08/21/2012 11:44 am ET Updated Oct 21, 2012

NFTE Solutions: A Pioneering Entrepreneurial Group Business Program for Low-Income Youth

My fundamental belief was, and remains, that the craft of small-business ownership holds the solution to creating sustainable employment for young people, particularly those in marginalized economic scenarios. In the late 1980s NFTE had set up and operated with the Boys and Girls Clubs, a student-run restaurant in Newark, an outlet of the Jersey Mike's franchise. The project had its ups and downs, eventually closing due to lack of sustainable funding. However, with massive media coverage, it brought to national awareness the potential of entrepreneurship programs for low-income youth.

So I resolved to take on the project of establishing another group run student-run business that could be replicated around the country, and even internationally. I investigated the top experts in the field of running businesses for at-risk young adults. One name kept coming up: Max Blake. I had heard about him for years. He ran a number of programs that taught business skills to low-income and minority youth. We met, and quickly became friends and then partners. (I should mention that Max was an imposing individual; he was six foot nine and had a flamboyant beard and mustache.)

In late 1994 we incorporated NFTE Solutions. We wrote a business plan outlining how we could set up a combined salvage and computer-repair business that would be operated by teenagers newly released from jail.We decided to insulate NFTE -- which has always specialized in teacher training and curriculum development -- from legal liability with respect to NFTE Solutions. Next, we met with the principal of the high schools at Rikers Island (the largest jail in America) -- three for boys and one for girls. I had taught there for years on weekends through the John Jay program, so I knew the environment well. Soon NFTE Solutions had a partnership with the facility.

The top students from the newly formed entrepreneurship class at Rikers would join the NFTE Solutions project that would salvage computers and other items, repair them, and sell the refurbished merchandise. The kids would learn the skills of computer and appliance repair, as well as the basics of running a small business. After financing the plan, Max found a 4000-square-foot space at 149th Street and Third Avenue (it had previously been the Bronx Board of Trade). Under Max's leadership, a lease was signed; he rented two storefronts for the retail part of the operation. Max -- a true hero -- then obtained a van to pick up the kids from the street corner in the drug-infested neighborhood where they were officially dropped off by Rikers personnel at 6:00 a.m. on Sunday mornings, leaving them each with two subway tokens and $5. (This seemed to be a system that was designed to perpetuate a cycle of incarceration.)

Max would take the kids to a foster-care home and have them report for work at our facilities on 149th Street on Monday morning. I would give daily lessons on aspects of entrepreneurship and small business, and an orientation to what NFTE's vision was all about: entrepreneurial literacy as a way to do better in school and in the job market. We insisted each student enroll in GED programs so they would someday graduate from school.

Our students were on payroll from the start, and the positive effect was marked and noticeable. We set up two retail stores and a classroom. Starting every day at noon, and under city contract, the NFTE Solutions kids would go around the neighborhood, with adult supervision, looking for anything of value. They would then load the van and head back to our headquarters and arrange the salvaged goods by category. Each category would have an expert that would come in and teach the kids how to fix up salvageable items. The students would learn how to evaluate and fix the key pieces so they could be resold. We soon developed a specialty in computer repair. One of our young people, Tyrone, was particularly adept and soon started his own salvage business, thereby becoming a competitor. We were, of course, delighted!

The students worked on salvage gathering in the mornings and in the afternoons on their own respective ventures selling one of the products that they had learned to repair. Each student had their own office in the business incubator we had set up on the second floor. Soon even the academic classes became self-operating, with students giving presentations on particular areas of small-business expertise. After individual presentation the group would collectively on solving a business or personal problem for each student. Peer learning and team building happened organically. Soon the students were taking initiative and started to use their voting power to drive policy at NFTE Solutions. One day I was late and the young workers/entrepreneurs had held a board meeting electing one of their own as board chairman and picking a new CEO who promised to put more money into marketing, pay dividends from the profits and to bring in more relevant guest speakers. I was shocked but happy. They were learning the power of ownership and the thrill of driving policy.

Max and I encouraged the kids to inventory their skills and then think of a business that they could start based on their strengths. This we called the internal method of opportunity recognition. We then had them look for opportunities in the marketplace. This was the external method. The students worked on salvage gathering in the mornings and in the afternoons on their own respective ventures in the business incubator we had set up on the second floor.

Learning from our experience with Jersey Mike's, NFTE carefully documented the project, and had programs both in the jail and on the outside as well. In the Jersey Mike's project, the training program was only for young people while they were incarcerated.

NFTE Solutions was an incredible success, and we worked with dozens of children each year for several years. Each learned entrepreneurial skills, and either started a business or found employment. All were required to re-enter school. We used many of the insights that we gained in this effort to help NFTE's replication around the world as well as to make our program even more experiential.

Sadly, we did not plan for succession and when my partner, the tirelessly enthusiastic Max Blake, decided to change his life and move to New Jersey to teach at Ramapo College, I was unable to sustain the program. I simply did not know enough about the ins and outs of the salvage business or computer repair. So we closed our doors, thus ending another fascinating chapter in the development of the field of low-income youth entrepreneurship.

Hopefully someone will figure out a model of how to integrate incarcerated young people into small business. I believe it holds the key to alleviating the re-entry issues of this segment of our population into the economy.