Without the money and knowledge it takes to get started, a good idea will take you nowhere. It's not hard to have an idea, it's going the next step with it that takes the time and risk required to succeed.
For those in need, The Intersect Fund is there to help. They make it possible for low-income business owners to seek the seed money, consultations, and training they require to succeed.
What is The Intersect Fund?
The Intersect Fund is a microenterprise development group that empowers entrepreneurs in America's urban centers. We offer business training, consultations and seed capital to low-income business owners. Our staff consists entirely of university students, so we deliver our services at an affordable price with low overhead. We are a 501 (c)(3), tax-exempt, non-profit organization.
What does it do?
We offer a suite of services for people who are starting or expanding a microbusiness (a business with five or fewer employees). Our target market is people who lack the resources to gain formal training in business fundamentals and those unable to secure sufficient seed capital to take their businesses to the next level.
When was it launched?
We devised the concept in the fall 2007 and began serving clients in November 2008. Since then, we have worked with approximately three dozen clients, have recruited 20 staff members, and raised about $125,000 from diverse sources including earned income, individual contributions and foundation grants.
What was the inspiration for it?
A friend of mine, Rohan Mathew, and I had been working as editors for the The Daily Targum, the student newspaper of Rutgers University. We had both written about the city of New Brunswick (where Rutgers is located) and developed an understanding of the city's two sides. On one side was a lot of economic redevelopment. New restaurants, buildings hotels and high-rise apartment buildings were springing up, bringing in new business and revenue to the city.
On the other side was a large population struggling to make ends meet. These are the people who are working as busboys and dishwashers at some of the city's most expensive hotels and restaurants. They are the backbone of economic redevelopment, but they reap few of its benefits.
Rohan and I wanted to figure out how we, as college students, could help make better lives for themselves. We found out that many of them have small businesses on the side. They are cooks, cleaners, bakers, hairdressers, handymen, and much more. The main motivation for these entrepreneurs is a second source of income. Often, these people are exercising their true passions in life through these small businesses.
Many of the people we found are excellent at providing a certain product or service. The problem is that they often lack the business knowledge necessary to run their enterprises efficiently. To address this issue, we created a crash course in business basics. Over the course of eight weeks, our instructors cover topics such as budgeting, managing cash flow, marketing, taxes, and registering a business. We ask our clients to step back and evaluate their businesses, to make sure they are engaging in the necessary planning and preparation to ensure as high a chance of success as possible.
The other problem facing the entrepreneurs we work with is access to capital. Because many of these people lack collateral or a good credit rating, a bank loan is out of the question. Also, securing commercial capital requires compiling years of detailed financial records, which many of our clients are unable to do. We provide small loans through a peer-lending system: groups of our entrepreneurs work together developing each other's business plans, and the ability of one entrepreneur to get a loan depends on his group members' paying back the ones they have taken out. We try to build a sense of community among the entrepreneurs we work with, and our staff members provide the personal attention necessary to ensure our clients get as much out of our programming and funding as possible.
What are your requirements for those who can receive your help?
Our services are open to everyone, but targeted toward traditionally underserved groups such as Latinos, African Americans, ex-offenders and the disabled. The business training course costs $100, with scholarships available for low-income clients.
How does someone apply?
Entrepreneurs interested in our services are welcome to contact us (firstname.lastname@example.org) or visit our website for more information (www.intersectfund.org). At the moment, the bulk of the services we offer are available to residents of Central New Jersey. But we are looking to expand elsewhere in the Northeast and, eventually, nationwide.
During the creation of The Intersect Fund and after, what lessons has the experience taught you?
One of the most important things we have gained from the experience is that price equals value. When we started our training course, we offered it for free. Big mistake. We didn't attract many clients, and few of the ones we did recruit applied themselves to the program.
That's when we decided to begin charging for our training program. The program is still affordable to the clients we target, but we can convey to them that getting started in business requires putting some skin in the game. The more of a personal commitment we require, the more our clients gain from the course.
Do you have any pieces of advice that you'd like to share with entrepreneurs that are just getting started?
I would have to say to think big, and try not to let your limitations hinder you. As a student-run operation, we had to work hard to prove our credibility. Fundraising was a big challenge at first, as was proving to the community that we could offer something of value to low-income entrepreneurs. But we kept developing our product and our pitch until we had something we were really excited to offer to the public. Along the way, a couple of funders and community partners took a chance on us. We got some seed capital of our own, and we hosted our first series of classes. This helped us build the momentum necessary to expand. Eventually, we developed a base of satisfied customers and a roster of prominent donors. There is still a lot to be done, but the services we offer are needed now more than ever.