Unemployment is up. The market is down. And, most forecasts call for more tough times to come. But if you’ve got the right idea, it could still be a good time to start the small business you’ve always dreamed of running. We’ll consider the prospects, and perils, of striking out on your own.


  • Darrell Brown Executive Director, Washington DC Small Business Development Center at Howard University
  • Emily Coronado Director of Small Business Development, Latino Economic Development Corporation
  • Erin Cribbs Teacher, Croom Vocational High School and part of the Network for Teaching Entrepreneurship


  • 12:06:41

    MR. KOJO NNAMDIFrom WAMU 88.5, at American University in Washington, welcome to "The Kojo Nnamdi Show," connecting your neighborhood with the world. Unemployment is up in the area for the first time in 14 months. The stock market is down. Loans are tough to get, but interest rates are low. And word came last week that retail sales are actually up. The overall economic picture is grim, but there are bright spots.

  • 12:07:14

    MR. KOJO NNAMDIAnd if you haven't been able to find the right job, it could be a good time to create the one you've always wanted. You know, become your own boss. Follow your passion. Start that business you've always dreamed of running. And a lot of successful small businesses start, and even thrive, in down economies. You've got to have the right idea and a good plan. Even with those things, it won't be easy, but it could be the time to take a chance.

  • 12:07:42

    MR. KOJO NNAMDIJoining us in studio to discuss this is Darrell Brown. He is the executive director of the Washington D.C. Small Business Development Center at Howard University. Darrell Brown, thank you so much for joining us.

  • 12:07:55

    MR. DARRELL BROWNGood afternoon, Kojo. Thank you for having me on your show.

  • 12:07:58

    NNAMDIYou're welcome. Also in studio with us is Emily Coronado. She is the director of small business development with the Latino Economic Development Corporation. Emily Coronado, thank you for joining us also.

  • 12:08:11

    MS. EMILY CORONADOThanks so much for inviting me, Kojo.

  • 12:08:13

    NNAMDIAnd you're welcome. And we're inviting you to join this conversation by calling 800-433-8850. If you own a small business, how is it faring? Are you sitting on an idea for a business of your own? Tell us what it is, 800-433-8850. Go to our website kojoshow.org. Ask your question or make your comment there. Send email to kojo@wamu.org, or send us a tweet, @kojoshow.

  • 12:08:40

    NNAMDIA lot of unemployed people, especially those who have been out of work for a long time, are, no doubt, feeling a little discouraged and are likely to be running short on funds. If that person has a good idea for his or her own business, is now the time to pursue it?

  • 12:08:58

    BROWNYes, Kojo, if, in fact, they have a good idea and they are prepared. And I think what is important is that one be prepared to go out and start their own business. And a lot of times people will jump into that, and they're not prepared. And that's critically important.

  • 12:09:20

    NNAMDIExactly what do we mean by prepared?

  • 12:09:23

    BROWNBeing prepared is one -- well, you have to understand your niche market, the industry that you're in. You should have a business plan. You should consult with an attorney. You should consult with an accountant. And you should really focus your efforts in terms of understanding your market niche, putting together your business plan and having strategies in place to penetrate the market that you're interested in.

  • 12:09:53

    NNAMDIA lot of people listening to you right now will say that's intimidating. Starting your own business can be daunting, even in good times. How do you get people past that intimidation factor?

  • 12:10:04

    BROWNWell, being prepared is what will get you past that intimidation factor. Oftentimes that intimidation factor will come in when one is not prepared. And being prepared is key to overcoming intimidation.

  • 12:10:19

    NNAMDISmall businesses account for up to two-thirds of new hires. But the growth of new businesses has been slower during this recovery than the last. Why do you think that is, Emily?

  • 12:10:31

    CORONADOI think that a lot of businesses are incubating themselves right now. A lot of people are operating informally and really looking at their chances. I think one of the things we've seen at LEDC is that, when somebody takes the steps to really formalize their business and look towards the long term, rather than just contract by contract, they have the opportunity to have further growth down the road.

  • 12:10:58

    NNAMDIAnd when Emily says LEDC, she's referring to the Latino Economic Development Corporation of which she is the director of small business development. She joins us in studio, along with Darrell Brown, executive director of the Washington D.C. Small Business Development Center at Howard University.

  • 12:11:14

    NNAMDIIf I walked into one of the four D.C. Small Business Development Center offices in the district or, for that matter, the Latin Economic Development Corporation offices with just a scrap of an idea -- for instance, starting a frozen yogurt shop -- but no clue how to make it happen, where would I start? First you, Emily.

  • 12:11:34

    CORONADOI think business ideas are a lot like flies. They distract us. They bother us. They come in and out. And one of the first things I say to clients is take a notebook and swat at the fly. Get your business idea on paper and start with just one line. From there, actually go through the process of business planning. You don't have to write a 60-page business plan. You don't have to present it to a lender.

  • 12:11:59

    CORONADOBut you do have to go through the process of spying on your competition. You have to go through the process of understanding, what are my start-up costs? And really look at, month by month, what am I going to lose in those hard months? And what can I do to make it through those hard months?

  • 12:12:15

    NNAMDIWhat would you say, Darrell?

  • 12:12:17

    BROWNI think that's right. I would agree with Emily and would elaborate, as follows. One, I would ask the individual whether or not he or she has a business plan. Again, having a business plan is essentially one's Bible as you go through the business development process and running and organizing your business.

  • 12:12:39

    BROWNSecond, as a result of having that plan, I would ask, do they fully understand the market in which they are attempting to penetrate? And that means, do you have the market research and analysis? Have you identified your competitors? And, in particular, how do you -- how are you different from your competitors? And, thereby, how are you able to better penetrate the marketplace?

  • 12:13:05

    BROWNIf you understand those things and you can fairly articulate that, then you are -- you've begun the process.

  • 12:13:16

    NNAMDICan anyone use your services?

  • 12:13:18

    BROWNYes. We -- anyone can use our services, absolutely. We focus primarily on for-profit organizations and businesses, not for not-for-profit.

  • 12:13:31

    NNAMDIHow about your services at the Latino Economic Development Corporation, Emily? Can anyone use those services?

  • 12:13:36

    CORONADOYes. Anyone can use our services.

  • 12:13:38

    NNAMDIHow much will it cost?

  • 12:13:40

    CORONADOFor our weekly How to Start a Business workshop, it's completely free. And then we have different costs depending on the course. Our intensive business planning course, that's eight sessions of $100. We have a sliding scale fee based on income for our one-on-one technical assistants.

  • 12:13:57

    NNAMDIAny cost with the Small Business Development Center?

  • 12:13:59

    BROWNOur counseling is at no cost. We do not cost for our counseling services. However, we have the ability to charge for training. But, at this time, because of economic hard times and companies are having difficulties, we've decided not to charge for our training.

  • 12:14:20

    NNAMDIFree services at this point.

  • 12:14:21


  • 12:14:21

    NNAMDIIf you're one of the 14 million Americans who is currently unemployed, do you think starting your own business is a viable option? Call us and tell us what you're thinking of. You may be able to get some advice here, 800-433-8850. We'll start with Kelly in Washington D.C. Kelly, you're on the air. Go ahead, please.

  • 12:14:40

    KELLYHey, I got laid off from three different jobs in 2003, one right -- pretty much after the other. I was at one job for a long time. And, because of the economy, when it started to tank, I got laid off. Then the next job I had, I was there for the -- you know, the probationary period, and they decided to shut down the department. And I got laid off.

  • 12:15:06

    KELLYAnd the third job that I had, I got hired to service a potential incoming contract along with, I don't know, like, eight other people. And the contract fell through. All of us got laid off. I started scouring the newspapers and what not. I saw an ad on a listserv in my neighborhood for somebody who needed a dog walker. I thought, well, you know, hey, I can walk dogs, right?

  • 12:15:33

    KELLYSo I thought, well, one dog wasn't going to be enough. I then did some -- I sent out an email to that same list posing as a -- just saying I was starting a dog walking business.

  • 12:15:46


  • 12:15:47

    KELLYOne of my neighbors took that email, sent it off to several other listservs around the same general vicinity. Within a week I had enough income -- or I had -- I was walking enough dogs that I was able to come off unemployment. I have been doing that for the last eight years now. And I have -- you know, I live a very -- you know, I'm not rich, but I live a fairly comfortable, for me, life.

  • 12:16:20

    KELLYI'm able to pay my rent, all my bills. You know, I have pretty low expectations by the way. But, you know, I don't live week to week like I used to.

  • 12:16:28

    NNAMDISo the dog walking...

  • 12:16:29

    KELLYI've been able to put money into savings -- I'm able to put money into savings, yes.

  • 12:16:34

    NNAMDIThe dog walking business is turning out to be good for you. And it helps me to raise a pretty important question with Darrell and Emily, and that is the market question. It's always important, I guess, to know your market and the demand that's out there for whatever product or service you want to launch. In addition to dog walking, what kinds of business are you helping to get off the ground these days?

  • 12:16:55

    NNAMDIIt seems to me that Kelly recognized that we're an area where you look around and there are more and more dog parks. There are more and more people owning dogs. And a lot of those people have to work during the day, so dog walking, I guess, at a time like this, is a good enterprise.

  • 12:17:09

    BROWNSure, it is. And we see the gamut of businesses. They range from A to Z. There's no particular set of businesses that we're focusing on, and we take them as they come. And dog walking works. And I'm happy to hear that he's doing well.

  • 12:17:30

    NNAMDIAnything jumping out at you right now, Emily, because of trends that people might be seeing in the economy or cultural trends that they're seeing in the Washington area?

  • 12:17:39

    CORONADOWell, I think, in the case of the caller, this is a situation where there's not a lot of start-up costs for dog walking. So it's an excellent opportunity. And if you have the skills or the experience -- and, in this case, it didn't sound like you did, but you had the initiative. It's wonderful to hear that.

  • 12:17:56

    CORONADOAnd I think that's often what we're seeing more and more, is a lot of the service industry is having -- or people coming from the service industry are having more success these days because they don't have to go to get that bank loan for the large start up.

  • 12:18:12

    NNAMDIKelly, thank you very much for your call. We move on to Scott in Alexandria, Va. Scott, you're not on the air. Go ahead, please.

  • 12:18:19

    SCOTTHi. Good afternoon. I'm a college student at George Mason University, and also an author and an artist. And about February I was -- well, before that I was looking for a job, and I decided to find one that fit my class schedule. And so I decided to actually start an Internet entertainment thing where I'd have my art, comics, a blog 'cause I saw a bunch of people doing one or the other and making some pretty good money off if it.

  • 12:18:45

    SCOTTSo I started my website, and I got all the paperwork in. And although it's not doing huge returns yet, because it's still fairly new in February, it's gotten my name out enough that someone else has actually come up to me and said, hey, we want you to teach after-school activities to middle schoolers about drawing and writing and stuff. And it's -- so even just not having a successful yet start-up business, it's gotten me a job that fits my schedule as well.

  • 12:19:18

    NNAMDICare to comment on that, Darrell?

  • 12:19:20

    BROWNWell, I -- social media is a wonderful avenue to market your business, particularly if you understand how social media works and the line of businesses. The line of business that this individual is in is great for social media networking.

  • 12:19:41

    NNAMDIThe other thing that brings to my mind is -- are you coming across a lot of people who are thinking beyond bricks and mortar, people who are saying, look, what can I start, like our dog walker, without having to pay rent, buy anything, I can just operate from my home?

  • 12:19:55

    CORONADOAbsolutely. Home-based businesses are very common in any type of economy, but, I think, especially in a down economy. I can tell you that I was speaking with a colleague of mine, and he was telling me about, well, when I got my home occupation license -- my home occupation permit, I had to get the letter from my landlord in my apartment building.

  • 12:20:16

    CORONADOAnd I was kind of concerned. And I, you know, got all my ducks in a row, got all the paperwork ready, went to him, and my landlord was like, oh yeah, there's, like, 20 businesses in this building. So...

  • 12:20:26

    NNAMDIOkay. So, yeah, that's happening a lot more. We're going to take a short break, but, Scott, thank you very much for your call and good luck to you. You, too, can call us, 800-433-8850. Did you start a small business that did not make it? What lessons did you learn from that experience? 800-433--8850. Go to our website, kojoshow.org. Join the conversation there, or send us a tweet, @kojoshow. I'm Kojo Nnamdi.

  • 12:22:52

    NNAMDIStarting a small business in a down economy. How do you do that? Here to help answer that question is Darrell Brown, Executive Director of the Washington D.C. Small Business Development Center at Howard University along with Emily Coronado, Director of Small Business Development with the Latino Economic Development Corporation. We're inviting your calls at 800-433-8850. If you own a small business, how is it faring?

  • 12:23:17

    NNAMDIYou can also go to our website at kojoshow.org. We got an email from Gabriel who said, "My husband and I have our own small gardening maintenance and design business that we've been successfully operating as a sole proprietorship for over 12 years. The business is in my husband's name, and I'm actually one of his employees, along with three other people.

  • 12:23:38

    NNAMDI"My husband wants to keep the business as a sole proprietorship, but I know there are benefits for women who run small businesses. Is there a way that I can be a silent partner and get the benefits from being a woman?" Emily Coronado?

  • 12:23:55

    CORONADOThat's a really interesting question. It sounds like -- I would want to understand why the -- why your husband is interested in keeping it as a sole proprietor. Does that mean that he wants to be the sole owner of the business? Or does he want to register -- does he want to keep it as -- the legal structure as a sole proprietor?

  • 12:24:17

    NNAMDIWell, she only communicated with us by email, so we'll have to assume one or the other.

  • 12:24:21


  • 12:24:21

    NNAMDIAssuming that her husband wants to keep it as a sole proprietorship because, well, he likes that arrangement -- he's the boss. But she feels that if she is a silent partner in the business and is an owner of the business, are there things within -- are there benefits within the small business community for a woman who happens to be a partner in the business?

  • 12:24:41

    CORONADOYeah, she would have to become a partner in some -- one way or another. She would have to -- when you're operating as a sole proprietor, it's -- you've selected the sole proprietor legal structure where there's one owner. And you can have an LLC with multiple owners. You can have LLCs with one owner.

  • 12:24:57

    CORONADOAnd something that would be interesting and important is to have a partnership agreement stating what percentage of the business is in her -- is under her. We see a lot of businesses -- or people who want to start businesses come to us, and they have -- they link it with family. And it's important to, even in family situations, have partnership agreements and just have those expectations clear about what's business and what's family.

  • 12:25:26

    NNAMDISo she doesn't have to be a silent partner, Darrell.

  • 12:25:29

    BROWNNo. She doesn't have to be a silent partner. But I think this is one of the things that entrepreneurs and people who are in business really have to think through, is how to structure their business because as the business grows you may need a new and different structure. One partner may become stronger at a particular thing than another, and that could affect how the business operates.

  • 12:25:53

    BROWNAnd so whether it's a sole proprietorship or a partnership or LLC, as Emily indicated, is something that individuals need to sit down and take a real hard look at, and not only just in terms of the social interaction, but also because of the tax consequences and liability issues and insurance issues and the like. And so to take a real strong look at structure is very important.

  • 12:26:18

    NNAMDIOn to Eric in Langley Park, Md. Eric, you're on the air. Go ahead, please. Hi, Eric, are you there? Going to put Eric on hold for a second and go to Jason in Tacoma Park, Md. Jason, your turn.

  • 12:26:35

    JASONHi, Kojo, thanks for having me.

  • 12:26:36

    NNAMDIYou're welcome.

  • 12:26:37

    JASONI just wanted to share my experience with you real quick. I started a housecleaning service back in 2005. At the time I had a partner. Unfortunately, it didn't work out. But, at the moment now, I am working by myself, and I make a pretty good living just cleaning houses.

  • 12:26:53

    JASONAnd I think -- I just wanted to mention to your listeners that housecleaning actually might be a good opportunity for a person to make money, either on a part-time basis or a full-time basis. It's definitely something that you can't just jump into. You need to learn how to do it. But over time, you can build up a client base and have a pretty good income for yourself.

  • 12:27:17

    NNAMDIWhat do you say to that, Emily Coronado?

  • 12:27:18

    CORONADOWe see a lot of companies -- or a lot of people who want to start housecleaning companies. I'm sorry. Also, a lot of companies want to get contracts with offices and kind of take it to the next step. A lot of them see it as the next step, is going into office buildings and maintenance.

  • 12:27:39

    NNAMDIThank you very much for your call, Jason. Joining us now by phone from Cheltenham, Md. is Erin Cribbs. Erin Cribbs is a business teacher at Croom Vocational High School in Prince George's County. She's part of the Network for Teaching Entrepreneurship. Erin Cribbs, thank you for joining us.

  • 12:27:54

    MS. ERIN CRIBBSThank you for having me, Kojo. I appreciate it.

  • 12:27:56

    NNAMDIErin, tell us about the students at Croom Vocational High School and about what you teach there.

  • 12:28:01

    CRIBBSI teach Entrepreneurship I and II here at Croom. Croom is an alternative high school. We're a choice school, so if students are having problems in the regular academic setting, they can come to Croom and ask for admission here, instead of attending a regular high school.

  • 12:28:17

    NNAMDIIf parents or teachers listening would like to learn more about how to get the program into their school or how they can volunteer for the program, we have a link at our website at kojoshow.org to that program. But tell us a little bit about exactly what you teach them

  • 12:28:33

    CRIBBSWell, for the entrepreneurship class, I use the NFTE curriculum, which is a textbook, "Entrepreneurship, Owning Your Own Future." And it teaches the students everything from determining a business idea to completing a business plan. And then we have the students, for a culmination activity, to present that business plan to a panel of judges for our regional competition.

  • 12:28:56

    NNAMDIAnd when you heard Erin mention NFTE, that's part of the -- that's the Network for Teaching Entrepreneurship. As I said, there's a link to our website. Erin, encouraging at-risk kids to get through high school and into college can be tough, but over 80 percent of dropouts say that they would have stayed in school if it were more relevant to real life.

  • 12:29:15

    NNAMDIHow do you help your students make that connection between their goals and the education they'll need to achieve them?

  • 12:29:23

    CRIBBSWell, I believe, as educators, we need to relate all lessons to what our current students are facing. If you think back to when we were in school, the economy, the state of the nation, it's totally different from where we were. So we have to get the students to see that everything is important. Math is important. From the entrepreneurship side, if no one is currently hiring you, then what can you do so you can pay yourself?

  • 12:29:47

    CRIBBSThat's how I get students to relate. I show them that there's something that they are good at. They can turn that into a business and then make money for themselves.

  • 12:29:55

    NNAMDIYou encourage students to come up with ideas for businesses that they can start right now, right?

  • 12:30:01

    CRIBBSRight now, yes, sir.

  • 12:30:03

    NNAMDINot businesses that they can start 10 years from now.

  • 12:30:05

    CRIBBSNo. A lot of students, or some students, they'll say, well, I want to start a club. Well, okay. Well, how do you get financing to get the building for the club? How are you going to pay security? So start now, and then you could become, like, a serial entrepreneur. You could start one business and then use that money to fund another business until you have enough money to get that dream business that you want.

  • 12:30:23

    NNAMDIYou have some interesting methods of instruction. How do Legos help your students learn how to run a business?

  • 12:30:30

    CRIBBSThe Lego activity teaches the students how to calculate the economics of one unit. So if a student, for example, wants to make teddy bears, we need to figure out how much it costs to make that teddy bear, from the fabric, the stuffing, the thread to put the teddy bear together, the buttons for the eyes. So with the Lego activity, you tell them you're going to create a toy for a specific age group, let's say, 3- to 4-year-olds.

  • 12:30:54

    CRIBBSAnd then they use different Legos to build the product. And then they have to calculate, well, how much is the red brick worth? How much is the blue brick worth? How much is the green brick worth? And then they use that calculation to determine how much it costs to build that specific product.

  • 12:31:10

    NNAMDIAnd after they finish building that toy, it's my understanding that they have to give a short pitch for their toy.

  • 12:31:17

    CRIBBSThey have to tell me who they're targeting. Who's your target market, the name of the product, now your selling price of the product, and how much did it cost you to make that product? So once you determine your selling price and the cost to make it, they can now see how much profit they earn from each item.

  • 12:31:34

    NNAMDIIn case you're just joining us, we're talking with Erin Cribbs. She's a business teacher at Croom Vocational High School in Prince George's County. She's part of the Network for Teaching Entrepreneurship or NFTE. You've been a teacher for six years, and you brought the NFTE curriculum to Croom just two years ago. But, it's my understanding, you've already had some success with it there. Tell us the story of Oliver.

  • 12:31:55

    CRIBBSYes. Last year was my -- I'm sorry. Two years ago -- this is my third year at Croom. So when I first started teaching at Croom, they had not had an entrepreneurship class before. So for Oliver's perspective, it was getting him to find something he was passionate about. He was a student that started off saying there was nothing that he could do for a business. But as the school year progressed, we noticed that Oliver was very interested in fashion.

  • 12:32:23

    CRIBBSHe was constantly telling students what to wear to school, what to wear to the party, to the club and so forth. So we turned that into a business for Oliver. He now has the dream of being, like, a clothing designer for Beyonce.

  • 12:32:38

    CRIBBSHe wants to be the person to put together outfits for the stars to do their photo shoots, that type of thing.

  • 12:32:45

    NNAMDIGood for Oliver.

  • 12:32:47


  • 12:32:47

    NNAMDIErin Cribbs, thank you so much for joining us.

  • 12:32:49

    CRIBBSThank you.

  • 12:32:51

    NNAMDIErin Cribbs is a business teacher at Croom Vocational High School in Prince George's County. She's part of the Network for Teaching Entrepreneurship. Also joining us in studio is Emily Coronado, Director of Small Business Development with the Latino Economic Development Corporation, LEDC. And Darrell Brown, Executive Director of the Washington, D.C. Small Business Development Center at Howard University.

  • 12:33:12

    NNAMDIIf you've been trying to call and all the lines are busy, go to our website, kojoshow.org, and ask your question or make a comment there. Or simply send us a tweet, @kojoshow. We go back to Eric in Langley Park, Md. Eric, you're on the air. Go ahead, please.

  • 12:33:27

    ERICYeah, how are you?

  • 12:33:28

    NNAMDIDoing well.

  • 12:33:30

    ERICI just wanted to salute you, first and foremost. Your show is wonderful.

  • 12:33:33

    NNAMDIThank you, Eric.

  • 12:33:35

    ERICAnd my question is -- I've been in business for -- since 2009. I'm a sole proprietor. I'm in a mixed market, but I also do power washing. I do (word?) cleaning. I invented my own equipment, which helps me provide my service. I'm having trouble -- I went to the SBA, and, basically, I got a cold shoulder. I'm having trouble getting my business off the ground. I've been making a little bit of money, but not enough.

  • 12:34:10

    ERICI just wanted a little guidance, maybe a push in the right direction, what I could do to get my business flourishable. (sic)

  • 12:34:18

    NNAMDIWell, if you went to the SBA, then you probably went to an agency that was related in some way to what Darrell Brown is doing because he is the Executive Director of the Washington, D.C. Small Business Development Center, which is the SBA's Washington, D.C. agency here at Howard University.

  • 12:34:34

    BROWNThat's correct. One thing that you can do is come to our office because what you -- what I suggest is that you need to sit down with one of our counselors and talk about your business, where it is, what you've done, how you're currently operating. The previous individual spoke about pricing, and when you take a look at how you're pricing on your services and how that relates to your competitors.

  • 12:35:09

    BROWNAnd we -- you could use, also, to put together a business plan if you don't have one. And, by understanding your business plan, that will help you and guide you as you progress in developing your business. And it will also lay the foundation for access to capital. Without a business plan and a marketing plan and a strategic plan, you will not be able to access capital, that's for sure. And so we can sit down with you and help you with that.

  • 12:35:39

    ERICI actually do have all of that, and I've been working on it since I've started my business. And I've -- and it's evolved ever since that -- I guess I will have to come in because I'm having trouble procuring finances. I had a person that was going to help me finance, but the person, unfortunately, passed away. And ever since I've been just struggling trying to -- you know, trying to get it off the...

  • 12:36:03

    NNAMDIAgain, you raise an excellent issue, Eric. Because if I work with your counselors, that is, in your case, Darrell or, in your case, Emily Coronado, and we decide that I do have a viable idea and we do work up a business plan, where would Eric, or I, for that matter, find the money -- the start-up money that we need to get that business off the ground?

  • 12:36:26

    CORONADOWell, one of the things is having a viable idea. But the other thing is having the personal finances in order and being really clear about what's motivating you. So one of the first things that we do at LEDC is pull your credit and talk about your monthly budget and what you need. At LEDC we have...

  • 12:36:45

    NNAMDIBecause if I walk into a bank and my personal finances are in disarray, and I say, look, I need money to start up a business, they're going to say, nope, you don't look like a good credit risk.

  • 12:36:55

    CORONADORight, right.

  • 12:36:56


  • 12:36:57

    CORONADOThey're going to look at your credit. They're going to look at your, you know, business plan. But they're also going to look at your capacity to repay that loan. At LEDC, we're a micro-lender, so we have loans up to $50,000. So that is one option. And there are other micro-lenders in the area. So, you know, you could start at a bank and actually try to get their feedback. And then you could also start with LEDC.

  • 12:37:23

    NNAMDIWell, Darrell...

  • 12:37:24


  • 12:37:25

    NNAMDIThe -- I guess the reality that we're looking at now is the bank's are kind of tightening on lending in general, on the one hand. But, on the other hand, interest rates are low.

  • 12:37:35

    BROWNYeah, that's true. Be that as it may, the entrepreneur still has to have his financial house in order. And, again, at the DCSBDC, we can assist you with that. And we have access to a number of banks throughout the city. And we do also work with microloans organizations that provide those services as well.

  • 12:38:06

    BROWNThe important piece here, Kojo, is that the individual needs to really understand his or her finances. And they really need to understand his or her business and their business plan. And, oftentimes, we find with our clients is that the first thing that they say, oh, we need access to money. All I need is some money. And I can run my business, and I'll be fine. Well, actually, we found that that's not true.

  • 12:38:35

    BROWNWhat you really need is, one, understanding what it is that you're doing, which is running a business. You may understand the craft part of your business, but you may not...

  • 12:38:47

    NNAMDII may make a great yogurt.

  • 12:38:48

    BROWNYou may make a great yogurt, but you don't understand the business of making yogurt and how you go about doing that. And so, oftentimes, we find that our clients need to take a step back and look at themselves and understand that they're in a business, and they need to understand how to run and organize and operate that business. And we can help them with that. And then the next step is access to capital.

  • 12:39:13

    NNAMDIThank you for your call, Eric. On to Lisa in University Park, Md. Lisa, you're on the air. Go ahead, please.

  • 12:39:20

    LISAGood afternoon. Thank you so much. I started a business a year ago (unintelligible) consultation mainly because I couldn't keep the idea to myself any longer. But what made a difference in times where finances were a little tight, aside from family support, was some personal austerity measures so that I didn't feel the pressure of having to maintain a lifestyle that was no longer viable, not having a full-time position anymore.

  • 12:39:48

    LISABut then, more importantly, I joined a mastermind group with three other women in businesses that started on or about, you know, the past couple of years. So I was able to be in an environment where I felt comfortable, and that is to say, you know, I think a lot of -- those of us who start the business are concerned with sharing ideas and then having someone take advantage and what have you.

  • 12:40:13

    LISASo by sitting in a group that met, let's say, every other week where we had trust built up, we were able to share candidly what our challenges were and get feedback candidly from other folks. And that sort of support was very helpful and helped see me through the first year (unintelligible).

  • 12:40:31

    NNAMDILisa, I'm interested in the adjustments you made in your lifestyle during the course of the first year because most people who are going from full-time jobs into starting a business often don't think about that aspect of it. They expect to maintain the quality of their lifestyle. How did you know in advance that that was not necessarily a realistic option for you?

  • 12:40:52

    LISAWell, I looked at my budget a couple different ways, and I knew that I'd be taking a drop in income. And so when you do that, it sort of forces you to prioritize, what does quality of life mean? And I think that was part of the impetus to starting the business, was to improve my quality of life by doing something which I was even more passionate about, but which would also allow me to accommodate my priorities.

  • 12:41:16

    LISASo I looked at my budget. I looked at what my priorities -- and if something didn't fall within the priorities, whether that was a pedicure or, you know, horseback riding lessons or buying new plants all the time, I was able to cut that out but still feel as though I was improving my quality of life.

  • 12:41:35

    NNAMDIThank you very much for sharing that with us, Lisa. We've got to take a short break. When we return, we'll continue our conversation about starting a small business in a down economy and all you have to do. If you have already called, stay on the line. If the lines are busy, go to our website kojoshow.org, or send an email to kojo@wamu.org or a tweet, @kojoshow. I'm Kojo Nnamdi.

  • 12:43:58

    NNAMDIWelcome back to this conversation on starting small businesses in a down economy with Darrell Brown, Executive Director of the Washington D.C. Small Business Development Center at Howard University, and Emily Coronado, Director of Small Business Development with the Latino Economic Development Corporation.

  • 12:44:16

    NNAMDIFederal and state dollars are tight, but encouraging business growth is a priority. Is there any state or federal money out there for entrepreneurs?

  • 12:44:28

    BROWNWell, for for-profit organizations, yes. There's...

  • 12:44:32

    NNAMDIChances are better.

  • 12:44:33

    BROWNYour chances are better. And, again, you know, it comes down to being prepared and having your business plan and being able to present your business in a positive light, understanding the market that you're in and the niches and the like. And, again, I'm being repetitive here, but it is repetitive.

  • 12:44:55

    BROWNAnd people who are interested in starting their own business have to really come to terms with there's just some basic things that you can't get around not doing.

  • 12:45:06

    NNAMDIBut the good news is that -- it's my understanding that the SBA, Small Business Association supported more lending in the first quarter of this year than ever before. So, obviously, the SBA's trying to encourage as much -- as many as possible for-profits...

  • 12:45:20

    BROWNFor-profit, right.

  • 12:45:21

    NNAMDI...to get started.

  • 12:45:21


  • 12:45:22

    NNAMDIHere is Don in Washington, D.C. Don, your turn.

  • 12:45:26

    DONHi, Kojo. How are you today?

  • 12:45:27

    NNAMDII'm well.

  • 12:45:28

    DONOne of my main concerns is, as a minority, is there's not a lot of discussion going on in terms of those barriers. I'm self-employed, and I've been in business for 10 years now. But in my pursuit of finding lending, even with a pristine credit score and assets, I still ran into a number of issues with banks. I've gone to SCORE, SBA, as well as many others, kind of networking with other entrepreneurs.

  • 12:46:07

    DONAnd what I found that really worked best is having a real good business model, showing and being able to demonstrate where I can make profit, where somebody can invest in my idea because people -- banks are not in the business of really handing out money. They're in the business of investing in great ideas.

  • 12:46:31

    DONI really didn't find, personally, that doing a business plan was helpful because you need to actually get involved. You need to get dirty, so to speak, with the business that you're in prior to really understanding it enough to do a business plan. There's also the issues around taxes and legal issues that arise, so having the right accountant or lawyer to assist is also imperative.

  • 12:47:04

    DONBut, generally speaking, the best way to start your own business is to either volunteer in a business which you yourself can see yourself doing or working -- getting a business working -- let's say, dog walker was a caller earlier -- get a business as a dog walker and then learn what that -- what makes that business successful, what makes it -- what could make it even better and employ a strategy from there.

  • 12:47:36

    NNAMDII'm glad you raised that issue, Don, because it gets to be fairly complicated. Here's an email we got from Mike in Baltimore. "I'm a totally prepared entrepreneur. The product I would like to make and sell I know inside and out after 20 years in the industry. I spent 18 months researching the market, how to start a business, et cetera. So I have a plan, and I'm working on a patent. But my background is more young Steve Jobs.

  • 12:47:57

    NNAMDI"People forget he once had no business background. I really need a business person to get the ship moving. Where can entrepreneurs find business partners?"

  • 12:48:09

    BROWNWell, that's a very good question. I think that, again, it relates to the industry that you're in. Whatever industry that you're in, I think, one way to find business partners is to access people who are already working and doing business in that particular industry. That's a good way to find partners. That's a good way to explore relationships with other people in other businesses.

  • 12:48:36

    BROWNAnd it's fertile ground, but you have to get out there and make those network connections.

  • 12:48:43

    NNAMDIOkay. Thank you very much for your call. We move on to your email -- we go on to Luke in Winchester, Va. Luke, your turn.

  • 12:48:51

    LUKEHi, Kojo. Thanks for having me on. In addition to the great advice and the wonderful stories that your callers have provided today, I'd like to offer a couple things from my own personal experience. One is you really got to have a good grasp of why you want to get into business for yourself. You know, really explore that. And the other thing is what constitutes a good idea in your mind may not necessarily be a good idea in your market's mind.

  • 12:49:17

    LUKESo I would agree that market research and knowing what your products and service is going to be is critically important. I've started two businesses in the last 10 years, primarily for the reasons of I really hated what I was doing, so I wanted a way out. And it was really the wrong approach. So I did all the research and everything else, and I thought I had two great ideas.

  • 12:49:38

    LUKEBut I ended up having to go back to work full-time just so I could support my business, trying to do that on off hours, and it really didn't work out very well for me. So, you know, that's my experience.

  • 12:49:52

    NNAMDIThank you very much. Care to comment on that, Emily Coronado?

  • 12:49:54

    CORONADOYeah, absolutely. I think you raise an excellent point. One of the things that we talk about is, really, what is motivating you? And, you know, former callers talked about having low expectations in terms of the returns. Sometimes that's -- it's important to kind of just look in the mirror and talk to yourself about what is it that -- what is motivating you? Are you running from a job that's exploiting you into something where you're self-exploiting?

  • 12:50:21

    CORONADOOr are you, you know, doing something that you're going to have returns over the long term? We do an outcome survey each year about clients' successes and get some feedback. And one thing that we've noticed -- some -- a couple indicators of success of the businesses that we've worked with, the ones that are adding employees, the ones that are adding locations are the ones that are taking a low owner's draw, below $35,000 out of their business, sacrificing, thinking over the long term.

  • 12:50:54

    CORONADOThey're fully formalized. They're fully licensed. They have a legal structure. They pay their taxes. And the owners are working full-time at the business. So it takes a high level of dedication and focus.

  • 12:51:07


  • 12:51:08

    BROWNI want to go back to the previous caller's question, Kojo, when he spoke about barriers. And one thing that I think that entrepreneurs and people in business have to always be mindful, is that banks will take a look at your idea, but they're not necessarily assessing the idea in and of itself. They're assessing the risk of your idea. And people have to really understand that, if a bank says no, it's not so much that they're saying no to your idea.

  • 12:51:39

    BROWNThey're saying no to the risk of your idea. And the impact of that is -- is what they're saying is that we're not sure that we're going to get a return on our investment. And so the first thing you have to show a bank is that the risk that you're taking, which is a barrier, is one that we can overcome, and you will receive a return on your investment.

  • 12:52:01

    BROWNAnd the other thing -- point that I want to make, talk about individuals who want to start businesses is that, in addition to understanding the marketplace, getting your business plan together, assessing your risk and so on and so forth -- everything is great. You've got everything right. Here's one more issue that you need to think about, and that is your exit strategy.

  • 12:52:26

    BROWNA lot of times people will say, my idea's great. I'm financed. I got everything going. Most businesses, unfortunately, they fail within the first five years, and a lot of them do. And so you have to be prepared for that. And having an exit strategy is a part of your business plan development. And I found, and we've found, and with the DCSBDC, is that many of our clients come to us, and they do not have an exit strategy.

  • 12:52:58

    BROWNAnd, oftentimes, you know, they may take savings in their home, or equity out of their home on savings and borrow money from friends and family. And they actually create a worse situation for themselves because they've lost the business. Now, they've got all of this debt, and they don't have an exit strategy as how they're going to move forward beyond that. So having an exit strategy is very important.

  • 12:53:23

    NNAMDII want to talk about some specific populations. Minority populations have higher level of unemployment, and the overall wealth of African American and Hispanic households have declined at a sharper rate than that of white families over the past few years. How are you seeing those issues playing out in your offices? First you, Emily Coronado.

  • 12:53:41

    CORONADOWell, we're seeing a high demand for our services. We're -- we offer bilingual services in the D.C. metropolitan area. So we're seeing a lot of Latino families coming to us, looking at how can they support their families, and looking at small business as one opportunity.

  • 12:54:02

    NNAMDISeeing the same thing?

  • 12:54:03

    BROWNYeah -- well, you're speaking about the Pew study.

  • 12:54:06

    NNAMDIYeah, Pew study.

  • 12:54:08

    BROWNYeah, well, it's very clear that African American...

  • 12:54:12

    NNAMDIFor those who are unfamiliar with it, the Pew Study shows that wealth fell by 66 percent among Hispanic households and by 53 percent among black households between 2005 and 2009, increasing the wealth disparity in the country between those households and white households.

  • 12:54:30

    BROWNRight. And one source of -- and that impact on entrepreneurs generally, but particularly for Blacks and Hispanics, is that you turn to your major asset for equity. Typically, that is your home.

  • 12:54:48

    BROWNAnd given what has happened in the housing market, where African Americans and Latinos have lost a significant amount of wealth because of the burst in the bubble, the entrepreneur is -- no longer has that asset where they can go back and pull out equity in their home to finance their business.

  • 12:55:10

    BROWNAnd now, that wealth -- since that wealth is lost, they're now forced to go to, you know, commercial banks and microlending, when a lot of the times, entrepreneurs will first go to their assets, which are their homes, and try to pull money there.

  • 12:55:26

    NNAMDIBut, Emily, despite that loss of wealth, Hispanic-owned businesses are growing at double the national rate. To what do you attribute that?

  • 12:55:36

    CORONADOI would say that -- that's a great question. I think, from what I've seen, there's a lot of emphasis on the reason for getting into business is about the family, is about looking at stability, looking at this as a source of revenue. And so I would attribute it to that primarily more than I want to create an idea to create franchises. And it's about the family and the home.

  • 12:56:11

    NNAMDIAnother group that faces high unemployment rates, young veterans and military spouses. Let's talk with Jody in Washington, D.C. Jody, you're on the air. Go ahead, please.

  • 12:56:24

    JODYThank you, Kojo. My stepmom and I started a -- the 100 Entrepreneurs Project which seeks to teach entrepreneurs at Walter Reed in the hospital while they're recovering so that they have an idea just to what's out there. Maybe they'll start a business from the information, and maybe they'll, you know, just link up and understand a new business that they might hadn't considered prior.

  • 12:56:51

    JODYSo what we've done is interviewed 100 entrepreneurs, and that's the fodder for the class. And we're hoping the next phase will be to take it online as we form a nonprofit and start to raise money to finance what we're doing.

  • 12:57:05

    NNAMDIAnd this is essentially for veterans at Walter Reed.

  • 12:57:09

    JODYYes. We'll be switching to Bethesda soon. But we'd like to expand across the country and set up workshops that are one or two days using the information that we have.

  • 12:57:21

    NNAMDIAnd, I guess, speaking of information that you have, Darrell Brown, they should know about something called the Patriot Express, which offers new and enhanced programs and services for veterans and members of the military community who would like to expand small businesses.

  • 12:57:34

    BROWNAnd -- that's right. That's a new SBA program, and you can go to sba.org and -- dot gov rather -- excuse me. And you can research that and pull that information up, and you'll learn a lot about that.

  • 12:57:47

    NNAMDII'm afraid that's all the time we have. Darrell Brown is the Executive Director of the Washington D.C. Small Business Development Center at Howard University. Darrell, thank you so much for joining us.

  • 12:57:55

    BROWNThank you very much.

  • 12:57:56

    NNAMDIEmily Coronado is the Director of Small Business Development with the Latino Economic Development Corporation. But LEDC does a lot more than help small businesses. It equips Latinos and other D.C. area residents with the skills and financial tools to buy or stay in a home, join with neighbors to keep their rental housing affordable and start or strengthen a business, correct, Emily?

  • 12:58:17

    CORONADOThank you so much for having me.

  • 12:58:19

    NNAMDIThank you so much for joining us. And thank you all for listening. I'm Kojo Nnamdi.

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