New York Times
February 21, 2006
By: Elizabeth Olson
Minority Owned Business; After the Flood, Free Advice for Entrepreneurs in Need
A YEAR ago, galvanized by studies showing that the number of minority-owned businesses was increasing rapidly nationwide but still faced basic problems like borrowing money, a coalition decided small-business owners needed help to grow and prosper.
The Ewing Marion Kauffman Foundation, a nonprofit group in Kansas City, Mo., dedicated to fostering entrepreneurship, joined with the National Urban League and other organizations -- with an endorsement from the White House -- to create the Urban Entrepreneur Partnership to give minority businesspeople advice and training needed to overcome financial and other obstacles.
Just as the Entrepreneur Partnership was setting up one-stop small-business help centers in several cities, the southernmost being Atlanta, Hurricanes Katrina and Rita devastated as many as 80,000 Gulf Coast businesses, many of them minority-owned companies.
''We couldn't just go on with the original plan and ignore what was going on in New Orleans and the area around it,'' said Daryl Williams, the Kauffman Foundation's director of minority entrepreneurship.
''When Katrina hit, people asked us about what we were going to do to help those entrepreneurs,'' he said, ''but we had not thought about it.''
But Mr. Williams got in gear. Within weeks, he went to New Orleans, where he was shaken by the ''unprecedented and demonic horror on the Gulf Coast,'' and the daunting conditions for those who had lost their businesses and sometimes their homes.
After two more visits to the region, Mr. Williams went back to Kansas City and drew up the Katrina Urban Entrepreneur Partnership, borrowing from the core program but tailoring the new one to the needs of hurricane-affected small businesses.
The Kauffman Foundation is to start the program this month, giving needy entrepreneurs intensive help to ensure that they get part of the cleanup and reconstruction work on the Gulf Coast. Concerns have been raised that minority-owned companies are not getting a fair share of the posthurricane business.
''We have got to connect these people --and some of them have lost almost everything -- with experienced coaches who can help them,'' Mr. Williams said. The foundation is renting office space in New Orleans, bringing in professional business coaches on a rotating basis and identifying federally certified minority enterprises --beginning with demolition, construction and rebuilding businesses - that can benefit from such assistance.
One such business owner is Byron Stewart, 49, whose architectural firm, Byron J. Stewart & Associates, in the Uptown neighborhood of New Orleans, was flooded. He and his family fled Katrina, and he returned to find the first-floor office of his Victorian-style frame house under four feet of water. His residence upstairs was undamaged, but Mr. Stewart had to start his 15-year-old business almost from scratch.
The only reason he has a business at all, he said, is that he grabbed his computer hard drive and his laptop as he left. But his business is limping along. Finances are at the point, he said, ''where it's scary,'' and he's not sure whether he can pay the bills and himself and his four employees, who have been working from their homes.
Still, even though he has inquiries about architectural commissions, he said he was cautious because he wanted to create a business plan that would help him weather future economic downturns. In 2004, a stagnant economy in the New Orleans area caused his revenues, usually about $850,000, to dip substantially, by $300,000.
''Now there are plenty of jobs because of the amount of work that needs to be done,'' he said, ''but I am going to take a slower approach because I want to grow my business for the long term.''
To reach his goal of generating $2 million in yearly revenues, Mr. Stewart said he would open his financial records to one of the Kauffman Foundation's coaches, who, among other tasks, will help him analyze them, create a cash flow and evaluate which projects can be profitable.
The Kauffman project also plans to connect minority entrepreneurs like Mr. Stewart with large established businesses that are not necessarily in the Gulf region but could help them form joint ventures and partnerships to bid on federal and private contracts.
To get the effort going, Kauffman is committing up to $1 million this year to help as many as 1,000 businesses, and expects that Louisiana economic development authorities and national groups like the Business Roundtable, a group of about 160 chief executives of major corporations, will donate top expertise and financial assistance to the Katrina Urban Entrepreneur effort.
''We have businesses down in the Gulf which might have two or three trucks,'' said Kermit Thomas, a consultant to the Kauffman Foundation, ''but contracts that require 200 to 300 trucks. So we are trying to use the existing U.E.P. offices to find companies in their areas to pair up with businesses in New Orleans and the Gulf which have the experience and know-how, but who don't have the resources to be able to bid successfully on a contract.''
That is what Keith Tillage, of the Tillage Construction Company in Baton Rouge, La., hopes to do. The business he runs and owns with his father, Kevin, was not wiped out, but like many businesses in the area, it is confronted with the disappearance of established clients and the post-Katrina era confusion.
Mr. Tillage said he welcomed the ''intrusive'' coaching, which will most likely come from Michael Dayton, a lead Kauffman coach who will give him frank advice on every aspect of his business.
For example, such advice has already led Mr. Tillage to pass up bidding on a large contract to provide trailers for housing.
''It was tempting because it was serious money,'' he said, ''but then they asked us, 'Do you want to be in the trailer maintenance business 10 years down the road?' And we know that's not where we want to be.''
Mr. Dayton, a former chief financial officer for a community development organization, said his goal was to help Tillage, which now employs seven workers, ''to build its capacity to deliver and develop strategies to find clients.''
''We will sit down with them, side by side,'' he said. ''They have a business to operate, so it could take a year or more, but we want them to be in this for the long run.''