BSG - Pilot Program

Background for the Austin BSG Pilot

Introduction

The City of Austin has chosen to work closely with up to two intermediaries that will serve as welcome centers for BIPOC entrepreneurs seeking information about possible resources to start and grow their businesses, space to perform and showcase their products, and a networking venue. This model is in part based on the Flanner House Ujamaa Bookstore in Indianapolis. The Flanner House Bookstore is located on the property of a Community Center in NW Indianapolis.

businesses across the country. The store offers a performance stage for cultural events and school supplies for local children.

It was formerly a public library that was shuttered and closed. Regionerate worked with their client to leverage CDBG dollars from the city to renovate the space and establish a social enterprise with books by Black authors and about African Diaspora. The store also features works by local artists and imports products made by Black

The manager of the bookstore provides one on one mentoring to the small businesses that use the store for pop up retail. The featured entrepreneurs are required to work one day per month to help lower the overhead cost of running the store. In doing so, they have the opportunity for “customer discovery”, asking customers what they like about a product. They also get to test the market with very little financial risk before moving to a more permanent space.

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Featured black authors book display at Ujamaa Community Bookstore / Flanner House Rohini Townsend, Manager of Ujamaa Community Bookstore / Flanner House organizing new product Local ethnic fashion designs displayed on the rack at Ujamaa Community Bookstore / Flanner House

Creating a Front Door

Entrepreneurial Ecosystems are difficult to navigate, and small business resources are not always transparent. Imagine if the Austin BSG Pilot created a “front door” for BIPOC businesses where they can access information about existing entrepreneurship support programs, such as Small Business Development Center Training, City’s Procurement Opportunities as well as referrals to Third Party Black Service Providers, such as Financial, Legal, Web Design, Marketing and Branding, Staffing, Event Planning, and Transportation, Distribution, and Logistics.

together the pillars of the entrepreneurial ecosystem under one umbrella.

Those pillars include: (1) entrepreneurs: (2) culture and communications; (3) access to capital and in-kind resources; (4) talent; (5) peer mentors; (6) social capital and relationships; (7) retail space.

Specific activities would be based on those needs and include entrepreneurial training programs, financial literacy, banking readiness, conversion to the formal economy, and support for scaling business. Austin would plan a series of business plan competitions for both startups and existing neighborhood businesses to help build a

The Austin venue could very well serve as a space for early stage and scaling entrepreneurs to access culturally sustaining coaches and mentors who agree to be on site during certain hours. If space allows, subject matter experts can offer weekly lunch and learn sessions on topics of interest. They might also share “stories from the field”. CDFIs, Banks, and Social Impact Investors could offer feedback on business pitches. Austin BSG’s initiative brings

pipeline of entrepreneurs who will then be able to avail themselves of other support activities and services offered by a set of core partners. Winners of these competitions receive a package of financial and business support to move their business through obstacles and into growth. For example, a common request from small businesses is assistance with lease negotiation. Legal support for lease negotiation is included in these packages.

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Services, Stages and Needs

Depending on their stage of the organizational lifecycle, businesses need services that are “rightsized” for them. In other words, “one size does not fit all”. Along with the continuum of care, there are spaces created to serve entrepreneurs in a variety of industries and at numerous stages of growth.

Therefore, in designing offerings for participants, Austin could offer diverse sets of resources that span proof of concepts from stage to growth. In earlier stages, BSG programs could offer introduction to the Business Model Canvas, a tool that is available at no cost from Strategyzer under a creative commons license.

It is a visual framework that allows a business owner to capture their key customer segments, value proposition, key activities, partners, sales channels, revenue streams, and costs on one page.

Access to Capital

At the earliest stages, an entrepreneur might be interested in how to qualify for capital and types of financing available. Capital providers could require financial forecasting and cash flow analysis and a financial bootcamp could be for Stage I companies. Lines of credit for businesses with a Purchase Order but need cash to buy supplies up front can eliminate a major barrier for startups. Stage 2 companies with 2-10 employees and some revenue may need growth capital, including debt, equity, revenue-based financing. Ideally, they can leverage a capital stack that reduces their debt burden and allows them to maintain ownership in their businesses.

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Small Grants

In the early stages of its life cycle, a startup business often needs a relatively small amount of money to achieve a milestone or to surmount an obstacle. For example, money may be needed to obtain a prototype or to hire a website designer. That money is very difficult to come by for many businesses.

Grants between $1,000 and $5,000 could be made through an application process, juried by community organizations (for community-based businesses), CDFIs, and other partners. Criteria for the grants may include importance of the business to the community or the city, probability of business success, willingness to participate in business support activities, likelihood of follow-on funding, etc.

Customers and Buyers

New businesses need introductions to their first, second, third, and primary customers. If the entity is a service business, they will need to put in place contractual documents (another area that could be the topic of an educational event or mentoring session). In our experience, young firms need high touch support in identifying their ideal customers and moving from marketing to their first sale.

Buy Local

Austin might offer a “buy local” campaign for BIPOC entrepreneurs. Their products can be showcased in public spaces, underutilized storefronts, cultural festivals, etc. The city could also feature BIPOC entrepreneurs of the month on their website to provide more exposure and celebrate successes.

If a more mature business is interested in becoming a supplier to the government or major corporations, Austin might consider offering workshops on how to become certified as an 8A and MBE firm. Supplier Diversity Councils and Minority Chambers often provide these services to their members and can recommend multiple pathways to enter acquisition pipelines.

Access to Talent

Another area of need for entrepreneurs is access to talent. This might include management talent and entry- level workforce. Linking high school and college internship programs to the BSG effort would provide youth an opportunity to consider entrepreneurship as an alternative to traditional employment and offer the entrepreneur the ability to work more “on the business” vs. “in the business.”

Entrepreneurship Fellows

The Entrepreneurship Fellows Program leverages college graduates to support community-based startups. For example, a fellow may have skills in development and use of social media. That individual will be deployed on a project basis to startups needing that skill. As a result, fellows will gain exposure to multiple startups, and startups will receive expertise in different areas on an as-needed basis.

Youth Entrepreneurship

The Youth Entrepreneurship Program may involve going into city schools with a basic after-school curriculum for learning about entrepreneurship as an alternative to job-seeking. It could include workshops and one-on-one sessions.

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This would help increase and measure interest levels, guided exploration of business ideas, basic entrepreneurship practices and principles, outside speakers and pitch opportunities.

Internships

Austin might consider a robust internship program for post-high-school students. Internships are already frequently used by both nonprofits and for-profit partners, as a means to expose young people to the entrepreneurial support environment and for the organizations to benefit from seasonal or peak demand work.

Conclusion

In all the stated examples, the entrepreneur’s needs must be front and center, with programs tailored and customized to meet them where they are at their current point in life Austin can create positive economic impacts for local BIPOC businesses by leveraging Living Cities grant dollars to offer resources that mitigate the most significant barriers to entrepreneurs of color: (1) Understanding How to Navigate the Ecosystem; (2) Access to Customers and Markets; (3) Access to Capital; (4) Access to Talent; and (5) Access to Quality Connected Space.

Austin could play important roles of the convener, connector, resource broker, and ecosystem navigator in this BSG Pilot scenario. Although there is no “cookie cutter approach”, we hope that the Flanner House Community Bookstore and other examples provide a starting point to launch your “learning by doing” BSG journey.

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