Despite underfunding, they help small firms
Milwaukee Journal Sentinel
By JOHN SCHMID
Posted: Dec. 2, 2007

Paulette Smith didn't choose to be a business owner. But when her 34-year-old son, Stacey Currie, was killed in a inner city shooting three years ago, Smith took over his auto-detailing business, determined to keep it going despite her admitted lack of experience.

Paulette Smith, helping Gary Moore (inside car) at Ace Auto Wash and Detail, knew little about business when she inherited Ace after the death of her son, Stacey Currie, three years ago. A business coach is teaching her the ropes.

"This business is my gun to fight back," Smith says. "This business represents the integrity of my son, who was murdered in cold blood because of the social ills of this city."

Sales remain slow, and Smith's north side garage, with a three-person crew, operates below capacity. But since April, Smith has been receiving regular help from a business coach provided by the Urban Entrepreneur Partnership, an initiative launched with fanfare one year ago that has yet to receive any of the federal funding that was promised.

Despite the lack of government funding, and even as other supporters have fallen away, the partnership has managed to gain some traction in Milwaukee with a handful of local backers. The agency, which released its first annual report Friday, so far has provided assistance to 22 small and start-up businesses in neighborhoods that investors routinely avoid.

"There is an incredible amount of entrepreneurial talent in the minority community that goes untapped," said James Connelly, a Milwaukee attorney and venture capitalist who helped found the partnership.

Tina Beckett, the partnership's executive director in Milwaukee, said her agency is working to connect Smith with a fleet service or dealership to channel a regular flow of business to Smith's garage. Smith's partnership coach, Ylonda Glover, is guiding the business's reincorporation as a limited liability company.

Glover is one of 11 coaches working for the partnership, which is housed inside the offices of the Urban League's Milwaukee affiliate at 435 W. North Ave.

Last March, the partnership began recruiting business people such as Glover to serve as coaches, and training them in "intrusive coaching" - a one-on-one approach that walks each entrepreneur through the transition points of growing a self-sustaining, for-profit business.

Today those coaches are working with 22 small firms as diverse as an art gallery, a house-painting crew, an air-conditioning contractor and an industrial-safety consultant.

Another 50 entrepreneurs are awaiting help as soon as the partnership can find more coaches, train them and raise the funds to pay them.

"While I'm not doing cartwheels about any hard metrics, I think we've established a strong foundation," Beckett said.
Started in 5 cities

President Bush launched the Urban Entrepreneur Partnership in 2004 in a speech at the National Urban League's convention, saying it was meant to become a national movement. Bush named five cities for pilot programs "where minority enterprise can receive business training": Atlanta, Cincinnati, Cleveland, Jacksonville and Kansas City.

Activists in Milwaukee, home to the nation's eighth-highest urban poverty rate and a black male jobless rate hovering above 50%, lobbied for and eventually won inclusion as the sixth partnership city. The slow-growth region, they argued, would never reach its potential with an economic depression in its urban heart.

Backers said the partnership would be an anti-poverty initiative like no other. It was not to be a social services agency. It would not make loans. It would be "private-sector driven," the White House said, meant to coax the dream of business ownership out of neighborhoods that statistically have a low yield of start-ups.

Government data show that 80% of all inner-city employment comes from small businesses. Partnership leaders, meanwhile, insist that they broker only deals that justify themselves on their own business logic.

"More of the same will always get you more of the same," Connelly said.

Bush handed oversight of the program to Daniel Heath, a deputy director at the National Economic Council. Heath visited Milwaukee several times and supported Milwaukee's efforts.

But Heath left the White House last month to take a high-level job at the International Monetary Fund. Al Hubbard, who headed the National Economic Council while the partnership got started, also recently left the White House.

Donet Graves, a Washington, D.C., attorney who worked with Heath to spearhead the national Urban Entrepreneur Partnership movement, says he is unaware of anyone still at the White House to advocate for the program.

Meanwhile, after Democratic U.S. Rep. Gwen Moore issued a news release in 2006 to announce that she had won $150,000 in federal funds for the Milwaukee partnership, the money was stripped from the budget.

Moore, speaking Friday at the partnership's anniversary banquet, said she is lobbying to restore $200,000 for the program in the current budget.

Another blow to the program came when Johnson Controls Inc., a Fortune 500 company, backed away from its own inner-city economic stimulus plan.

Called MetroMarkets, that plan was intended to generate business for the company's Milwaukee-based division that upgrades and manages buildings. The strategy was to tackle 10 city blocks at a time, promoting investment in inner-city businesses, schools, job training, housing and sports centers. Supporters of the partnership and the MetroMarkets strategy said the two would complement each another in rebuilding inner city economies.

But Johnson Controls backed away from MetroMarkets after the program lost support in the company's own boardroom and never managed to win anyone's interest in Mayor Tom Barrett's administration.

Also disappointing, Connelly said, has been a lack of support from the U.S. Small Business Administration. Its administrator, Steve Preston, and several aides flew to Milwaukee a year ago for the partnership's launch. Preston promised that "urban markets absolutely will be a priority for me."

"The SBA has not done a thing," Connelly said.

Eric Ness, the local SBA administrator, said the agency has held training classes in the Urban League building to be closer to the partnership offices, and he gave a speech at a partnership franchising workshop. SBA services are available to all who need them, Ness said.
A movement in disarray

While the Milwaukee partnership claims steady progress, it started as part of a national network that is in disarray.

The Urban League's national headquarters said the five founding cities have dropped out of the partnership program. The league has converted the partnership centers in those cities into business centers that operate without partnership affiliation.

In Milwaukee, however, the Urban League affiliate has stuck with the original model.

Graves is working to set up a partnership center using the Milwaukee model in Washington, D.C. He said he, Connelly and others also are working to create a new national partnership organization. They continue to work with the Ewing Marion Kauffman Foundation in Kansas City, which aims to foster entrepreneurialism and wrote the manual on intrusive coaching.

Fund raising also has been uphill, said Connelly.

In its first year, the partnership had a budget slightly over $265,000, of which nearly 70% goes to pay coaches (about half of the coaches work for free). In its first year, Connelly himself was one of the Milwaukee program's biggest donors, via the Connelly Family Foundation, along with Aurora Health Care Inc., the state's largest medical system.

In her north side garage at 4911 N. 31st St., Smith points with pride to the Porsches and other upscale cars that she and her crew make look like new, from the wheel wells and engine compartment to the upholstery and dashboard.

She and Glover, her coach, hope they can expand the $60,000-a-year business to encompass two locations with as many as 15 employees.

"Her goal," Glover said, "is to become a million-dollar business."