Urban Entrepreneur Partnership:
The Key to Scalability Among Minority Firms
Introduction
The Ewing Marion Kauffman Foundation, the world’s leader in the field of entrepreneurship, has commissioned numerous research projects to address the issue of minority business development and growth. Recent studies by the Boston Consulting Group, as well as nationally recognized Professors Timothy Bates and William Bradford examined new strategies for minority business growth and the successful return on investment of venture capital funding in minority business ventures. These studies, as well as others, indicate that the time is right and opportunity ripe for a fresh approach to minority entrepreneurial growth. This approach focuses singularly on the development and growth of scalable minority firms. As such firms grow, capacity is increased, smaller firms are nurtured, jobs are created and long-term economic development occurs. Additionally, smaller firms are sheltered, mentored and can grow. The creation of scalable minority firms became the seminal idea for the development of a new effort in urban communities. Our philosophy resonated well with the business, political, civic and non-profit communities.
Background
In July 2004, President George W. Bush announced The Urban Entrepreneur Partnership (UEP). This followed nearly a year of development involving the White House, Democratic and Republican Congressional leaders, Kauffman Foundation, Business Roundtable, national non-profit groups and a broad nonpartisan group of business owners, experts, community leaders, and other supporters of minority entrepreneurship across the country. Pilot cities were established in Kansas City and Milwaukee. Scalable minority entrepreneurship is encouraged by integrating business assessment, coaching, business training, monitoring and follow-up. Partners are responsible for procurement opportunities and access to financing.
The UEP strategically mobilizes resources of corporate America, major service organizations, the non-profit sector, and federal, state and city governments. The Kauffman Foundation provided the initial funding to support this seminal strategy. Plans called for the Business Roundtable, an association of 150 CEOs of major firms, to provide expert guidance. They are responsible for implementing private sector standards and creating partnership between large firms and urban entrepreneurs, including mentoring and identifying corporate contacts and private sector contracting opportunities at the centers. The Federal government’s role was to assist in operations through the U.S. Small Business Administration, the Department of Commerce's Minority Business Development Agency, SCORE and other Federal entities.
Shortly after implementing the UEP, Hurricanes Katrina and Rita struck the Gulf coast. By this time, the UEP was a national model that had already assisted minority entrepreneurs in growing their businesses. At the urging of the White House, the UEP specially designed a model for Louisiana, the UEP Gulf Coast, that utilized the Kauffman Coaches Program as the driver for entrepreneurial invigoration and economic integration. The Kauffman Coaches program was created to help entrepreneurs who did not have access to top-notch business advice identify and solve business problems in order to successfully grow their business. The program methodology focuses on examining the business’ performance, identifying positive and negative drivers of profitability, determining key variables to improve business performance, and establishing goals and metrics to plan and monitor results. In-house designed training modules are provided to shore up identified weaknesses.
Program Description
Kauffman’s UEP/UEPGC is regarded as the undisputed leader in the movement to develop scalable firms by improving their capacity and capability. Scalable firms are critical to the long-term redevelopment of the urban community. They hold the possibility of creating jobs, income and wealth for local communities. Moreover, this kind of economic initiative leads inexorably to sustained economic development with the highest impact on distressed economies.
The UEP has programs operating in Kansas City and Milwaukee. These offices have established partnerships with their respective local providers in order to provide the type, level and quality of services deserved by local firms as they strive for growth. Participants in these programs must be committed to: improving their entrepreneurial skills; willing to attend training; growth; and coaching. What follows is our Technical Approach.
Our engagement averages six months. Each participant must sign a contract and meet all of the conditions of the contract. Our offices have served a total of 600 entrepreneurs with 56% of them receiving a Personal Development Plan (PDP).
The PDP serves as the entrepreneur’s guidepost and benchmark for improved business viability and profitability. The critical ingredient in this process has been the coach who directs, monitors and evaluates the efficacy of various services. In addition, the coach serves as a sounding board and helps frame the discussion and amasses information for review.
Building on the success, best practices and proprietary systems of the UEP, the UEPGC has established offices in Baton Rouge and New Orleans, Louisiana. While the New Orleans office also uses the Kauffman Coaches model, the difference is that clients are trained in-house using our proprietary Training Modules (Exhibit I). These Training Modules focus on strengthening and improving foundational areas; since there is a scarcity of local service providers. These training modules were developed by a former professor of management at one of the nation’s most highly regarded business schools, C. Alexander West, Ph.D., and national director, Daryl Williams, sociologist. Other staff and consultants collaborated on this effort.
Participants in the Training Modules must complete all six modules, apply the techniques to their individual business and complete a business plan for their business . This process serves to strengthen the entrepreneur’s operative knowledge and skills, improves their management ability, and provide a knowledge base to evaluate information and make decisions. In addition, it allows for the development of an entrepreneurial driven business plan. The basis for all applications is a case study taken from the writings of Dr. West in the first case study of minority business, Black Enterprise Inc: Case Study of a New Experiment. Participants must also meet with their coach to ensure appropriate levels of learning and application of training to their business. Course modules have been modified and now total 10 (Exhibit II) instead of the original six. Part of the reason for the additions was for more advanced clients.
Many of our coaches have also held teaching positions at colleges and universities. Over 100 entrepreneurs have “road tested” our curriculum that utilizes the case study method of instruction. Except for nominal adjustments, evaluations have been overwhelmingly positive. Participants currently spend a minimum of 12 hours in coursework, 24 hours in coaching and 24 hours in business application. We offer our training during the week, on weekends and plans are underway to make use of advanced technology to offer on-line and podcasting as well.
As the first wave of participants complete their training and business applications, we are anxiously waiting to evaluate the impact on their business performance. We recognize that this can take years. Intermediate term evaluations, however, have shown the training and coaching to have had a measurably positive effect.
Key Management and Staffing
Daryl Williams, Director Policy and Minority Business, Ewing Marion Kauffman Foundation, and Executive Director UEP/UEPGC is the visionary and guiding force behind the UEP/UEPGC. Mr. Williams is nationally recognized for his role in helping create the UEP/UEPGC. In addition, he is a sociologist with a strong research background. . Mr. Williams has been responsible for and monitored numerous studies and research activities on minority business. Mr. Williams has been responsible for the development of the proprietary measurement and information tools that we use in this effort. These tools allow the UEP/UEPGC to collect data from numerous locations, aggregate it and then disaggregate it based on need or inquiry
Mr. Williams has assembled a world-class team of management and coaches. Day-to-day operations are handled by Kevin Lockett, Manager, UEP/UEPGC. Mr. Lockett oversees all staff matters, office operations, coaching assignments, training assignments and performance measures. Mr. Lockett is responsible for bringing a bottom line and entrepreneur understands to the UEP/UEPGC having successfully grown two small businesses and nurtured several others. In addition, Mr. Lockett played professional football for several years. During his off season, he regularly consulted with high net worth individuals to grow their firms to scale and has led the effort to create a fund for athletes. His numerous relationships with sports figures, entertainers and elected officials throughout the country assist with establishing mentors, access to financing, political leaders, procurement opportunities and cohorts.
The UEP/UEPGC have two Lead coaches who direct, manage, train and monitor all coaches. Lead coaches consist of C. Alexander West, Ph.D. and Andre Hinton, M.B. A. Mr. Hinton, an M.I.T. and Wharton graduate, has spent decades helping to grow businesses. He is called the “Business Doctor”. He helped to grow businesses first at Booz-Allen and Company as a business consultant and later at Timberland and Keystone Automotive where he oversaw the growth and sale of the latter firm.
Future Endeavors
The UEP/UEPGC intends to continue to work with entrepreneurs in the targeted cities to help them reach scale. In the process, it also intends to use its proprietary software to collect, store, analyze and synthesize the data from our multiple operations. We intend to be able to use this data to show the definitive correlation between our approach and the resulting impact on entrepreneurs becoming more scalable. The results would be published in order to allow others to replicate our programs on a larger scale.