Twenty-five percent of U.S. workers earn less than $12 an hour -- about $24,000 a year for a full-time worker. It's also the poverty threshold for a family of four. One quarter of all U.S. workers earn at or near the poverty level. That's an astonishing -- and unacceptable -- statistic. What's worse, with the widest income gap since 1928, economic mobility is increasingly limited, meaning these workers are more likely than ever to be stuck at the bottom.
Focusing on Small Businesses and Local Jobs to Combat Income Inequality
Small businesses create enduring, quality jobs, with living wages and growth opportunities for these workers. "Mom and pop" businesses and entrepreneurial ventures bring stability and renewed energy to deteriorating neighborhoods. A community's level of social capital and well-being is positively related to its share of the local economy held by local businesses; and small businesses donate about twice as much per employee to charitable organizations as large businesses. Small businesses create jobs with higher wages and better benefits, and support raising minimum wages, helping to combat income inequality.
And yet, small businesses struggle to access the capital and support they need to grow. Banks are risk averse. Investors overlook opportunities in underserved geographies, and public budgets are shrinking, leaving small businesses without the resources they need.
Mentoring Doubles Small Businesses' Chances
According to the U.S. Small Business Administration, half of all small businesses fail within their first five years. Only 30 percent of these businesses make it to 10 years. But for small business owners with a mentor, the difference is striking: 70 percent of small businesses that receive mentoring survive to that ten-year mark, double the rate for non-mentored small businesses.
The actual day-to-day needs of making a business grow, and making that growth sustainable, are beyond the skills of any one individual. You started a great company and made a name for yourself at farmers markets -- but now that you're ready to open a storefront, how do you find investors? Write a business plan? Develop a brand strategy? Navigate permitting? And who has the time for all this?
This is where having an outside advisor or mentor -- someone who knows your industry and has addressed the issues you face before -- is crucial.
Online Business Advising Is A Game-Changing Innovation
It's common for entrepreneurs to seek advice from varied community development organizations that offer "technical assistance," yet this typically translates to one or two staff who have limited capacity, industry and discipline expertise. Few small business owners can afford to hire a costly consultant. Across the board, finding a mentor yourself is a time-consuming proposition.
Enter online mentoring: www.BusinessAdvising.org.
At Pacific Community Ventures, we saw the role venture capital played in growing the tech industry. That model paired working capital with expert advisors who help guide entrepreneurs. It helps increase a business' chance of success, and also helps the venture capital investor ensure a financial return. Online mentoring platforms take that powerful mentorship model that helped fuel the tech boom, and bring it to brick-and-mortar small businesses across the country in a convenient, time-effective way.
BusinessAdvising.org, for example, leverages technology (an online platform with an internal, proprietary matching algorithm) and volunteerism to provide small business owners with high-quality mentoring at no cost that removes geography as a barrier. If your company is in downtown Omaha, and the best advisor for your business lives in Tampa, BusinessAdvising.org can make that match happen. Think of BusinessAdvising.org as Doctors Without Borders, combined with eHarmony, adapted for small business.
Sanjay Sinha is Relationship Manager at California Bank & Trust, and a volunteer advisor with BusinessAdvising.org. An advisor and mentor like Sanjay digs in deep with the companies he helps. During one of his mentoring stints, he spent more than 20 hours working with GAMA-GO, a giftware retail and wholesale shop. GAMA-GO had been in business for over 10 years, had strong sales, but had struggled with profitability. As he often does, Sanjay helped turn a light-bulb on for GAMA-GO's owners to see that simply increasing sales doesn't mean a company will be profitable. After working with Sanjay, GAMA-GO ended up solidly profitable for multiple years in a row AND increased their workforce.
Playing Your Part
So how can you help? Shop small and independent when you can. If you've built up a body of business experience, volunteer your time as an advisor. If you have an updated LinkedIn profile, signing up will only take a few minutes. And tip off a small business owner you'd like to support to the value of mentoring through a platform like BusinessAdvising.org. Small businesses can carry the weight of rebuilding our economy and fighting income inequality, but whenever possible, let's help lighten their load.
This page contains materials from The Huffington Post and/or other third party writers. PricewaterhouseCoopers LLP ("PwC") has not selected or reviewed such third party content and it does not necessarily reflect the views of PwC. PwC does not endorse and is not affiliated with any such third party. The materials are provided for general information purposes only, should not be used as a substitute for consultation with professional advisors, and PwC shall have no liability or responsibility in connection therewith.
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