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By Marsha Bailey

Cutting a budget isn’t easy.  Whether you’re a small business owner, a non-profit executive or a local government manager, making cuts is hard.  It’s hard because in small organizations, we don’t see the line items on our budgets as numbers, we see them as people.

There is much discussion in Washington, D.C. about cutting waste and inefficiency, eliminating duplicative programs and making tough choices.   Most of this is just high-sounding posturing – a smoke screen for a process that has become more political than practical.

Those who are eager to congratulate themselves for making “tough choices” see numbers, not people.

A good example is the proposed cuts to the Small Business Administration’s programs which assist the country’s smallest businesses.  And by “small business” I don’t mean 500 employees.  I mean five or fewer employees – those businesses classified as micro enterprises.  According to the government’s own data, after the recession following 9/11, 79% of the net new jobs came from businesses with four or fewer employees.  Yet both President Obama and Congressman Sam Graves, chairman of the House Small Business Committee, want to cut technical assistance and training programs that benefit precisely those business owners.  Their rationale: a majority of assistance is provided to prospective borrowers, many of whom do not become actual borrowers.

News Flash: Many business startups, particularly in the service sector, don’t need loans – but they do need training and technical assistance.  This is especially true of micro entrepreneurs who are often creating their own job to replace the one they lost in the current economic meltdown.

Congressman Graves recently stated,  “There isn’t a federal agency that should be immune from cutbacks and fiscal discipline and the Small Business Administration is no different.”   He says reducing the deficit by cutting “out-of-control” government spending will help spur economic growth and job creation, rather than taxpayer-funded small-business programs.

I think the Congressman is wrong on both points:

1)      Some agencies should indeed be immune from cutbacks.  Those that help create jobs should not be cut for two compelling reasons:  leverage and outcomes.  My organization leverages our SBA funding at nearly a 4:1 ratio.  85% of the leverage comes from private funds and 15% from other government sources.  Overall, only 35% of our total budget comes from public funds.   What does the government get for that?  The clients we serve in just one year create and retain nearly 400 jobs.  Those businesses generate over $1.4 million in state and local tax revenues – more than our entire annual operating budget.  We estimate that our programs return $12 to the economy for every dollar we spend.

2)      The assumption that cutting government spending is a more effective strategy for spurring economic growth and job creation simply has no basis in reality:  See 1936.  Cutting programs that support entrepreneurship is equivalent to what farmers call “eating your seed corn.”

Duplication?  The SBA’s Women’s Business Center and PRIME (Program for Investment in Micro-Entrepreneurs) Programs were created because the existing Small Business Development Centers (SBDCs) did not meet the needs of this rapidly growing group of economically and socially disadvantaged business owners.   These programs receive a fraction ($14 million and $8 million respectively) of the allocation – $113 million – that SBDCs get.

Organizations serving disadvantaged clients must patch together a number of different grants in order to fulfill the need for their services.  That’s not duplication.  President Obama’s 2012 budget, like George W. Bush’s, zeroes out PRIME.  Congressman Graves has suggested eliminating Women’s Business Centers.   This “last in, first out” strategy merely extends long-established patterns of economic injustice.

As for tough decisions?  Since when was picking on the weakest, poorest, and not coincidentally, the most powerless in our society a tough decision?

Marsha Bailey is the Founder and CEO of Women’s Economic Ventures, a   twenty-year-old non-profit organization dedicated to creating an equitable and just society through the economic empowerment of women.  Her organization receives funding from three different SBA programs. The opinions expressed in this article are her own and do not reflect the viewpoint of the SBA or its employees.

MICRO ENTERPRISE STORY TEMPLATE
DEVELOPED FOR CAMEO
By Joel ben Izzy © 2011

The world of Micro Enterprise development is filled with stories.  In fact, there’s a tale to be told behind every loan we make and behind every business that succeeds, adds a new product or service, or creates a new job.

With so many stories in the universe, it’s easy to lose track of them.  This template will help your organization keep track of its stories, which can be shared with many audiences – funders, potential clients, your staff, and the media and the general public.  Also, we invite you to share your story with CAMEO, whose job it is to tell the world your organization’s story as we continue to advocate for the great work you do.

In addition to tracking stories this template also will help you put these stories to use.  Of course, a central purpose of these stories is to remind us of why we come to work.  But there are more nuanced messages in these stories that can serve strategic purposes as we convey a variety of messages to various audiences.  For example, your story should make one or more of the following points:

• CAMEO members create jobs.
• Money invested in a micro enterprise organization translates to job growth.
• Because banks aren’t lending, community based lenders have stepped up to serve Main Street, as well as the side streets and back streets.
• The business training and technical assistance we provide is as important as capital, if not more so.
• Good management decisions are the foundation of business success.
• Successful businesses transform neighborhoods.
• Your work contributes to the California Dream of entrepreneurship.

Though this template has the basic information to capture your story, you might want to switch the order around a bit.  For example, you might want to say “About a year ago Charlie walked into my office.”  You could then tell a little about his story, then flash back to tell us about the time and place when he walked into your office, what he wanted and so on.

Organizing these elements in this simple form will make the story much easier to work with, whether you ultimately put it in writing, tell it in person or both.

We also encourage you to incorporate photographs or videos, which are worth at least a thousand words.  Keep a camera or “Flip” with you at all times!

Telling the Story of Micro Enterprise

We suffer from the ‘cold dead fish’ problem.  That’s the problem of the delicious sushi restaurant owned by a really nice Japanese couple with awesome service and great prices that’s empty.  Why? It might have something to do with the sign out front that says “We Sell Cold, Dead Fish.”

With that in mind, Joel ben Izzy taught a room full of CAMEO members how to tell our story so that it grabs people.  A few takeaways…

• When asked what do you do, don’t start with “I work for a non-profit…” and then spout your mission statement – that’s the ‘cold dead fish’.  Instead, say, “Can I tell you a little story? People will usually say sure. Once you get permission, then you can launch into a story.
• Avoid certain words like “non-profit” and “help” – we aren’t charities and the people we partner with might need some education, but they aren’t helpless.
• Know what your audience needs – different audiences will want to hear different things. Funders want to hear that you educate people so they will suceed.  Policy makers want to know that microenterprise creates new jobs.  Potential clients want to know that they can trust you. These are just some of the messages we talked about that we want to get across.
• To get around the problem of obscurity of microenterprise in the public eye or the misconception that it’s an international phenomenon, connect microenterprise to something that people know – their drycleaner, the butcher, the baker, the candlestick maker, i.e. micro enterprises are EVERYWHERE.
• When you want to encourage a behavior use a positive story, when you want to change behavior, some combo of the carrot and the stick is a good thing.
• People like stories that validate their own story.

And now a few tips for storytelling.  There will be more to come.

First thing you do is set your time and place.

Once upon a time, well we don’t really say that in the workplace, so instead of triggering your story with “Once Upon a Time,” preface it with “About…” as in “About a year ago.”  Something like:

About a couple of years ago, right in the beginning of the Great Recession, a woman named Martha walked into my office.  She had been laid off from her purchasing job at Macy’s.  She had just bought a condo in downtown Oakland and had no idea on how she was going to make her mortgage payments now that her savings was dwindling.  She had been looking for similar work for 6 months, but no one was hiring.  She loved working in the clothing industry because she loved fabrics – the feel of silk and the warmth of wool.  She had made some of her own clothes and had gotten lots of compliments on them.  For fun, she took her clothes to a crafts fair and made about $1,000.  … (to be continued

Heidi

Claudia Viek has been making the case to California legislators for restoring technical assistance funds in the FY 2011 . Here she is with Nancy Pelosi’s Chief of Staff – Terri McCullough and Legislative Assistant – Liz Miller.  They’re in the Rayburn Room with George looking on.

I arrived in Washington on Sunday where I initially sought to build the case for TA but I came away realizing we need to fight for our very existence! Federal funds for our programs are dangerously close to ending up on the cutting room floor. I will need your help to make sure that doesn’t happen.

We know that TA is a necessary element of job creation through very small businesses. In order to take advantage of loan money and microlending, borrowers need to be loan-ready. They become ready through the TA and business management training that you offer.

I think the SBA is beginning to get the message about the need for TA. My impression is that those within the SBA’s Capital Access Program recognize that the success of the new Community Advantage program depends on good front-end and post-loan TA – where success is measured by good loan performance and low defaults.

The next step for the SBA is how to pay for it. One way to pay for it is through loan volume. And the SBA needs to realize that it takes time to achieve enough loan volume to financially support the training activities.

The perception in SBA and the Small Business Committees in the Senate and House is that programs overlap and are duplicative and that they need to be consolidated to respond to Congressional pressure – and Obama pressure – to relieve the deficit. “We have to cut somewhere,” replied top SBA officials. So TA is the target for cuts. They believe that SBDC’s and SCORE could provide the same services as Women’s Business Centers, PRIME and the RBEG grants in rural areas.

Duplication is a bogus argument. The above-mentioned programs serve different populations. You wouldn’t cut a community college’s budget because there’s a university in town. We have to be relentless in advocating for TA – to define it, to communicate its cost effectiveness, its reach and its depth in stimulating new business and new job growth.

TA funds need to be restored. We need to urge the SBA to stand up for Micro Enterprise and hold ground on the budget. We need to urge the SBA leaders to demand a serious budget conversation, one that includes cutting a tiny fraction of the tens of billions in wasteful defense spending instead $10 million for programs that create jobs.

As always, CAMEO will continue to fight the good fight, but we do need your help.

(Earlybird registration deadline is April 1!)

Join Claudia, Shufina and Heidi in Washington, DC from May 2-4 for the most important microenterprise conference of the year: AEO’s 20^th National Microenterprise Conference. Hundreds of other leaders from the non-profit, corporate and social investment sectors will gather for three days of dialogue, networking and learning in the heart of our nation’s capital.  Senior Administration officials and legislators will participate throughout the conference.  It has neve rbeen more important to demonstrate our strong, national constituency to enable us to score critical policy wins to keep vital programs and loan dollars available to your organization.

AEO is a national member organization that represents the interests of small, typically under-served, entrepreneurs throughout the United States. Hundreds of your peers in “state” and across the country are active in AEO. AEO works with us and similar organizations around the country to shape national policy, secure funding from national sources and share best practices.

WHY ATTEND AEO’s 20^th ANNUAL NATIONAL MICROENTERPRISE CONFERENCE?

• Ensure that senior Administration officials and members of Congress hear your voice and see the invaluable work you do in your community at this critical time.

• Learn what it takes to build and lead an investment-ready microenterprise institution in an increasingly competitive funding marketplace.

• Prepare to respond to opportunities for your clients presented by the changing healthcare landscape.

• Discover opportunities for innovative partnerships and new business models, products and services as you meet hundreds of peers, potential partners and funders/investors.

Expect an exciting and dynamic lineup of speakers, workshop facilitators and participants. In addition to plenary sessions and town halls, the agenda includes more than 20 hands-on workshops with titles such as “Performance and Funding,” “Policy and Advocacy” and “Client Capabilities.”  In prior years AEO has welcomed more than 600 participants and speakers including Muhammad Yunus, Hillary Clinton and Karen Mills. The 20^th anniversary conference will not disappoint!

WHEN, WHERE AND HOW MUCH?

• Monday, May 2 – Wednesday, May 4 in Washington, DC at the Omni Shoreham Hotel
• Conference registration special rate for CAMEO members: $450 through April 1
• Special hotel rate at Omni Shoreham available through April 8. Click here for information
• Conference scholarships may be available

CLICK HERE TO REGISTER NOW

We know that budgets are tight and spending on a conference may seem like a hard choice. That’s why CAMEO is offering scholarships.

Think of your participation as an investment in the industry, your organization and most importantly your clients.

For questions on the CAMEO scholarship, contact Shufina English.

For questions on the conference, visit the conference site or contact Matthew Crandall.

CAMEO member California Resources and Training (CARAT) is looking for collaborative partner(s) to implement the Sustainable Broadband Adoption grant, Access to Careers and Technology. The partner(s) will provide outreach support and host regional small business technology trainings on the benefits of using software to enhance small business operational efficiencies that will positively impact the company’s bottom line.

Eligible prospective partners that have a track record of a minimum of three years of consistent services in the target service area (LA Metro area) and demonstrate a portfolio that consists of a majority of small businesses with the targeted Asian, African American, and Hispanic ownership should submit a Request for Proposal.

Please follow all instructions in the RFP carefully. Proposals may be submitted via email (preferable), USPS mail, or via courier. The deadline is March 31, 2011.

The grant comes from from the California Emerging Technology Fund (CETF) and the Broadband Technology Opportunities Program (BTOP) of the National Telecommunications and Information Administration (NTIA), US Department of Commerce.

Contact Information:
Irving Sambolin
California Resources and Training (CARAT)
1333 Broadway, Ste 604
Oakland, CA 94612
Voice: 510.267.9659
Email: projectassistant@caratnet.org

Mark Nemanic, Executive Director of 3CORE, told me the other day that he had to turn back $750,000 in capital that he was going to lend out to small business because he didn’t have a pipeline of loan-ready businesses waiting for cash. I was shocked! Imagine what the $750,000 could do for Butte County and the local community.

Mark’s story illustrates the absolute necessity of business and technical assistance. Many of our clients’ businesses don’t qualify for regular loans from the bank and don’t have any home equity to put up for collateral. They need a hand to get up to speed and become loan ready.

When businesses get training and support, they run more smoothly and pay back their loans. They become better customers for the banks. They stay around for a while (80% success rate!) and they create jobs. A one-person business creates two additional jobs within three to five years on average.

Business assistance goes beyond financial statements. Miss Saigon, a Vietnamese restaurant in San Francisco, had help from Urban Solutions with a comprehensive energy, water and waste evaluation that saved $17,000 – real, tangible boost to the bottom line!

Technical assistance funds are in danger. Congress has already cut $49 million in earmarks from DOL’s Training and Employment Services and $173 million from HUD’s Economic Development Initiative for FY2011 – money we could use for training. And 2012 doesn’t look any better.

We need to change that.

That’s why I’m going to Washington, D.C. on Monday (March 14). I will raise these issues and advocate for the preservation and enhancement of cost efficient and effective programs that support entrepreneurship and job creation. I have meetings scheduled with key Congresspersons. I will attend a Treasury conference – “Access to Capital Conference: Fostering Growth and Innovation for Small Businesses” on March 22, 2011. The conference, hosted by Secretary of the Treasury Timothy Geithner, will explore how the public and private sectors can promote access to capital at each phase in the lifecycle of small companies looking to grow. You can be assured I will be raising my voice loudly about technical assistance for the very small business sector.

Please email me your thoughts or stories about how technical assistance has helped your clients.  Be assured that all of us at CAMEO will continue our fight to create jobs in California.

At first glance, I was upset about the Government Accountability Office (GAO) study that appeared to question the $6.5 Billion expended last year on entrepreneurial activities by a wide range of federal agencies. Among the report’s conclusions is that many of the more than 80 programs that support small business and entrepreneurs administered by the Departments of Commerce and Agriculture, HUD and the Small Business Administration (SBA) are duplicative and some may be inefficient.

After further thinking, I believe that this may be a unique opportunity to promote micro- business entrepreneurship without any loss of funding, if we make the correct strategic decisions and fully understand the nature of the GAO criticisms.

I’m presently undertaking a careful analysis of the GAO study with staff, I believe we can identify the best programs and urge that they be better funded.

The micro-business industry is thriving because of access to capital and business technical assistance.  In California for 2009, CAMEO’s members served 21,000 businesses that supported over 47,000 jobs, most of them start-ups. I’ll say that again.  California’s underfunded micro-business industry created jobs in 2009, when the large corporations were laying off people.  This bright spot in the economy needs to be nourished, not starved.

The GAO report points out that some programs that help micro-business may be duplicative.  To CAMEO, that means that the right thing to do is to reorganize the programs efficiently so that the money can be used more effectively, serve more businesses and create more jobs.

That is why we support the establishment of a centralized center for entrepreneurial programs within the SBA to coordinate resources.  In fact, if the SBA would demonstrate the will and commit to specific programs, we could even encourage the President to create a new cabinet position for the SBA!

I will be in Washington, D.C. during the week of March 14 to raise these issues and advocate for the preservation and enhancement of cost efficient and effective programs that support entrepreneurship and job creation. I hope to meet with key Democrat and Republican Congresspersons as well as Treasury and White House officials.

Please email me your thoughts on this critical issue. Be assured that all of us at CAMEO will continue our fight to create jobs in California.