hispanic Economic Development Corp, Kansas City, MO 2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008

  2. 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 and Association for Enterprise Opportunity 2008 NCLR Annual Conference, San Diego, CA – July 15, 2008

  3. 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

  4. 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

  5. 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

  6. 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

  7. 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

  8. 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

  9. 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

  10. 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

  11. 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

  12. 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

  13. 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

  14. 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

  15. 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

  16. 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

  17. 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

  18. 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

  19. 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

  20. 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

  21. 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

  22. Lessons Learned Facilitating Primer Paso FastTrac • Stage of business – integrating current and aspiring entrepreneurs • Explain feasibility plan incentives • Program fee • Evaluations of the program • Location • Expectations • Student-to-instructor ratio • Strengths of the business coach and the needs of the participants • Reputation (guest speakers) 2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008

  23. 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

  24. 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

  25. 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

  26. 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

  27. Funding Sources • Corporate • Banks • Accounting firms • Attorneys • Local small businesses 2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008

  28. 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

  29. 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

  30. 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

  31. 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

  32. 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

  33. Thank you Gracias Questions? ¿Preguntas? 2008 NALCAB Annual Conference, San Francisco, CA – September 4, 2008

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