WASHINGTON—Kansas City will be one of five cities nationwide in a multimillion-dollar pilot program aimed at encouraging minority entrepreneurs, leaders of the effort announced Friday.
The program’s sponsors hope that through mentoring, access to contracting and financing information, and education on business basics, such as collecting accounts receivable and managing inventory, more current minority business owners will succeed, thus creating jobs, wealth and new community leaders.
Among the chief sponsors of the Urban Entrepreneur Partnership is Kansas City’s Ewing Marion Kauffman Foundation, which will spend $2.3 million over the next three years on the project and provide its expertise in entrepreneur development, said Carl Schramm, the foundation’s president.
“Minorities are making up an increasing proportion of our population,” Schramm said at a Washington press conference. “They are the workers and consumers of tomorrow. It is only right and just that society does all it can to help them also to be the entrepreneurs of tomorrow as well.”
Other chief sponsors are the National Urban League, the Bush Administration, and the Business Roundtable, an association of more than 160 CEOs of major U.S. corporations. The Urban League pledged access to more than $100 million through joint ventures with private capital funds.
Studies show that while minorities are generally more interested than whites in starting their own businesses, few actually do.
African-Americans are 50 percent more likely than whites to try to start a business, according to a study backed by the Kauffman Foundation. But it found that black-owned firms account for just 4 percent of all U.S businesses, and Latino-owned firms, 6 percent.
“Economic studies of blacks and whites find a huge gap between the two communities…This is a very important effort to close the gaps in America,” said Marc Morial, president and CEO of the National Urban League.
For those minorities who do start their own businesses, there are many barriers to success, such as experience and access to financial and executive assistance, said Morial, who will be the initiative’s national chairman.
Besides Kansas City, the program will debut in Atlanta, Cincinnati, Cleveland and Jacksonville, and likely will be up and running early next year. The program’s sponsors hope to expand it to 15 cities by the end of 2006.
It will take the form of one-stop “economic empowerment” centers where minority entrepreneurs can get information. The centers would be directed at existing small businesses, rather than those wanting to get into business, Schramm said. He said there are 240 minority-owned businesses in the Kansas City area with sales of $250,000 a year. The goal: Get them to sales in the $10-$50 million range.
“The measure will be the same measure you put on any business,” Schramm said. “Top-line growth, profitability, expansion.”
President Bush has made the so-called “ownership society” a key theme in his re-election campaign, and the program grew out of a speech Bush made to the Urban League. Several administration officials spoke at the press conference, lauding Bush’s commitment to small businesses and entrepreneurs.
Asked about the election season announcement, Schramm said, “No matter who’s the president, the federal government would be enthusiastic about this. If there is a President Kerry, I expect the program will still be supported.”