City plans to better connect small businesses with resources
New initiatives, center & office to tackle business needs
After welcoming corporate giant General Electric, the mayor recently turned his attention to the other end of the business spectrum, announcing last week the city’s first plan for small businesses — a series of initiatives to tackle the needs of the sprawling sector.
“We want to make small businesses a top priority in the city of Boston,” Mayor Martin Walsh said, calling them “the lifeblood of our economy.”
Small businesses — defined as those with fewer than 50 employees and/or less than $5 million in revenue — provide a major source of urban employment and revenue. According to the small business plan report, they generate $150 billion in revenue and create 170,000 jobs annually.
“Ninety-five percent of Boston’s businesses are represented by small businesses,” said John Barros, chief of Economic Development.
Yet many struggle to secure the land, funding and knowledge to get started and build capacity. But resources do exists, said city officials, among a variety of local organizations as well as those offered by city government.
The challenge: “City services need to be easier to use and find and be friendlier,” Barros said.
That is a chief reason the city plans to open an Office of Small Businesses Development.
Many of the efforts called for in the plan focus on promoting business to business networking, increasing business owners’ awareness of opportunities — such as for acquiring real estate and loans — and bringing businesses to the attention of customers and support organizations.
The initiatives follow months-long study conducted by the city, in conjunction with Next Street and Mass Economics. The research effort was guided by a 34-person Small Business Advisory council, representing members throughout Boston’s small business community. Research included interviews with academics, vice presidents of financial institutions and loan providers, heads of development corporations and directors of small business associations, and roundtable discussions with business owners.
According to the study, key small business needs include help with identifying and acquiring new hires, finding and affording real estate, securing capital for business ventures, networking, gathering information on the markets and navigating government resources and services.
Above all else, businesses said they need help reaching new customers, said Rafael Carbonell, deputy director of the Office of Business Development, in a Banner interview.
“The number one need we heard was customer acquisition,” he said.
Part of the city’s plan is to lead by example, by emphasizing procurement and contracting with small businesses, said Karilyn Crockett, director of Economic Policy & Research.
Another piece of the plan: The city aims to help large institutions — such as hospitals and universities — find small firms from which to procure goods and services. The city also will encourage institutions to consider doing more business with small local firms. That could be enacted by discussing procurement options with institutions when they review their ten-year master plans.
“For large organizations that need to procure goods and services, we want them to think about the small business ecosystem as a way to tap that need,” she told the Banner. “[The city is saying to institutions,] ‘Let us show you some of the other opportunities you can tap for your services and goods-purchase needs.’ ”
Other customer-boosting strategies include encouraging small firms to do business with each other when supply and demand align.
Capital and real estate
Vernee Wilkinson is the former owner of Colorwheel Collection, a children’s gift store in Roslindale. She closed her store after three years. Wilkinson told the Banner she had market-tested her idea and knew what was working, but did not have the funds to grow. The store’s high rent was one problem.
Rafael Carbonell said that despite businesses saying they have trouble finding capital, lenders also are saying they have trouble finding businesses.
The lending capacity exists, Carbonell said: Boston has approximately 400 capital providers. The trick is making the connection, and that is precisely what the city plans to do: create a referral pipeline to link firms with reliable sources of capital and focus on bringing investment to minority-, women- and immigrant-owned businesses, which struggle particularly with this problem, according to the report.
Along with struggling to acquire funds, businesses often struggle to find real estate spaces that suit their needs, Crockett and Carbonell said. New initiatives call for increasing information to business owners about what spaces are available.
Women, minorities and immigrants often have less access to capital and business networks, an inequity that carries over and hinders their business ventures, according to the report.
Boston’s population is majority female but a minority of Boston’s businesses are owned by women. Between 2009-2012, employment grew 13 percent for Boston’s minority-owned business enterprises, compared to 68 percent for all small businesses in the same industry segments, the report stated. In Massachusetts, immigrant-owned businesses with employees generate 44 percent less revenue-per-firm than native-born businesses with employees.
The report sets forth steps to increase networking among women and minority entrepreneurs, as well as connect the groups with mentoring and other resources.
Business ins and outs
Carlene O’Garro of Delectable Desires Pastries, a combination cake shop-bakery-café that opened in West Roxbury in 2015, said a passion for baking led her to open a store. She had to learn the business side of things along the way.
“When you want to start a business, you have a craft. You don’t know all the details that go along,” she told the Banner. The local Main Streets district helped her find a location, and small business loans helped her get started. She said business support can be especially helpful not just in guiding a new owner through the next step, but also in identifying what that next step should be.
“[Small businesses] go through a lot of challenges in terms of permitting, how to get a license, how to get a beer and wine license, how to sign a lease,” said Solmon Chowdhury, Small Business Plan Advisory Council member and co-owner of Shanti Taste of India in Dorchester, Roslindale and Cambridge, Dudley Café in Roxbury, and Monroe in Cambridge. When he got started, he did not know where he could get help with these questions, he said.
Issues related to small businesses that currently are handled by various city departments soon will be consolidated within a new Office of Small Business Development. As currently envisioned, it will feature a Small Business Center to help navigate the city’s resources via a physical presence, hotline and web portal.
The Office of Small Business Development is slated for creation early in fiscal year 2017, according to Carbonell. It will be housed within the Office of Economic Development.