“Hope is not a business plan,” instructor James Dunn told 18 aspiring entrepreneurs the night I sat in on a business training class at Washington Community Alliance for Self-Help (Washington C.A.S.H.), a Jolkona partner. He ought to know: one of his early business ventures involved selling art posters for $3 each â€” until he realized it was costing him $5 each to produce them.
Now James teaches low-income entrepreneurs how to avoid the mistakes he made in his early years of business â€” and emulate his later successes â€” through Washington C.A.S.H.’s eight-week business-development training (BDT) course. Each quarter, Washington C.A.S.H. offers the BDT series in several locations in Western Washington, as well as sections in Spanish. I attended week two of the training, which jumps right into the main purpose of any business: Make money.
Learning to be realistic â€” and smart
When the class started to analyze several participants’ businesses, it was clear why new entrepreneurs should start crunching numbers early. Some had expenses that put them solidly in the red, and few were happy with the net profits they estimated. “I won’t be retiring in Italy on that,” lamented one participant. About 40 percent of participants will end up changing their original business idea, according to James.
Throughout the class, James urged participants to be realistic and honest with themselves, but he also emphasized how much an entrepreneur can control through smart business design. “Can you charge as much as you want for anything?” James asked the class at one point. His surprising answer: “Yes, but your price has to match the value you provide.” The most important thing for the participants to gain from the course, James told me, is “confidence . . . and knowing that they can achieve success.”
I came away from the evening with the message that as a prospective entrepreneur you have to wield a sharp pencil, but if you plan your business carefully and provide value that customers are willing to pay for, you have a fighting chance. In fact, 95 percent of BDT graduates who already had a business when they started the course, and 63 percent of all graduates surveyed (including those who started with just a business idea) were still in business 18 months later, according to a recent independent evaluation by the Aspen Institute. Three quarters of graduates surveyed reported an increase in income. Especially in a tough economy, that’s an impressive outcome.
Classes are just the beginning
In addition to the classroom experience, BDT participants have access to one-on-one mentoring with volunteer coaches. They also get lots of support from each other. “The business owners learn to foster and contribute to each other’s success,” said James, “and share all their talents, knowledge and community resources.”
Graduates of BDT are eligible to participate in peer business groups that meet twice a month for networking, guest speakers and mentoring. Business group members also have access to advanced training and may apply for Washington C.A.S.H. loans of up to $35,000. In addition, Washington C.A.S.H. offers venues for their clients to sell their products and get hands-on training in retail product development, pricing and presentation.
How you can help
Washington C.A.S.H.’s services are free or very low cost for income-qualified clients. Most of their clients are women; more than half are minorities, who have disproportionately high rates of unemployment. Compared to other microenterprise development programs, a much larger proportion of Washington C.A.S.H.’s clients are below the federal poverty level.
You can help a low-income person gain the skills to become a successful, self-sufficient business owner. Consider sponsoring an entrepreneur to attend a day-long training, the entire BDT course or a business showcase event.
And stay tuned for an interview with one of Washington C.A.S.H.’s clients who is now a successful business owner supporting her family.