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Small businesses are critical drivers of the US economy. Collectively, they employ one-third of the nation’s workforce – nearly 59 million Americans across the country. They create jobs, spark innovation, invest in neighborhoods, and increase America’s competitiveness globally.

Yet as anyone who supports a small business knows, global impact is only part of the story. Beyond job tallying and GDP tracking, behind these important but abstract numbers, the men and women who start and run small businesses are the backbone of America’s local communities in a very real, tangible way. Neighborhood small businesses are where we eat, drink, shop, and socialize. They give our streets and cities character, and they form the cultural core of where we live, work, study, and raise our families every single day.

The US Small Business Administration recognizes the pivotal contributions of America’s small businesses and the entrepreneurs behind them each year by observing National Small Business Week. This year’s event, declared by proclamation of the President of the United States, took place between May 5-11.

ICIC is a national organization that works with the private sector to drive economic development in inner cities across the country, but to celebrate Small Business Week this year, we turned locally. Our office is located in Dudley Square, a vibrant neighborhood in Roxbury, Massachusetts, with no shortage of its own unique small businesses to fuel us and keep us entertained.

In honor of National Small Business Week, read on to learn more about three of the small businesses in our own backyard – places where the ICIC team eats, drinks, and reads during our lunch breaks, after work, and beyond.

If you ever have the chance to visit us in Dudley Square, we hope that you’ll check out and support these exceptional businesses too.

Dudley Cafe

15 Warren Street

Roxbury, MA 02119

617-445-1000

Located in the newly renovated Bolling Building, Dudley Cafe is more than a place to eat; it’s a community hub with a mission to celebrate the arts while providing Roxbury families with wholesome food and a creative space to collaborate with local and neighborhood organizations. The cafe sources its ingredients from local businesses and makes a point to offer internships and employment to local youth. Visit for open mic nights, painting, trivia, and more. The coffee is great too.

Soleil

2306 Washington Street

Roxbury, MA 02119

617-541-9000

Soleil is a Southern-influenced, casual restaurant that serves breakfast, lunch, and dinner in Dudley Square, as well as providing catering services to the local community. Patrons can dine-in or take-out, and there is even space for small group dining, making is a natural gathering place for local social events. Stop by on the first Sunday of the month for their famous all-you-can-eat jazz brunch.

Frugal Bookstore

57 Warren Street

Roxbury, MA 02119

617-541-1722

Frugal Bookstore is an independent bookstore that is located directly across the street from ICIC. Founders Leonard Egerton and Clarissa Cropper are committed to providing affordable books to the community, to promote literacy among local children, teens, and adults. The shop has a wide variety of books in stock, but the owners are happy to special order any currently in-print book that you cannot find too. Not local? You can also shop online.

Soleil

2306 Washington Street

Roxbury, MA 02119

617-541-9000

Soleil is a Southern-influenced, casual restaurant that serves breakfast, lunch, and dinner in Dudley Square, as well as providing catering services to the local community. Patrons can dine-in or take-out, and there is even space for small group dining, making is a natural gathering place for local social events. Stop by on the first Sunday of the month for their famous all-you-can-eat jazz brunch.

For more information on National Small Business Week 2019, read the official SBA press release here.

The post Celebrating National Small Business Week Right Here in Dudley Square appeared first on ICIC.

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The Opportunity Zone program is the nation’s latest public policy attempt to encourage private investment in America’s economically distressed areas.  Opportunity Zones are already attracting enormous interest in both the Wall Street and social impact investing communities.  Yet the law that established them lacks key safeguards to ensure that investments will go where they are most needed, make economic sense for and meet the needs of local communities, and be effectively monitored and evaluated.  As a result, Opportunity Zones won’t automatically create the kind of development that will benefit the residents of the distressed communities in which they are located.

In his policy brief What It Will Take for Opportunity Zones to Create Real Opportunity in America’s Economically Distressed Areas, ICIC Senior Vice President and Director of Research Howard Wial argues that Opportunity Zones will benefit distressed communities only if investors, local governments, community organizations, and other organizations with a stake in the economic progress of low-income communities abide by four fundamental principles to guide investments in the zones.

The post What It Will Take for Opportunity Zones to Create Real Opportunity in America’s Economically Distressed Areas appeared first on ICIC.

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On Saturday, April 27, Independent Bookstore Day (IBD) will mark its fifth year celebrating America’s independently-owned bookstores. As stated on the IBD website, “independent bookstores are not just stores, they’re community centers and local anchors run by passionate readers.” In addition to galvanizing ICIC’s alumni and friends around supporting their local independent bookstores, we thought it would be the right time to recognize our own: Frugal Bookstore, located directly across the street from the ICIC office.

Leonard Egerton and Clarissa Cropper founded Frugal Bookstore because they believed in the impact it could have on the economic and cultural life of Dudley Square, one of Boston’s distressed neighborhoods. Clarissa participated in the Boston cohort of our Inner City Capital Connections (ICCC) program last year and said, “my experience was eye-opening and informative. Going through the process [of ICCC], specifically the web series and conference, helped me to see questions that I didn’t even know I needed.”

Their bookstore has survived in a neighborhood of vacant and ever-changing storefronts because they developed a mutually supportive relationship with the Dudley Square community. They’re driven to make the business work because they believe in its mission – to promote literacy among local children, teens and adults by providing affordable books. As a result, the neighborhood has rallied behind them – from parents to teachers and members of the school committee.

We share their story because it serves as an important reminder that one’s passion can, albeit with hard work, become a tool for inclusive growth in their own community. We believe in the work that Leonard and Clarissa are doing, and we plan to celebrate them and the other nearly 2500 independent bookstores across the nation on Saturday, April 27.

The post Dudley Square’s Frugal Bookstore Reminds Us Why We Celebrate Independent Bookstores appeared first on ICIC.

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Written by Kim Zeuli and Kathleen Shea, ICIC. This blog was originally published on Governing.

The structural challenges that entrepreneurs of color face are well-documented, and disparities in business ownership are stark: While minorities make up 38 percent of the U.S. population, only 19 percent of businesses are minority-owned. Minority-owned firms earn less than half the revenue of non-minority-owned firms, and few are on a trajectory to become Fortune 500 companies. Yet most programs focused on supporting entrepreneurs of color target small-business creation, which leads to a self-perpetuating cycle that limits wealth building and may be exacerbating wealth inequities.

As cities’ leaders have increasingly recognized the role that minority-owned businesses play in building local economies and creating wealth in disinvested neighborhoods, new efforts have been launched to help support entrepreneurs of color, especially those in high-growth sectors.

In Chicago, for example, the Blackstone Challenge was launched in 2017 as a three-year, $3 million effort to advance entrepreneurship in underserved communities. Led by World Business Chicago and supported by the Blackstone Charitable Foundation, the Blackstone Challenge funds organizations that recruit and support entrepreneurs of color as well as women, veteran, and immigrant entrepreneurs.

JPMorgan Chase’s Entrepreneurs of Color Fund provides financing for Community Development Financial Institutions and other nonprofit lending partners to provide alternative sources of capital to grow minority-owned businesses. Piloted in Detroit with the Detroit Development Fund and the W.K. Kellogg Foundation, the Entrepreneurs of Color Fund has been expanded to Chicago, San Francisco, the South Bronx and greater Washington, D.C. Between 2015 and 2018, more than 200 minority-owned business received $9.5 million in capital through the Fund.

Yet more needs to be done. We highlight five interventions that city leaders should prioritize to support entrepreneurs of color and help them grow the scale of their businesses:

1. Build more capacity for entrepreneurial support: In our study of six major metro areas, we found that incubators and accelerators focused on supporting entrepreneurs of color do not have sufficient capacity. For example, in Atlanta, 11 incubators and accelerators serve only 34 percent of the city’s entrepreneurs of color. Entrepreneurs of color typically lack the robust social and professional networks needed for high-growth businesses.

2. Target support in sectors with high demand from large buyers:Contracts with large organizations and government agencies are critical for entrepreneurs in high-growth sectors. Yet we continually hear that finding qualified minority-owned businesses that have the capacity to take on large contracts is a challenge in most cities. More assistance from entrepreneurial support organizations (ESOs) should be targeted to building the capacity of minority-owned firms in industries or sectors that are in high-demand by these large organizations or government agencies.

3. Create more-inclusive industry-specific ESOs: Increasing access to industry-specific ESOs (such as those focused on food manufacturing or high tech) for entrepreneurs of color is critical, since these kinds of ESOs provide access to tailored, powerful networks and targeted capital. Entrepreneurs of color are not participating in this type of ESO at the same rates as their white male counterparts. This is particularly true for high-tech incubators and accelerators.

4. Invest in new partnerships for a comprehensive approach:Collaboration is needed among existing organizations to address the three primary structural challenges faced by all entrepreneurs but which are particularly difficult for entrepreneurs of color: access to management education, capital (money), and contracts and new customers (markets) — the three Ms. Most programs focus on supporting only one of the Ms and operate independently from other programs. One notable exception is the new Ascend 2020 program, now operating in 10 U.S. cities and growing.

5. Ensure access to growth capital from multiple sources: Because of capital-access challenges, entrepreneurs of color are more likely to enter industries with low capital requirements and high failure rates rather than high-growth sectors. More startup and growth capital needs to be available to entrepreneurs of color, and they need support accessing a broad range of sources — not just more venture capital but also equity infusions from corporations and impact investors.

The economic imperative for supporting entrepreneurs of color is clear. Only by removing barriers to growth for minority-owned businesses can city leaders maximize the impact of efforts to catalyze job and economic development.

The post How Cities Can Help Entrepreneurs of Color Scale Up appeared first on ICIC.

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ICIC by Julie Kent - 2M ago

March is Women’s History Month, a time to commemorate and encourage the study, observance, and celebration of the achievements of women throughout history. These achievements span countless disciplines: social, cultural, political, and, of course, economic. According to a report by the National Association of Women Business Owners, today more than 11.6 million US firms are owned by women, including 5.4 million by women of color. Collectively, these women-owned businesses in the U.S. employ 9 million people and generate almost $1.7 trillion in revenue. We have come a long way and yet the road toward equality still stretches far into the future.

While it’s true that the number of women-owned businesses has skyrocketed in the last 20 years (114% growth compared to an overall national rate of 44%), employment and access to capital for women-owned firms remain stubbornly flat. In the case of revenue generation, there has even been a slight decline. Currently, less than 5% of women-owned businesses generate at least $1 million in revenue.

Closing this gap is critical for economic development, especially at the local level. A majority of the 600+ new, women-owned businesses (71%) launched daily are by women of color. As more of these firms attempt to scale, the women that lead them bring much-welcomed jobs to communities often desperately in need of them and create inclusive economic and social opportunity in the process. Yet, in spite of their demonstrated leadership skills and deep commitment to growth, women continue to struggle for access to the capital and connections needed to build their ventures. This is largely due to historic inequity.

Women’s history month is about acknowledging this historic inequity – the history of women’s struggle – and doing what we can to address and overcome it. At ICIC, we are committed to providing urban, women entrepreneurs the access to the capital and capacity-building opportunities needed to smash through the ever present glass ceiling. According to the 2018 programmatic impact report, 45% of participants in the Goldman Sachs 10,000 Small Businesses program have been women. The program has partnered with organizations supporting women entrepreneurship such as the National Association of Women Business Owners  to provide a year of discounted membership to women-owned businesses graduating from the program. In addition to advancements towards gender equality in the 10,000 Small Businesses program, we are proud that 2018 was the first year that a majority (54%) of participants in ICIC’s Inner City Capital Connections (ICCC) program were women. Since 2005, we’ve trained over 900 women-owned businesses, resulting in over $700m capital raised and boasting an average annual growth rate of 98%.

This month and every month, the best way we can all support the women in our lives and our cities is simple: Pay them. Invest in them. Hire a woman-owned business for your next project. Refer your colleagues. Spread the word.

“Celebrating” and “empowering” are nice words associated with the month, but for the economic sake of our cities, let’s do more. Together, let’s enrich the women-owned businesses in our communities. Only then will we will bridge the gender gap, and only then will our cities truly prosper.

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Need some inspiration? ICIC alumni are building incredible enterprises and creating thousands of jobs in their communities and across the nation. Read on to learn more about their firms, and please consider giving them your business.

Martha De La Torre, El Clasificado: “El Clasificado has over 1.5 million readers with a weekly circulation of 510,000 distributed in over 300 cities throughout Southern California and the Central Valley. After initial hesitance from advertisers, Martha decided to change the paper’s distribution method from direct mail circulation to an award-winning bulk drop system in areas with high Hispanic traffic. The resulting growth transformed El Clasificado into EC Hispanic Media, a media company allowing advertisers to reach Spanish and bilingual English/Spanish communities through print, mobile, event, and online advertising, which, through elclasificado.com, is the company’s fastest growing platform.”

Vanessa Faggiolly, Amerisal Foods: “[…] the Latin food distribution company owned by the mother-daughter team, not only became a lucrative means of sustenance for their family, but it also made a deep impact on its employees and their families, its loyal customers yearning for a taste of Latin America, and the entire San Fernando Valley community.”

Karen Fleshman, CEO of Haskins Advisory Group: “Karen leveraged her background in barcode technology to launch her [tech advisory] company. ‘I realized pretty early on that had a future – a huge future because technology was changing and there was such a big need for information,’ Karen says.”

Kristin Groos Richmond and Kirsten Saenz Tobey, Revolution Foods: “What began as a personal mission to improve local school nutrition catapulted UC Berkeley classmates Kristin Groos Richmond and Kirsten Saenz Tobey from prepping a few hundred lunches in a small California kitchen to serving over 320 million meals across the entire nation (and working directly with national leaders like Michelle Obama) in about a decade.”

Stephanie Hickman, Trice Construction Company: “Stephanie worked for 25 years as a labor attorney, executive, and lobbyist before leaving the corporate world in 2006 to run Trice, a construction company started by her family in 1967. At the time she took charge it was a small residential construction company, but under her leadership Trice has grown into a highly-regarded commercial concrete supplier to Fortune 500 corporations, top 100 contractors, and major public entities.”

Cloud Morrison, Red Cloud, LLC: “Cloud found herself manufacturing small-batch promotional pieces for her friends’ bar and bat mitzvahs. She realized these one-off jobs just weren’t smart business. This epiphany led Cloud to ICCC in 2016. There, she absorbed a wide range of business guidance, including the chance to pitch to a panel of capital experts at the National Conference.”

Anne-Merelie Murrell and Natalie Lomedico, Giroux Glass: “Glass is our secondary business. Our first business is to continue to grow a 74-year-old company, to go on a long, long time, to provide for thousands of employees to come, and make communities better.”

Jennifer Pinck, Pinck & Co: “As the founder of Pinck & Co., a Boston-based firm providing planning, design, and construction management services, Pinck has overcome adversity to lead Pinck & Co. to a soaring 94.59% growth rate and 2016 revenues of $5.15 million.”

The post Celebrating Women’s History Month appeared first on ICIC.

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Ivy Lawson, founder and CEO of Ivyees ‘Everything Honey’, is the first person of color to open a business in Boston’s historic North End neighborhood. Considered a pioneer by many, Ivy sees herself simply as a woman who “followed a sign” to create her business selling raw honey-based products.

When she realized how many toxic chemicals were found in her everyday products, Ivy immediately began creating natural products at home for her family. However, it wasn’t until Ivy traveled back to her native Jamaica to conduct a study with bee farmers that she decided to turn her hobby into a business.

Founded in 2008, Ivyees ‘Everything Honey’ is an all-natural beauty line of raw honey-based products, including toothpaste, shampoo and conditioner, and skin care products. “I was always concerned about…what my family is using on our skin,” Ivy said. “I started reading labels and learned that tons of chemicals are in the products we use on a daily basis.”

After successfully expanding her business to stock Whole Foods stores across the North Atlantic and on Amazon, Ivy realized something was missing. A customer-driven business woman, Ivy decided to take a leap of faith and open a storefront location. “It was a risk for me to take and say ‘Let me open a brick-and-mortar.’ The reason why I opened it is because I wanted to have a place where my customers can come in and get educated on my products.”

In order to grow her company’s capacity to sustainably manage a retail location, Ivy turned to the Inner City Capital Connections (ICCC) program for guidance in 2016. ICCC gave Ivy access to crucial information on strategic planning, a skill she needed when opening a brick-and-mortar. “[ICCC] has been wonderful in all the connections I’ve been able to make. Having access to networks and on how to run your business, you don’t just get it anywhere.”

Four months into opening her shop, Ivy has not only received attention from the Mayor’s and Governor’s offices, but also from her local community, Boston’s historic North End, which is predominately Italian. “It’s a closely-knit community, [and they have] been very gracious. All the restaurant owners and shop-keepers…have been very supportive. Each of them has come by and extended their welcome…and they like the fact that I’m selling everyday natural products.”

Ivy credits ICCC with opening the door to tools she needed to help run her business effectively, increase her customer retention rates, and grow demand for her products. Since opening her shop, she’s seen her foot traffic and sales increase, introducing her to new growth venture opportunities. “I’ve gotten a lot of information and traction from all of the resources provided, and I’m really appreciative of the services [ICCC] provides.”

Eager to grow and expand, Ivy plans to apply the knowledge she gained from ICCC as she takes advantage of other resources. For example, she is currently participating in the Goldman Sachs 10,000 Small Business program, another of ICIC’s Urban Business Initiatives. As she executes her growth strategy, which includes expansion across the country and into Europe, she will continue to apply the skills she first learned from ICCC.

Learn more about the Inner City Capital Connections (ICCC) program

The post Leveraging the Power of Honey to Break Barriers appeared first on ICIC.

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ICIC by Julie Kent - 3M ago

Some would say Bo Menkiti, Founder and CEO of the Washington, DC-based The Menkiti Group, is in the business of real estate. Others who witness Bo’s work first-hand would say he’s in the business of transformation.

That’s because The Menkiti Group doesn’t just buy and sell property. It transforms abandoned and underutilized properties into affordable homes and workspaces, helping create vibrant, healthy communities.

“The Menkiti Group came out of the opportunity to make an investment in the neighborhood right around where I was living. All the homes around me were pretty much vacant or abandoned,” Bo says. “I was fascinated by the lack of investment in this neighborhood just a few miles from the nation’s capital.”

Scaling a Business with a Mission

Bo turned that fascination into a mission: To build The Menkiti Group as a successful double bottom-line company, measuring both financial success and social impact. “I saw a tremendous opportunity to make a significant difference,” Bo says.

But for any business to scale at the rate Bo envisioned, capital is a key ingredient to success. That’s where the ICCC program helped The Menkiti Group begin a dramatic growth phase and bring Bo’s vision to life. Since participating in ICCC, Bo and his team have grown the company’s revenue by 600 percent.

ICCC helped Bo understand when he would need outside capital and where that capital would come from. Did it make sense to turn to private equity or mission-based institutional capital? After laying out his options and consulting with ICCC, Bo decided the best path forward was to pursue individual family office mission-based capital. And Bo has raised over $120 million since that time.

“This process really helped crystallize for us that capital is only good if you’re aligned with the goals and the strategy and the values of the capital,” Bo recalls.

The Network Effect and Community Development

Bo also credits ICCC for the connections and relationships he made with the other businesses. “The network of organizations has been powerful in the growth and development of our company,” he says.

The MLK Gateway Project in DC’s Anacostia neighborhood, scheduled for completion in early 2019, is a perfect example of ICCC’s “network effect.” Bo saw the need for an active commercial area including retail shops, fresh groceries, coffee shops and places to gather but that kind of development has been hard to bring about in a place like Anacostia, where many people live but few work.

The crux of the project depended on a local cyber security firm moving its 150 employees from Connecticut Avenue and K Street N.W. to the new project in Anacostia. Bo was able to make this happen, not only because of his powerful vision, but also because the owner of the tech company was a contact he made through the ICCC program.

In the spirit of giving back, Bo serves as one of the inaugural members of ICIC’s Inner City Alumni Network (ICAN) Advisory Board. He sees his involvement with ICIC as providing “a great opportunity to interface with companies that were in the same stage of growth… as well as a great opportunity to look cross-sector.”

How to Scale a Vision

Known as a trailblazer by those he works with, Bo has been able to foster economic development by revitalizing areas that have been long forgotten. “And he can rally the resources around that vision,” says Brandon Green, Managing Partner and Co-Founder of Menkiti’s sister company, Keller Williams Capital Properties.

“Business is a vehicle to have a great impact on people’s lives,” Bo says. “I believe that many of today’s most pressing problems can actually be solved through self-sustaining and sustainable business opportunities.”

Bo has no plans to stop now. Despite his hyper-local focus and engagement in his DC community, he intends to scale nationally, and test his thesis. And if the past is any indication, his results will remain true to his vision – to engage with communities and unlock what’s possible.

The post True to vision, true to community appeared first on ICIC.

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Karen Fleshman is a master networker. She excels at connecting products to people and executives to the resources they need to lead successful businesses.

As founder and CEO of Haskins Advisory Group, Karen has grown her business from a one-woman show to a hardworking team of five. Since her first participation in ICCC, the business has grown its revenue by 69%, and she credits the program with setting herself up for future success.

The Future is Growth

Karen leveraged her background in barcode technology to launch her company. “I realized pretty early on that had a future – a huge future because technology was changing and there was such a big need for information,” Karen says. She saw opportunities to grow her business, but she knew she’d have to incorporate as an LLC (limited liability company) first.

So she participated in ICCC with that goal in mind. “There was an expert in marketing, an expert in finance, human resources, and these individuals, their knowledge and expertise and passion just really came through in each session,” Karen remembers. “It was blowing me away.”

One of the sessions Karen attended tackled small business taxes. She notes that this presenter “made himself very available” after the seminar to discuss her concern about transitioning to an LLC. She knew she’d come to the right place; she could see a clear growth pathway for her business.

Networking with a Mission

Karen has used her network to hire people like herself to the Haskins team – individuals over 50 who have had successful careers in the corporate world but are unable to find positions. “They are my hiring market. I look for people like that,” says Karen.

She also maintains relationships she’s built through the ICCC community both as a mentor and mentee. One woman she went through the program with remains a close confidante, meeting for dinner occasionally, while another has become her go-to resource for marketing outsourcing. She is also a huge advocate for ICCC, nominating 10 businesses for the 2018 Chicago ICCC program.

For a networker like Karen, relationships are everything. ICCC helped open doors, but it’s clear: Karen would have waltzed through that door with her entire network in tow regardless.

The post Relationships Fuel Growth for Thriving Woman-Owned Tech Consultancy appeared first on ICIC.

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This piece originally appeared in our 2018 Inner City Capital Connections Impact Report

Vanessa Faggiolly doesn’t know the meaning of defeat. Starting from nothing, she’s been able to attain a piece of the American dream.

Armed with resilience, a deep love for her family, and a lasting connection to her homeland, Vanessa Faggiolly – along with her business partner and mother, Nora Saca – transformed a perilous future into a multimillion-dollar business.

Amerisal Foods, the Latin food distribution company owned by the mother-daughter team, not only became a lucrative means of sustenance for their family, but it also made a deep impact on its employees and their families, its loyal customers yearning for a taste of Latin America, and the entire San Fernando Valley community.

A Competitive Edge

But this story of two strong women at the heart of a business and a community might not be possible if it wasn’t for the Kaiser Permanente-sponsored ICCC program in Los Angeles.

Vanessa’s grandmother taught them: “You have two hands. Work. Never beg for money.” Vanessa and Nora took these lessons to heart and with a keen entrepreneurial spirit bought a struggling business and lifted it from bankruptcy to liquidity, utilizing the resources and teachings from ICCC to help access capital and find success.

Vanessa explains that ICCC helped her to better understand her financials and become much more successful at raising capital. She even said that the banker was amazed at how comprehensive her report was and she attributed her preparedness to ICCC. The business is on track to grow its revenue 18 percent in 2018. When they started out, Vanessa and Nora had only 4 products. Now they have more than 50. And they’re growing everyday, Vanessa says.

Giving Back

The mother-daughter duo could have been content with a thriving business, but they wanted to do more and give back to the community that has given so much to them. Amerisal donates thousands of pounds of food each year to homeless individuals and the elderly. And Vanessa currently sits on a board at Cal State Los Angeles, where she helps first-generation student leaders become entrepreneurs and gain real-life leadership experience. Vanessa also nominated 14 businesses, and 4 of them – all minority- and woman-owned – are participating in this year’s ICCC program in LA.

Meaningful Success

For Vanessa, her deep roots in the Latin American community drive her passion. “We are solving a pain,” she says. “A pain of nostalgia.” She sees a new generation of her Latin neighbors, thousands of miles away from their homeland, tasting her food and passing down memories and traditions that will last a lifetime.

“If you believe in dreams,” Nora says, “our company is a dream.”

“When we started, it was very hard,” Vanessa recalls. “We started from zero … Below zero.” But the duo had something else. They had drive, and they had passion, Vanessa remembers. “We knew we could make this business successful.” And now, she is glad to be able to teach what she’s learned to a new generation of leaders.

In addition to participating in our ICCC program, Amerisal Foods appeared on our 2018 Inner City 100 list. At the annual IC100 conference, Vanessa and Nora were the recipients of the esteemed FedEx Champion of Global Entrepreneurship Award.

The post Lifting Community with a Taste of Home appeared first on ICIC.

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Written by Kim Zeuli and Kathleen O’Shea, ICIC

Since 2014, ICIC has been a proud partner of JPMorgan Chase’s Small Business Forward initiative, a $150 million, multi-year global initiative to support women, minority and veteran-owned small businesses to help build their long-term success, creating local, inclusive economic growth.

ICIC has developed a comprehensive, custom evaluation for Small Business Forward that measures the capacity and effectiveness of the entrepreneurial support organizations (ESOs) it supports. Our rigorous approach includes an independent, annual survey of the businesses that have received support from Small Business Forward ESOs (both currently and in the past). Now in its fourth year, our annual evaluation of these ESOs collects extensive data revealing new insights into the impact of their programs and the performance of the businesses they support.

Several of the ESOs supported by JPMorgan Chase are focused on the high-tech sector. They play a critical role in driving the growth of stronger clusters in their regions, supporting businesses in biotechnology and life sciences, cleantech, health IT, and other high-tech sectors. These sector-specific ESOs provide businesses access to tailored, powerful networks and help them access targeted capital.

The eight high-tech ESOs we evaluated in 2018 supported 646 businesses that raised just over $137 million in capital, generated nearly $115 million in revenue, and received 157 new patents. The businesses employed 2,504 people and paid nearly $97 million in wages.

Benchmarking Metrics for High-Tech ESOs

In 2018, we collected information from 308 businesses supported by eight high-tech ESOs. On average, the businesses are young and small: They have an average of 9.4 total employees and 67 percent are five years old or younger. Seventy-eight percent consider themselves to be concept, seed, or early-stage businesses.

Program Effectiveness Ratings

We ask businesses to rate the effectiveness of the ESOs’ programs in terms of helping them grow. The responses are ranked in order from highest to lowest ratings for 2018. On average, the ESOs were rated as most effective at business education followed by connections to professional support services and capital access training. Connections to lenders and international customers are the weakest areas, on average, across all ESOs.

Small Business Forward continues to adapt its strategy to address such gaps. For example, it is improving access to loans through the Entrepreneurs of Color Fund, which supports community-based lenders in Detroit, Chicago, San Francisco, and the South Bronx to scale minority-owned businesses.

Our analysis also clearly shows how performance ratings vary across ESOs. For example, in 2018, with connections to grantmakers, the average rating for each organization varied from seven percent to 63 percent.

Overall, we observe higher program effectiveness ratings in 2018, with all but two of the ratings (investor connections and U.S. customer connections) improving since 2017. A number of the effectiveness ratings stand out for their marked increase across the four years: business education (34 to 74 percent), professional support service connections (42 to 61 percent), and capital access training (38 to 60 percent). While it is difficult to draw conclusions about these trends because the sample of businesses responding to the survey varies each year, this does demonstrate the strength of the Small Business Forward initiative in terms of identifying highly effective ESOs and continuing to build their capacity.

The ESOs are less effective at connecting businesses to new customers. This is an area where many ESOs struggle, and few dedicated intermediary organizations are focused on matching businesses to private contracting opportunities with large corporations, hospitals and universities. Ascend 2020, a new initiative developed by the University of Washington Foster School of Business’ Consulting and Business Development Center and supported by JPMorgan Chase, is focused on responding to this need, particularly for minority-owned businesses. In the six cities in which it is currently operating, local partners focus on connecting minority-owned businesses to procurement opportunities. In Chicago and Washington, D.C., Ascend 2020 supports a dedicated intermediary organization that matches qualified businesses to opportunities with large organizations in the market.

Key Performance Indicators

Given that most of the businesses in our sample are young, it is not surprising that in 2018, on average, just over half (56 percent) are earning revenue, but the majority (77 percent) are not yet profitable. In 2018, on average across all organizations, the businesses reported earning about $655,000 in revenue, but this varied widely across ESOs—with one ESO supporting only pre-revenue businesses, while another supports businesses with an average of $1.6 million in revenue.

The vast majority of the businesses seeking capital of all types have been successful. They were most successful at securing debt capital (88 percent success, on average), but about three-quarters also experienced success raising equity (75 percent on average) and securing grants (74 percent). The ranges in success rates and amounts of capital received highlight the fact that some organizations do not support businesses in finding and securing a specific type of capital, which may be attributed to differences in industry and business models.

Across the four years, the average revenue reported by the businesses has declined (from $1.1 million to about $655,000), but interestingly, average profits (positive net income) have increased (from about $253,000 to just over $463,000). These trends reflect the changing business sample that responded to ICIC’s survey, which prevents us from drawing strong conclusions from the survey year over year.  For example, the 2018 sample may include both more early-stage (pre-revenue) businesses as well as more mature businesses that are reporting higher profits.

The share of businesses receiving debt capital increased from 27 to 88 percent since 2015, yet the average size of loans received has decreased significantly (from just under $500,000 to approximately $152,000). The share awarded grants has increased from 37 to 74 percent over the same time, and the average grant received has grown significantly (from $273,400 to nearly $550,000). By comparison success rates in raising equity and the average size of equity investments has remained relatively stable. The share of businesses receiving patents decreased slightly from last year, from 42 to 33 percent, but overall has increased since 2015.

Prioritizing Data Collection to Maximize ESO Impact

Our evaluation begins to fill a critical gap in measuring what effective business incubation looks like in the U.S. An increasing number of ESOs, including many supported by Small Business Forward, have sophisticated strategies in place for collecting and reporting data. Yet, many still have only informal processes or ad hoc tactics in place for quantifying impact. Regular surveying of businesses is time- and labor-intensive. Resources are often limited and ESO leadership may be reluctant to divert them away from programming. Additionally, many ESOs are newer organizations that may not yet have established systems to collect such data efficiently. Keeping an up-to-date record of business contacts, for example, can be extremely challenging even for a well-resourced organization.

It is critical that ESOs have access to the right tools and best practices to collect data and report on the unique impact of their organization. In 2019, ICIC and JPMorgan Chase will begin to equip Small Business Forward ESOs with the right strategies and tools necessary to measure their impact and communicate their value, especially with respect to diversity and inclusion. Small Business Forward will also continue to adapt its strategy by supporting promising new initiatives, such as Ascend 2020 and the Entrepreneurs of Color Fund, which help address critical gaps for entrepreneurs of color that have been highlighted in ICIC’s research and evaluation efforts. The goal is to ensure all ESOs are well positioned to further improve the effectiveness of their programming, strengthen the performance of businesses they support, and maximize their impact for all entrepreneurs.

The post Small Business Forward Leads the Way in Prioritizing Impact Measurement among ESOs appeared first on ICIC.

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