Joe Blakely went from earning $10 an hour as a nurse’s assistant to making $52,000 a year as a one-man window-cleaning, windshield fix-it shop and janitorial service. He’s made enough money over the last 15 years, he says, to support his family and even to buy a couple of rental properties.
Blakely would be the first to tell you being self-employed isn’t easy – he works long hours– but he loves being his own boss, and his flexible schedule enables him to help take care of one of his children who has health problems.
The program, which is offered through the five regional community action councils, has helped to establish 1,700 businesses statewide.
“I have that flexibility to come and go as I please, so I can meet the needs of my family,” Blakely said one evening last week before he was scheduled to clean the Washington County Superior Court. “When you provide services, you have a solid income forever.”
Blakely’s entre’ into entrepreneurship came from the Micro Business Development Program, a business startup training program designed for low-income Vermonters who want to launch a sole proprietorship or a business that employs several people.
The program, which is offered through the five regional community action councils, has helped to establish 1,700 businesses statewide.
Blakely said the Central Vermont Community Action Council’s Micro Business Development Program helped him figure out how to organize his business records, develop a marketing plan and get started on the right foot with the tax man. In addition, the program helped him obtain $2,000 in loans for the ladders and other window-washing equipment he needed.
On the chopping block
The Micro Business Development Program is one of the economic development services partially funded by the state that is on the chopping block as part of the Challenges for Change government restructuring plan.
Micro Business Development Program fact sheet
Community Action Council representatives say it’s ironic that funding for this program, which has helped hundreds of Vermont families get out of poverty and dependency on state assistance, has been targeted for elimination by the Agency of Commerce and Community Development in its Challenges proposal.
Next year, support from the Legislature for Micro Business – and a handful of other programs – will likely dry up completely, committee members said, because of the state’s ongoing fiscal crisis.
Council officials describe aid for Micro Business as a one-two punch: It simultaneously saves the state money on assistance programs – and turns Vermonters once dependent on state services into taxpayers.
As of last Friday afternoon, the Senate Economic Development Committee had managed to restore $150,000 out of the $328,000 in grant money the program typically receives from the state, a $178,000 cut that will result in layoffs and losses in federal funding, according to council officials.
Next year, support from the Legislature for Micro Business – and a handful of other programs – will likely dry up completely, committee members said, because of the state’s ongoing fiscal crisis.
Vermont’s Micro Business program one of the oldest in the nation
Micro Business serves about 800 Vermonters in a given year through the five regional action council offices, and this year, because of the deepening of the recession, Hal Cohen, executive director of the Central Vermont Community Action Council, said they will likely serve 1,000 people.
In an average year, the program helps to launch 100 enterprises, expand 29 businesses and leverage $1.16 million in financing for clients. The average startup loan is about $8,000, according to a program fact sheet.
Cohen, in a recent Vtdigger.org oped, wrote that it costs about $2,700 to provide one-on-one, entrepreneurial training to low-income Vermonters, many of whom have financial literacy problems. By contrast, state tax incentives for job creation at large companies can cost as much as $15,000 per employee.
Since Micro Business was founded in 1988, the program has “enhanced” the self-sufficiency of 9,000 Vermonters. Fifty-five percent of the clients who sought Micro Business training at the Champlain Valley Office of Economic Opportunity (one of the five council locations statewide) had incomes at or below 100 percent of the federal poverty rate, which for a single-person household is about $10,000, according to Jim White, who runs the Micro Business program at CVOEO. White characterized participants as “not strong in literacy.” The program counselors assess the skills of the clients and help them get the basic services they need – job training or Adult Basic Education – before they move ahead with business planning.
“Virtually all of the clients we work with have no experience with a business, and they typically have a desperation to earn money,” White said.
“More than half of our clients are women,” White said. “Women still represent the vulnerable end of the population.
“Virtually all of the clients we work with have no experience with a business, and they typically have a desperation to earn money,” White said. “What separates us from the Small Business Development Centers is, we don’t just hand them a business template and say come back to us. We offer very intensive one-on-one training.”
White said because the programs are “co-located” with the regional anti-poverty agencies, counselors can assess what a family needs to make a business successful. If warranted, the programs help to stabilize clients’ finances through fiscal management and credit counseling, and, if necessary, counselors refer them to the Three Squares (the food stamp program) and general assistance.
“We’re plugged into resources, as well as the business knowhow,” White said.
Kevin Dorn, secretary for the Agency of Commerce and Community Development, has proposed folding in the Micro Business with the Vermont Small Business Development Center programs. He says the two groups, which sometimes collaborate and refer clients to one another, provide duplicative services. Before funding was partially restored for the program, Dorn suggested that $300,000 from the economic development Challenge be spent on training for VSBDC counselors — about the same amount the state grants to Micro Business in the first place.
Lenae Quillen-Blume, state director for the Vermont Small Business Development Centers, said in testimony to the Senate committee that her organization could absorb an additional 800 clients a year from Micro Business. She said VSBDC would take care of their business planning and send them to the community action councils for other programs.
“We are not a social services agency,” Quillen Blume said. “Our mission is business development. When you’re counseling a client, you may get into other issues. We stay focused on moving the business forward.”
Blakely said he didn’t consider going to the local Small Business Development Center office because it was too intimidating. He prefers the community action program because he says he feels more at home there, and he continues to get help with issues that come up in his business.
“I think it’s just more specialized resources for smaller businesses,” Blakely said.
