The US government is giving businesses from marginalised communities a head start with a targeted training and development initiative. The Emerging Leaders program offers networking opportunities and classroom training in areas such as attracting investment, managing budgets and securing government contracts. In 2015, participants saw their businesses’ revenues increase by an average of 39%, and members of the program collectively created more than 400 jobs.
Results & Impact
Participating businesses grew their revenue by 39% and collectively created more than 400 jobs, a growth rate of 32%. The revenue growth of all the participants combined topped $65.8 million in 2015. By connecting business leaders with institutions in need of their services, the program helped 30% of participants secure government contracts worth $152 million. The program has a 96% approval rating among participants.
The Small Business Administration
To qualify, businesses must have annual income of at least $400,000 and have been operating for at least three years. CEOs, COOs and other leaders of small companies take part in a seven-month course, which involves 100 hours of learning, including 40 hours of classroom-based activities and 12 hours of peer-to-peer mentoring. The curriculum focuses on ways to access capital, generate investment and develop new tools to enhance their work. The course also has a significant focus on networking, both to help entrepreneurs learn from their peers and connect them with public institutions that could contract their services. Participants finish the program by creating a three-year growth plan with benchmarks and performance targets.
Cost & Value
The course is free of charge for business owners.
Running since 2008
After expanding the program to 48 communities and 800 participants in 2015, growth slowed. Revenue increased by 14% after the second and 11% after the third year. Jobs grew by 14% and 8%.
More than 4,000 small businesses have increased their revenue by an average of 39% through a US accelerator scheme targeted at disadvantaged communities.
The Emerging Leaders program, run by the US Government’s Small Business Administration (SBA), is a federal program aimed at businesses that have the potential to grow in historically low-income communities. It offers networking, capacity building and mentoring for CEOs, COOs and other leaders of small companies, improving their ability to build up their business.
Assessment of the 2015 course showed that participants increased their revenue by an average of $362,000 in the first year. They also created 400 new jobs, a growth rate of 32%. By connecting business leaders with institutions in need of their services, the program helped 30% of participants secure government contracts worth $152 million.
The program is based on the fact that small businesses are better engines of growth in disadvantaged areas than larger corporations. Studies show they keep profits in the area, and bring in more equitable jobs – three times as many as larger companies, according the the SBA.
Once selected, participants are put through a seven-month course of workshops, mentorship and networking. The curriculum teaches participants new ways to access to capital and investment and links them to government resources, established business leaders and tools to develop their work. A network of other business owners provides opportunities to meet with and learn from others in the same situation. Training takes place over 100 hours, including 40 hours of classroom learning and 12 in peer-to-peer mentoring.
The final product of participation in the program is a three-year growth plan, including benchmarks and performance targets, encouraging the participants to sustain their business beyond the training course. Among participants the approval rating of the program is 96%, and 55% of business leaders said they stuck more to their goals and growth plan as a result of taking part.
Unlike more conventional accelerators or mentoring programs the initiative does not target start-ups. To qualify, businesses must have annual income of at least $400,000, and have been operating for at least three years. All types of businesses – manufacturing, retail, professional and food services – are welcome to apply to the scheme.
In 2015, the project expanded to 48 communities and included 800 participants. After the first year, growth continued but at a slower pace: the program had an average revenue growth of 14% after the second and 11% after the third year. Jobs grew by 14% and 8%.
(Picture credit: Flickr/Maryland Gov Pics)