Very Small Biz Creates Jobs in Sac Bee

Creating small businesses is a key job-generating strategy
By Claudia Viek
Special to The Bee
Published: Tuesday, Jul. 26, 2011 – 12:00 am | Page 11A

The California state budget was passed with a 1 percent cut in the sales tax, with a hope for $8.3 billion in unexpected revenue growth and without Republican support. Assembly Speaker John A. Pérez, D-Los Angeles, said, “We will continue to press the case for new revenues.” Legislators should walk over to 19th and L, home to Ginger Elizabeth Chocolates, to learn one way that new revenues can be created that would receive bipartisan support.

Ginger Elizabeth Hahn always loved to cook and always wanted to be her own boss. When she was 16, she took a truffle class at Sacramento’s Learning Exchange and was hooked. She was trained by some of the best. When it came time to start her own chocolate shop, she needed a loan guarantee and the business training to secure a bank loan. She found both with local microlender California Capital. She opened in 2008 and employs four full-time people in addition to supporting herself and her husband.

Strengthening very small businesses is a key job-generating strategy. While these businesses might be great at dishing up a meal or fixing your car, they might need help with a business plan or a loan guarantee if they are to grow and prosper.

The micro-business generally has fewer than five employees and less than $50,000 in start-up capital. They are everywhere you are – the organic tomato stand at the Saturday market, the home-based child care center, the technology service firm who fixes your crashed computer, your favorite neighborhood restaurant or food truck. These are local jobs that affect our local economies generally twice as much as a national chain.

In California, there are about 4 million very small businesses. If one out of every three businesses hired one employee, we would cut unemployment in half and our state’s economy would recover. With California’s unemployment rate hovering around 12 percent, supporting micro-enterprise is something we must do.

In 2009, members of the California Association for Micro Enterprise Opportunity, or CAMEO, served 21,000 businesses with training, technical assistance and loans. These firms, which were largely start-ups, brought 42,000 new jobs into California’s economy. The businesses created a total of $1.5 billion in economic activity – raising state revenues, decreasing demand for government services and putting more money into local economies.

Businesses are successful when they receive business coaching and assistance with writing a business plan, preparing a cash flow statement, market research and packaging a loan. Business owners that have gone through training programs and receive technical assistance have an 80 percent success rate vs. the 80 percent failure rate of small businesses that don’t seek help. Also, CAMEO member clients who start their own businesses on average create two jobs in addition to their own, over a three- to five-year period.

Providing technical assistance is the most cost-effective way to create a job. The “CAMEO” cost of creating a job averages $1,000 to $3,000 a job. That’s cheap when you consider that a public works infrastructure project costs $50,000 a job.

Recently, my organization along with our national colleagues managed to pull off a miracle in Congress. We were able to persuade a Republican-led Appropriations Committee to allocate twice as much federal money to business training and coaching to very small businesses than the president had requested.

Supporting small, homegrown businesses with technical assistance is a rare nonpartisan issue. It’s a proven job creator. We must make it integral to our state’s economic development policy. We believe that Gov. Jerry Brown also can receive needed bipartisan support if he focuses on supporting local small-business development. We invite Brown to take a trade junket in California, meet these business owners, and catch the entrepreneurial spirit that will reboot our economy.

State Funding Sources for Micro

The following agencies and programs are instrumental for the creation and sustainability of Micro Enterprise development:

California Capital Access Program
The California Capital Access Program (CalCAP) encourages banks and other financial institutions to loan to small businesses that fall outside of their conventional underwriting standards. CalCAP is a form of loan portfolio insurance which may provide up to 100% coverage on certain loan defaults.

California Organized Investment Network
The California Organized Investment Network (COIN) was established in 1996 at the request of the insurance industry as an alternative to state legislation that would have required insurance companies to invest in underserved communities, similar to the federal Community Reinvestment Act (CRA) that applies to the banking industry. This voluntary program facilitates insurance industry investments that provide solid returns to investors and economic and social benefits to California’s underserved urban and rural communities.

California Small Business Loan Guarantee Program
The California Small Business Loan Guarantee Program (SBLGP) works to help businesses create and retain jobs, while at the same time encouraging investment into low- to moderate-income communities. The SBLGP enables small businesses to obtain a loan it could not otherwise obtain, and establish a favorable credit history.

Workforce Investment Act State Discretionary Funds
The federal Workforce Investment Act (WIA) offers a comprehensive range of workforce development activities through statewide and local organizations. Each year California receives a portion of these funds to be used as discretionary funds distributed however the Governor sees fit. Each year, CAMEO requests that a portion of these discretionary funds are allocated towards micro enterprise training and technical assistance. Note: There are no discretionary funds for 2011.

Community Development Block Grant Program
Eligible cities and counties can apply for grants of up to $2,500,000 to lend to identified businesses, or use for infrastructure improvements necessary to accommodate the creation, expansion, or retention of identified businesses.

Department of Rehabilitation Grant
DOR administers several kinds of Grants (RFAs) & Contracts (RFPs) to support services to individuals with disabilities. The Grants & Contracts are primarily for providers or organizations that offer services to our consumers and/or Californians with disabilities.

Download this page as a pdf.

Federal Funding Sources for Micro

The following agencies and programs are instrumental for the creation and sustainability of Micro Enterprise development:

Small Business Administration (SBA)
PRIME (Program for Investment in Micro-Entrepreneurs)
Provides assistance to various organizations that help low-income entrepreneurs who lack sufficient training and education to gain access to capital to establish and expand their small businesses.

Microloan Program
Provides small, short-term loans to small business and certain types of not-for-profit child-care centers as well as provides technical assistance to put borrowers in a position to succeed.

Women’s Business Centers (WBC)
Represent a national network of nearly 100 educational centers designed to assist women start and grow small businesses.

Department of Housing and Urban Development (HUD)
Community Development Block Grant (CDBG)
HUD continues to help local governments undertake a wide range of activities intended to create suitable living environments, provide decent affordable housing and create economic opportunities, primarily for persons of low and moderate income.

Department of Agriculture
Rural Business Enterprise Grants
Provides grants for rural projects that finance and facilitate development of small and emerging rural businesses help fund business incubators, and help fund employment related adult education programs.

Rural Microentrepreneur Assistance Program (RMAP)
Goal is to help new and existing rural microentrepreneurs by providing funds to microenterprise development organizations for microlending and technical assistance to their microloan prospects & borrowers.

Department of Treasury
Community Development Financial Institution Funds (CDFI)
Helps promote access to capital and local economic growth in urban and rural low-income communities across the nation.

Download this page as a pdf.

Unauthorized Immigrants in California

Unauthorized Immigrants in California, Estimates for Counties
Public Policy Institute of California
Laura E. Hill, Hans P. Johnson

California has more unauthorized immigrants than any other state, about 2.6 million. For decades, unauthorized immigrants have been a part of California: in many industries in the economy and in rural and urban communities. But recent and comprehensive information about the numbers and location of this population within California—at the county and sub-county level—does not exist.

Support For AT&T Disabled Vet Program

This afternoon, Claudia Viek and Shufina English will testify at a PUC hearing on the benefits of AT&T’s grant to our Disabled Vet Program.

Below is the Press Release issued by CAMEO member, National Asian American Coalition.


Minority, Business, Church and Consumer Groups Urge a Focus on Job Creation, Small Business Development and Consumer Protections

“Look beyond thyself and examine all the valleys, including Silicon Valley.”
– Yolanda Lewis, Chief Deputy, Black Economic Council

San Francisco, California — On Thursday, July 7th at 6:00 pm, the California Public Utilities Commission will hold the first hearing in the nation on the implications of the $39 billion AT&T/T-Mobile merger (California Public Utilities Commission Auditorium, 505 Van Ness Ave, San Francisco, California 94102).

Led by Allen Temple Baptist Church, the National Asian American Coalition, the Latino Business Chamber of Greater Los Angeles and the Black Economic Council, three dozen community, church and business leaders will testify and urge the California Public Utilities Commission to focus on job creation, small business development and low-income consumer protection issues.

Dr. J. Alfred Smith, Sr., the forty-year Senior Pastor at Allen Temple Baptist Church of Oakland, the leading civil rights church in Northern California, will provide the opening public statement. Dr. J. Alfred Smith, Sr. stated, “Most of AT&T’s rivals and potential competitors, such as Google, Apple and Sprint, have philanthropic records that are an embarrassment. While AT&T may have substantial room to improve, it has one of the best philanthropic records in California, particularly among minorities in the inner city.”

Jorge Corralejo, the Chairman of the Latino Business Chamber of Greater Los Angeles which serves 500,000 Latino-owned businesses in California, said, “Unless it is demonstrated that AT&T’s competitors can do as well as AT&T in serving small minority-owned businesses, our state’s two million minority-owned businesses might be best served by an AT&T/T-Mobile merger. But, I urge AT&T to make a long-term commitment to being the national leader in small business development and job creation (small businesses account for 60% to 70% of job creation in California).”

Len Canty, the Chair of the Black Economic Council, said, “Our organization has protested Apple and Google’s poor records in employing Blacks (one percent) and doing business with Black and other minority-owned businesses. One percent Black is not a solution when our unemployment rate is at 30%. If AT&T is fully committed to the CPUC’s emphasis on diversity of employment and small business opportunities, the Commission should consider supporting the merger if AT&T commits to being the national leader among its competitors.”

Faith Bautista, the President of the National Asian American Coalition said, “AT&T’s competitors are more than Verizon and Sprint. They include the Silicon Valley giants that ignore us but have the power in the long-run to dominate wireless. The Commission must therefore view the merger in the context of how AT&T performs in serving consumers and low-income communities relative to all of these competitors.”

Background Information, based on California Public Utilities Commission and U.S. Department of Labor data

AT&T has one of the best records of doing business with minority, women and disabled veteran-owned businesses. It is a far better record than at Sprint, Apple or Google. Forty percent of AT&T’s contracts last year in California were awarded to minority, women and disabled veteran-owned businesses. In contrast, Google and Apple awarded an estimated less than ten percent to these groups. Sprint awarded only one percent to Blacks and Hispanics. Verizon awarded zero percent to disabled veteran-owned businesses.

Micro Enterprise Is Big at CGI America

The Clinton Global Initiative held its first America conference in Chicago this week. President Clinton explained the purpose of the gathering, “CGI America will bring together leaders from business, nonprofits, and government to develop new ideas for generating jobs now in the U.S.”

Guess who was there?  CAMEO members and friends, including:

  • *Opportunity Fund
  • *AEO
  • *Simonida Cvejic (CAMEO honored her with the first Face of Entrepreneurship Award during our annual meeting)
  • *SF Made
  • *Kiva

In other words, Micro got macro attention.

Former president Bill Clinton and Kiva launched Kiva City, a small-business lending strategy to fight poverty in some of the hardest hit cities in the U.S., like Detroit, Milwaukee and Pittsburgh.

Simonida, CEO of Bay Area Medical Academy, shared how she combined her entrepreneurial drive (listen in at 59:00) and leveraged Opportunity Fund microloan investments to create jobs and train hundreds of people each year for careers in the medical field.

Connie Evans, CEO of AEO, was the voice of Micro Entreprenurship.  We’ll know more of what she talked about next week.

Kate Sofis, SF Made, announced the formation of a national network of regional manufacturing efforts across major US cities called Urban Manufacturing Alliance that will begin with San Francisco and New York City. The effort is an innovative new model for local economic development and job creation.

Photo credit: Adam Schultz / Clinton Global Initiative CGI America Opening Plenary: President Bill Clinton, Founding Chairman, Clinton Global Initiative, 42nd President of the United States; Haley Barbour, Governor, State of Mississippi; Simonida Cvejic, Founder and CEO, Bay Area Medical Academy