Project Enterprise - Small Loans and Big Connections-NEW YORK State Prize

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Project Enterprise - Small Loans and Big Connections-NEW YORK State Prize

United States
Organization type: 
nonprofit/ngo/citizen sector
Budget: 
$500,000 - $1 million
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

To create A “Center of Entrepreneurship” in NYC where traditionally under-resourced entrepreneurs can receive Small Loans and BIG CONNECTIONS, or essentially a suite of services that will assist them to build businesses and assets for themselves and their families. Services encompass microloans, business training and development, networking opportunities and access to markets.

About Project

Problem: What problem is this project trying to address?

PE is working to change the face of small businesses in NYC by putting both financial and social capital into the hands of under-resourced populations, empowering them to start their own small businesses. The communities we serve have chronic unemployment and under-investment from traditional banks or other reputable lending institutions. Combining those challenges with incarceration and lack of education, there is a great need and desire for entrepreneurship to generate income, create jobs, and build social capital. PE is building capacity in these communities for advocacy and social change by building leaders within the small business community. The growth and success of entrepreneurs and small businesses further strengthen the communities and neighborhoods that they reside in as well as place them on the path towards financial independence. Additionally, by building the capacity of local businesses, PE hopes to be a bridge to increased financial investment by more traditional lenders in these areas.
About You
Organization:
Project Enterprise
Section 1: You
First Name

Project

Last Name

Enterprise

Organization

Project Enterprise

Country

, NY

Section 2: Your Organization
Organization Name

Project Enterprise

Organization Phone

212-678-6734

Organization Address

144 W. 125th St., 4th Floor New York, NY 10027

Organization Country

, NY

Your idea
Country and state your work focuses on

, NY

Innovation
What makes your idea unique?

Project Enterprise (PE) started in 1997 as the only provider of microloans in New York City that does not require prior business experience, credit history, collateral or a co-signer to provide market-rate financing for small businesses. What makes PE’s model innovative and unique is the member-driven evolution of the program, to become a veritable “Center of Entrepreneurship.” Through consistent input from our entrepreneurs, we have introduced additional programming to assist small businesses. Leader entrepreneurs engage regularly with senior staff to propose program direction. At Project Enterprise, change and innovation is a dynamic part of the organization’s process. As a result, what distinguishes our program is the training and technical assistance that we provide to our members, along with networking opportunities and access to markets. In short, we offer “Small Loans and BIG CONNECTIONS”. Our members’ businesses benefit not only by receiving funding, but receiving much needed assistance and training on issues that they may tackle as entrepreneurs. They are offered ongoing business training during the bi-weekly Center Meetings and can learn from the challenges of their peers. Additionally, they receive individualized attention during site-visits and consulting sessions and can receive pro-bono legal assistance. Throughout the year, members are further engaged through networking events, workshops, and access to market events like tradeshows and bazaars. Members can also get industry-specific advice through Affinity Groups. This holistic approach offers greater long term benefit and allows businesses to become more self-sufficient.

Do you have a patent for this idea?

Impact
What impact have you had?

In the last five years alone, PE has disbursed 390 loans totaling more than $1.1M, with just 7% written off; and provided more than 2,000 microentrepreneurs with business training and networking opportunities. Our entrepreneurs experience a 42% increase in monthly profit after getting a PE loan and our businesses generate nearly $5 million in local wages annually. Members stay with PE for an average of 4 years.

Actions

PE is committed to proving the tools necessary for entrepreneurial success. The steps include creating PE Ambassadors, Affinity Groups, Access to Markets and becoming an Entrepreneurial Assistance Program (EAP) site. The Ambassadors are PE members who have been with the organization for over 3 years and have successful businesses. They teach our introductory training class and receive public speaking training to advocate on behalf of their fellow entrepreneurs. Additionally, we have created Affinity Groups where members can exchange and receive resources specific to their industry. Each Affinity Group is led by a well-respected member of the industry business community as well as a PE member. Access to Markets is a program that connects members with venues to sell and/or showcase their products and services. The EAP is a formal business plan writing class where entrepreneurs complete a business plan over 10 weeks. Deterrents to success are members not taking advantage of the programs for varied reasons or general inactivity.

Results

The expected results of implementing these programs is that members will have a variety of resources to help grow and strengthen their businesses and they will take more of a leadership role in shaping the services that can best meet their needs. Through the Ambassador program, we hope that more seasoned members will be a resource for newer members. Through the Affinity Groups, we hope that members will have access to respected professionals in their field that they can forge mentorships with and be exposed to industry specific events & markets. The Access to Markets program allows members to connect with potential customers and clients. It also allows them to experience selling their products in the midst of competition. Finally, through EAP, members have access to business professionals in areas like marketing, finance, and operations, while creating a viable document that can help them secure financing from other sources and serve as a roadmap for their business. Through all programs, members are asked to take on leadership roles. We envision PE serving an increased number of entrepreneurs with greater business survival rates and higher revenues.

What will it take for your project to be successful over the next three years? Please address each year separately, if possible.

In order for PE to provide more loans and be able to provide members with the added benefits of training, technical assistance, business development, networking and access to markets, we recognize the need to strengthen our infrastructure, improve our data gathering and reporting process, to add staff, and expand our partnerships. Over the next 3 years we plan to increase the amount loaned to $1 million per year and the number of entrepreneurs served to approximately 1000 per year. In 2010 specifically, we will make significant strides in this direction as we plan to purchase Loan Management Software, outsource our technology platform, and hire 1-2 full time staff members. As a result of these improvements, this year we expect to increase the amount of loans to $350,000 and service more than 600 entrepreneurs. We will grow the program in all the boroughs of New York City. Next year, we plan to add one additional staff member, increase the amount of loans to $500,000 and provide service to more than 850 members. We will also relocate our offices to accommodate further growth, as well as increase and strengthen the Affinity Groups. In year three, we plan to add an additional full time staff member, expand partnerships to allow for partners to provide the training component, while we provide the loan products, lend $1 million and serve 1,000 members. In year three, we also will re-introduce the Retail Incubator Selling Experience (R.I.S.E.) program where members can experience the retail selling experience with a relatively low investment by sharing space over a three-month period.

What would prevent your project from being a success?

The biggest obstacle to our project being successful is infrastructure which relies heavily on funding. We need to be able to increase our capacity and create more systems. For example, we need the ability to reach more entrepreneurs through marketing. We have a small budget for marketing and have been relying on grass roots marketing to accomplish our goals. Additional staff people are key to our ability to grow our program and allow us to successfully expand into other areas, however, our office space is limited. We must move our offices in order to grow our internal capacity and be able to serve more people and gain additional funding. The strength of our program relies heavily on us providing services beyond capital. For us to effectively continue to expand our current services and add on new program components, our infrastructure must be invested in heavily. We are optimistic that several of our infrastructure needs will be met and are working aggressively toward those goals.

How many people will your project serve annually?

101‐1000

What is the average monthly household income in your target community, in US Dollars?

$1000 - 4000

Does your project seek to have an impact on public policy?

Sustainability
What stage is your project in?

Operating for more than 5 years

In what country?

, NY

Is your initiative connected to an established organization?

Yes

If yes, provide organization name.

Project Enterprise

How long has this organization been operating?

More than 5 years

Does your organization have a Board of Directors or an Advisory Board?

Yes

Does your organization have any non-monetary partnerships with NGOs?

Yes

Does your organization have any non-monetary partnerships with businesses?

Yes

Does your organization have any non-monetary partnerships with government?

Yes

Please tell us more about how these partnerships are critical to the success of your innovation.

Through our partnerships, we are able to reach a greater number of people. Many of our partners refer people to us. Additionally, we are able to provide training and services to clients at their location. Our program is unique because of the “BIG CONNECTIONS” part of what we do. Partnerships allow us to meet new speakers and find new resources to share with our members, further strengthening our networking and access to markets initiatives.

What are the three most important actions needed to grow your initiative or organization?

The three most important actions needed to grow our program are 1) investing in infrastructure; 2) increasing our market share; and 3) expanding our partnerships. We must invest in our infrastructure because this is critical to our success. In order to achieve our long term goals, we must be able to grow; infrastructure, as mentioned before, is the key to our ability to effectively scale our program. Many of the needs that we have, including additional staff, larger office space, and loan management software are infrastructure needs. Some of these needs are currently being addressed, but in moving forward, we will need to address the rest. By increasing our market share, we will become a more widely known organization. This allows us to gain new friends and donors, as well as attracting new members and partners. Creating a highly recognized brand will also allow us to partner with organizations to deliver our program to different populations, including survivors of domestic violence and formerly incarcerated persons, among others. Finally, by creating deeper partnerships, we will be able to reach new members and tap into other resources beyond those that are currently in our sphere.

The Story
What was the defining moment that led you to this innovation?

The defining moment that led us to create this component of the program was a decline in loan disbursements in 2004. After forming a focus group composed of some of our members, we found that they wanted something more than just loans; they wanted the connections to successful entrepreneurs, opportunities to profile their businesses and resources beyond capital to help their businesses grow. At that time, we created the “BIG CONNECTIONS” part of our program. A famous slogan says “Membership has its privileges” and at Project Enterprise, that hold true. Our members are able to access a variety of resources including pro bono legal assistance, business consultation services, and financial assistance. Additionally, as part of this initiative, PE began hosting networking events that provide an opportunity for our members from all programs and neighborhoods to build their business network and participate in educational workshops. We also launched an Access to Markets Initiative to help our entrepreneurs improve their competitiveness in the marketplace by building their skills and increasing their opportunities to bring their products and services to market. As part of the Access to Markets, we offer holiday shopping gift guides. The gift guide features the products of many PE businesses, is featured on PE’s website and is regularly advertised in PE’s newsletter, marketing and development materials. PE also helps entrepreneurs directly get their products and services to market through vending opportunities and tradeshows. PE has sponsored its own vending events including its Holiday Bazaar, and also provides discount access to vending opportunities across New York City. Since the initial expansion of our program, we have continually introduced new products including the Affinity Groups and the Ambassador Program to further engage our members.

Tell us about the social innovator behind this idea.

The concept of doing Grameen style microfinance in New York City was developed by Nick and Debra Schatzki and Project Enterprise was founded in 1997. Over the life of the organization, the program has evolved in part due to excellent leadership, but also because of the collaborative nature of the organization that is provides a space for members sharing in the development of the program. Essentially, there is not really one person leading the innovation, but rather, the evolution of the original program into the unique and innovative incarnation that exists today is owed to all stakeholders.

How did you first hear about Changemakers?

Personal contact at Changemakers

If through another, please provide the name of the organization or company

50 words or fewer