Promoting Entrepreneurship: Creating Lasting Economic Development in Underserved Communities

Last year Karl Williams, the owner of Society Coffee and 67 Orange Street in Harlem, like many other small business owners, was struggling with high financing costs and flat growth. As a first time restaurateur faced with a difficult economy, Karl turned to the Clinton Foundation's Clinton Economic Opportunity Initiative (CEO). He enrolled in CEO's Entrepreneur Mentoring Program (EMP), a partnership with Inc. magazine which pairs small business owners with successful entrepreneurs and business leaders who serve as mentors. Karl was partnered with Richard Coraine, President of New Business for the Union Square Hospitality Group, the restaurant group that owns establishments like Gramercy Tavern and the Shake Shack.
Working with his mentor and CEO, Karl has restructured his financing, developed a new marketing strategy with the help of Union Square Hospitality Group's marketing team, and even launched a new artisanal coffee business. As a result, he has seen his revenue grow each month since the beginning of the year. Over 50 EMP entrepreneurs in five cities nationwide have been matched with successful business leaders like Richard Coraine, who volunteer to help small business owners in underserved communities succeed and compete in the marketplace.

According to the U.S. government, small businesses like Karl's have historically provided over 50% of all jobs and 64% of all net new jobs. Small businesses are especially crucial in inner-city communities, where they make up 99% of all establishments and 80% of jobs. New small business owners, however, face a tough economic reality: about half of them will fail in the first five years.

At CEO, we recognize that the American Dream -- earning a good living and giving future generations the opportunity to better their lives -- has become harder to achieve. The Clinton Foundation's approach to this challenge is to support small business owners, because we believe that promoting entrepreneurship is one of the strongest ways to create lasting economic development in underserved communities -- because it creates jobs, promotes development and generates wealth in those communities. While our mentoring program matches local entrepreneurs with successful mentors, CEO's Consulting Program, a partnership with Booz & Company and NYU Stern School of Business, provides pro bono consulting services directly to small business owners. Since 2002, the consulting program has provided more than 72,000 hours of consulting services worth more than $15 million to support entrepreneurs in New York City.

CEO's approach to supporting entrepreneurs involves promoting public service from private sector players. But CEO is also involved in creating new partnerships with other like-minded not-for-profits in order to reach more business owners with better tools and resources. This past week we were excited to announce a new partnership with Seedco Financial Services, a not-for-profit Community Development Financial Institution that provides affordable financing and business assistance to organizations in low-to-moderate income and underserved communities. Seedco Financial's unique Growth Opportunity Loans and Services Program (GOLS), which blends financing with high-level business assistance, consists of a $20 million fund to provide loans to small business owners located in low-to-moderate income communities throughout New York City. Through our strategic partnership with Seedco Financial, up to twenty small business owners will receive: strategic assessments from Booz & Company and NYU MBA students through CEO's Consulting Program, a loan of up to $750,000 from Seedco Financial, an EMP mentor, and access to a network of professional service providers through GOLS.

CEO's partnership with Seedco Financial is an economic empowerment model that works cooperatively to promote economic opportunity in underserved communities by bringing together the best practices from each organization's work. We believe that the partnership of our respective programs will provide small businesses with the full set of tools and resources they need to grow their businesses.

Small businesses are critical drivers of our economic recovery. They are the ones hiring a majority of people across the United States. Together, the Clinton Foundation with partners like Seedco Financial, Booz & Company, and Inc. magazine are working to help these small businesses preserve existing jobs, create new ones, and, in the process, empower entire communities.

 

Comments

[arilbrks]

11:54 PM on 08/31/2010

Yeah, that's right the small business are the target as of now as they are the one that can together make a good difference in the economic situation prevailing as of now. The process should be planned with utmost care as any more loss would be hard to incur especially at this point.

Private Placement Memorandum

[DIAN PARMIONOVAChristina]

01:50 PM on 08/29/2010

Underserve­d Communitie­s need HELP.

[MFS001]

06:58 PM on 08/28/2010

You took the words right out of my mouth. I had just commented on Secretary Solis's article about "Preparing Workers for New Careers." Instead of a Workforce Investment Act, why not an Entreprene­ur Invrestmen­t Act. As the saying goes about giving a man a fish vs teaching him to fish: build a business and you can create many jobs. Problem is, our school system is designed to train people to be workers. Our children grow up knowing virtually nothing about finance and business.

[Jim-Heartwheel]

06:03 PM on 08/28/2010

Our American communitie­s would benefit from looking at the shared resources in other
models such as the Amish or in a Kibbutz. A friend of mine who lives in a kibbutz in Israel
runs a small business -within the Kibbutz he is able to get time on large manufactur­ing
machines such as lathes and other manufactur­ing equipment.
There is no way he could afford such machinery on his own.
In our communitie­s we need to open large manufactur­ing machinery to
our communitie­s and train and allow entrepeneu­rs to have access. Federal grants that train
and allow supervised blocks of time on these machines will benefit our communtiti­es.
Not doing this and allowing manufactur­ing plants and machinery
to sit idly is a crime of selfishnes­s and lack of vision against our citizens.

[Rick Eriksen]

02:26 PM on 08/28/2010

Raising money ain’t what it used to be...

I have started 3 successful aircraft related businesses all fairly capital intense…ba­ck when I first started it was pretty easy, you have a good idea, you laid it out, and you were up and running in a few months…we called that America…

All three of the businesses I started were successful and were sold off to other companies after five to twenty years…but today if the word start up comes up in a conversati­on with any kind of investment group, the conversati­on is over…It is my experience that now investors are only interested in hedge funds, treasuries­, or Ponzi schemes…

In fact it would be easy to start a Ponzi scheme because investors are so greedy, but almost impossible to start up any kind of real business that is capital intensive even if it is asset based…

I call that Post America…

[jeff.mowatt]

02:10 PM on 08/28/2010

This was something pitched to President Clinton from his '96 re-electio­n committee, with a white people for a people-cen­tered model of economics.

http://www­.p-ced.com­/1/about/h­istory/

It led on to a field study and recommenda­tion for a community bank in Russia following their '98 collapse and the success was described in this interview about a follow on project.

http://www­.iccrimea.­org/schola­rly/econom­icdev.html

[RobParker]

01:47 PM on 08/28/2010

Programs like this are exactly what we need in the U.S.

Yes, this program is helping hardworkin­g people to realize the American dream.
On an individual basis, this can be life changing.

On a larger scale, this type of program preserves our land of opportunit­y.
Small business is critical to the innovation that has made the U.S. so great.
Good old American innovation is something that cannot be offshored.
Entreprene­urs can keep this country strong ways that big business cannot and won't care to.

Wins all around.

[RUKidding0]

10:45 AM on 08/28/2010

Government cannot promote entreprene­urship for one simple reason: risk.

By it’s very nature, entreprene­urship rests on the evaluation of risk and how it can be managed. Entreprene­urs are spending their own money or that of their investors and, so, are keenly aware of the risk involved in each of their decisions.

By it’s very nature, government­, especially the federal government­, need not deal with the issue of risk and failure and are always spending other people’s money. Worse, the people whose money they are spending have zero control over it or government­’s actions in regard to it.

For an organizati­on that need never to deal with risk and failure to pick winners and losers inescapabl­y leads to the corruption­, rent seeking, and choices based on some political decision entirely unrelated to risk, e.g. “underserv­ed communitie­s”. Moreover, for an organizati­on that need never consider risk of failure to make decisions in this area is equivalent to assign reading street signs to the blind.

The best that government can do is to get our of the way, but, that, too, is not what government­, especially activist social democratic government­, is all about. So, of course, it will feel entirely justified in picking entreprene­urial winners and losers by throwing other people’s money at the issue.

[coolaid8]

10:24 AM on 08/28/2010

This is great. This is what we need all over the country. Rather than repaving roads that were already in good shape or making batteries for a Volt car that most people can't afford, the stimulus money should be doing this in all communitie­s.

[santai]

09:28 AM on 08/28/2010

In other countries, the government pays for the health care insurance for new business owners until their revenue exceeds a certain level. That would encourage people to start businesses­.

[HCMon]

09:09 AM on 08/28/2010

It would be most useful to make the process for raising money more transparen­t and accessable­. I have nearly completed a Regulation D private placement to raise money for a start up. I have spent much more on legal fees than I have on product developmen­t so far. Standardiz­e a Private Placement Memorandum template and make it easy for start ups to connect with Angel Investors. The legal nonsense creates an expensive barrier.

[jabailo]

07:14 AM on 08/28/2010

This is absolutely the right thing -- and the only thing to do to "jump start our economy" (I wrote a diatribe on the economy as car as the world's longest running extended metaphor).

We should not restrict this recapitali­zation of the middle class to just small retail. We need to be pumping out thousands of new startups -- dwarfing the dotcom boom of the late Nineties. If should be as easy as pie to go to a web form, make a request, and receive $100,000 in start up funding.

I would set this up before I ever raided the Treasury for TAARP to refloat the dinosaurs.

[clintonius]

05:11 AM on 08/28/2010

The only problem is that Clinton's trade policies and neoliberal­ism in general is what created much of the current economic strife. Maybe he could take some of the 5million bucks for his daughter's marriage to a Goldman Saxer and use it to help some of these struggling families.

"At CEO, we recognize that the American Dream -- earning a good living and giving future generation­s the opportunit­y to better their lives -- has become harder to achieve."

Maybe you should have thought of that before passing NAFTA and deregulati­ng the banking system. And now Bill Clinton is masqueradi­ng as an advocate for struggling families? Poppycock.

[Blutodog]

10:39 PM on 08/27/2010

Clinton for small anything? LOL! Here's mr. free trade now trying fix some of awful damage his short sighted policies created.

[paddio]

10:01 PM on 08/27/2010

The comments here are far and away the most obtuse and out of touch crap I have ever red here at the HP...we need real jobs for working men and women now!!!!! Philosophy can wait...the utiity bills, the rent, the grocery bills, the medical bills can't wait. Sorry.