Economic Development Programs
The primary mission of SBCC's economic development strategy is to facilitate community development within the South Bay cities of Los Angeles County by providing programs structured to revitalize the physical, economic and social life of the community. In order to realize this objective, SBCC has developed and implemented a comprehensive approach to community economic development that includes business development, technical assistance and training, and career pathways development and training.
SBCC's Economic Development Department invests heavily in Community Economic Development, which is the process by which local community residents build organizations and partnerships that interconnect profitable businesses and industries with other interests and values - for example, skills and education, health, housing, and the environment.
Community Economic Development allows for a larger number of people to become involved in improving their communities by describing how their communities should function and change. Additionally, by investing in wealth creation in the form of small business development, Earned Income Tax Credit (EITC) and high-wage career pathways training, more organizations will look for ways to make their actions and investments reinforce the wishes and intentions of the community. Consequently, Economic Development becomes a means to accumulate wealth and to make the local way of life more creative, inclusive, and sustainable.
At its most effective, SBCC's economic development strategy is characterized by:
- A multi-functional, comprehensive strategy of on-going activities, in contrast to individual economic development projects or other isolated attempts at community betterment.
- An integration or merging of economic and social goals to bring about more far-reaching community revitalization.
- A base of operating principles that empower the broad range of residents for the governance of development organizations and their community as a whole.
- A process guided by strategic planning and analysis
- A businesslike financial management approach that builds both ownership of assets and a diverse range of financial and other partners and supporters.
- An organizational format that is nonprofit, independent, and non-governmental, even though for-profit or governmental entities are closely linked to its work.
SouthBay Entrepreneurial Lending Fund [Self] (2008)
Small businesses and microenterprises have an important role to play in low- and moderate-income communities. Often they are the engines of growth in these neighborhoods. The SELF program was designed to provide capital for individuals who wish to start their own businesses and for small disadvantaged business owners who are looking to expand or are in need or temporary financial assistance to compete in the market place. The program was also designed to assist these individuals in gaining access to federal and private procurement markets.
The focus of the program is to provide business development support, such as mentoring, procurement assistance, business counseling, training, financial assistance and other management and technical assistance.
Program Overview
SELF's goal is to contribute to the revitalization of LA County South Bay communities by providing full and part time permanent jobs for low income residents, expanding the community's tax base, and giving disadvantaged individuals more control over their lives through ownership of businesses. The program will assist community residents in starting their own businesses and in preparing small disadvantaged business owners for procurement and other business opportunities.
Program Goal
SELF expects to graduate 30 residents per year and help implement or grow 10 small businesses within the same timeframe.
Program Description
SELF, in collaboration with Quantum CDC and the PACE Women's Business Center, offers small business development training and support services, which include personal and motivational training, personal counseling, and case management. The 10-session small business development course is for residents of LA County Service Planning Area 8 (SPA 8) and covers all aspects of business development, ranging from mission statement development and goal setting, to business plan design and budget, and cash management and allocation.
The curriculum is presented as follows:
Session 1: Entrepreneurial Keys to Success
Session 2: Intro to Business Plan: Defining Mission and Setting Goals
Session 3: Market Analysis: Customers, Competition and Industry
Session 4: Marketing: Product/Price
Session 5: Marketing: Place/Promotion
Session 6: Legal Aspects: Choice of Entity and Contracts
Session 7: Small Business Taxes (BOE, IRS, EDD)
Session 8: Recordkeeping/Accounting for the Small Business Understanding Financial Statements
Session 9: Budgeting and Cash Management
Session 10: Access to Capital: Financing Your Business
Business Plan Development
As part of the training, participants are required to complete a business plan. This document is a business planning tool and it is needed to secure business financing. Participants begin their business plans during the second session of training. Participants complete their plans during the ten weeks and following the end of the classroom training. SELF's Training Counselors assist each participant in completing their business plans.
In addition to the training, SELF also offers a "Small Business/Entrepreneurial Support Services" program. The program is offered to SELF graduates and provides consulting, technical assistance, and additional training. Services include access to shared office space and conference rooms, a receptionist with answering service, and use of computer equipment with business software and Internet access. Assistance with accounting and record keeping activities, small business tax preparation, and business formation and compliance are also available. The program provides additional connections to financial resources including access to mainstream business banking, business credit and financing, and IDAs (Individual Development Accounts) for micro-enterprises. Additionally, the program will host several topical workshops on key business matters and ongoing networking mixers to connect small business owners with opportunities and other resources to build and grow their businesses.
Business Implementation
Upon completion of the training program, all participants who met all requirements and sustained an attendance record of 80% or higher will be eligible to apply for a small business loan/microloan for business implementation or expansion. Microloans for small business development are capped at $1,000 per applicant, while small business loans can up to $5,000 per applicant, depending on cash flow, business plan and liquidity.
Additionally, SBCC may also offer business owners mini-grants to access "virtual office" services at Quantum CDC and/or additional small business services. For individuals who are starting a new business, SBCC will assist with location scouting, advertising (through SPA network) and other technical assistance. For those who are attempting to grow their business, SBCC will provide technical assistance and support.
Program Activities
Participants Alejandra Tepatl and Joaquin Salazar recently created their business plans. Both are in the process of opening a restaurant once they meet certain city requirements such as licensing, etc. Mr. Tepatl and Mr. Salazar are being provided with technical assistance through the SELF process, which will guide them through the permit and licensing process. During the next phase, their instructor will meet with them at least once per week, to assist them with implementing their business plans.
Program Outcomes
- SELF has 20 individuals currently in training and one graduate.
- Martin Padilla, a graduate of the first program cohort, recently opened his restaurant "Mi Pueblito San Juan Restaurant," located in Wilmington. To-date, the restaurant is in good financial condition and is host to many local functions.
- Martin Padilla, a graduate of the first program cohort, recently opened his restaurant "Mi Pueblito San Juan Restaurant," located in Wilmington, CA. To-date, the restaurant is in good financial condition and is host to many local residents.
Research has demonstrated the large economic impact the Earned Income Tax Credit (EITC) has in cities throughout the U.S. For instance, Los Angeles County residents received over $2.5 billion in EITC in 2008, and nearly one out of every four families received an average credit of $1,750.
According to Internal Revenue Service, for the 2007 tax filing season the County of Los Angeles lost an estimated $500 million dollars in unclaimed EITC refunds for its residents. The IRS estimated that approximately 20 percent of eligible individuals are not claiming the EITC. This figure represents thousands of families and millions of lost monies to Los Angeles County's economy and working poor households. Many tax preparation services offer not only assistance in preparing and filing returns, but also refund anticipation loans and other products intended to help taxpayers obtain cash quickly. For these services, tax filers pay dearly; for example, for refund anticipation loans the interest rate is an average of 150 to 200 percent. Further, individuals are paying an additional 5 to 7 percent in check cashing fees. The high-cost tax preparation and check cashing services and products can significantly diminish the economic benefits of the EITC – both for low-income working families and for the neighborhoods in which they live.
Program Overview
SBCC, in partnership with the Los Angeles County Children's Council, the Los Angeles County SPA Council and Quantum CDC, to operate the "Greater Los Angeles Economic Alliance" (The Alliance), which provides assistance to low- and moderate-income working families and individuals in understanding and claiming the Earned Income Tax Credit (EITC). The program provides free income tax preparation services to people who live or work in the Greater Los Angeles community, connecting them to mainstream banking services, financial literacy workshops, and other financial supports and asset building opportunities. Additionally, the Alliance will also provide utility rebate and credit information, weatherization services and other needed community programs. This collaborative is a grassroots vehicle that targets many community residents (and non-residents) who have traditionally not been aware of or educated on these services.
The Alliance's community organizers will reach out to the vastly underserved communities within Los Angeles County, which represent approximately 28% of all U.S. families that do not file for EITC. This amounts to approximately $280 million of unclaimed federal funds, which would otherwise be inserted into the local community. The goal of the Alliance is to file 3,500 tax returns and open 350 new bank accounts during the 2009 tax season. Through this program, the Alliance will provide alternative options for the low-income working families of Los Angeles County who struggle to make ends meet, allowing these individuals to keep their full tax refund and save hundreds of dollars in high-cost fees.
Program Activities
The Alliance began work in the community in January 2009. With funding support from Wells Fargo Bank and the Los Angeles County Children's Council, the Alliance opened 30 free tax site locations. These sites are open several days per week from February through April. The Alliance will work closely with the SPA NACs (Neighborhood Action Councils), and local communitybased organizations, as well as churches to integrate the tax assistance program into their existing operations. Past experience has shown that this form of programmatic integration is well received by community residents and serves as an enhancement to the operations of the partner agencies and organizations involved.
Program Outcomes
To date, more than 4,750 tax returns have been prepared, generating millions of dollars in tax refunds and helping low-income families save thousands of dollars in high-cost fees. Additionally, Wells Fargo is on-site at many locations, opening FREE bank accounts for un-banked individuals. Within the first month of operation, we opened nearly 100 bank accounts. In January 2009, the Alliance hosted the LA Tax Day at the Crenshaw Christian Center in South Los Angeles; the event was full to capacity. On this one day, staff and volunteers prepared over 130 tax returns. Clients were able to have current and prior year returns prepared, as well as apply for an ITIN (Individual Taxpayer Identification Number). Not only were tax preparation services made available, but Wells Fargo Bank was on site to open FREE bank accounts and provided valuable information and hosted mini workshops on financial matters.