NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Pushing the ’go’ button (to borrow Francisco’s brilliant phrasing), is much harder than it sounds. Some days, I’m convinced that I misplaced mine, lent it to someone who forgot to return it, or never had it at all. Regardless, I think about what makes people go, hoping to divine the ingredients of the secret sauce. What I’ve realized recently (and what Francisco pointed out in his post), is that ’going’ is part conscious choice, part inspired possession. It’s about being completely consumed by an idea to the point where your doubts about how, what, when, and who (Me? No, but maybe you.) completely melt away, if only for a blissful moment. Then comes the inspired decision-will you or won’t you?

I’ve also noted that it helps to watch the creative process unfold in others. To that end, I’d like to share the story of Big Red MicroCapital. BRM MicroCapital is a “student-run organization that spurs microenterprise development by assisting self-employed individuals to reach their business goals.” Several Johnson School students, (now newly-minted alums) spent more than a year bringing this concept to life. The team is comprised of Andrea Findley (Director of Client Support Services), Taryn Goodman (Director of Community Partnerships), Ryan Kelley (Director of Finance), Kandea Mosley (Director of Marketing), and Mike Pezone (Director of Operations).

Thanks to their efforts, the Johnson School community, and hopefully, the citizens of Tompkins County, will be better for it. I had the opportunity to sit down with Taryn, who graciously offered to speak on behalf of the group. Introducing BRM MicroCapital…

Tayo Akinyemi, Nextbillion.net:
What does BRM MicroCapital do exactly?

Taryn Goodman, BRM MicroCapital:
We have a business coaching program and offer financial support to low income entrepreneurs in Tompkins County. (Low income describes people who earn less than 80% of median income in a county according to HUD data.) The coach’s job during a typical four-month engagement is to understand what the entrepreneur wants to do and help him/her create a process for achieving their goals.

In terms of financial support, we take on what a traditional bank would call “risky loans”. Loans are typically small ($300-$1500) and short-term. We also require borrowers to enroll in the coaching program so we can help them reach repayment status. Although our interest rates are slightly higher than bank rates, we can adjust them when it makes sense to do so, for example, if a community recommendation is made.

Tayo Akinyemi, Nextbillion.net:
How was BRM MicroCapital founded?

Taryn Goodman, BRM MicroCapital:
BRM MicroCapital was conceived 3-5 years ago by students who wanted to launch an international microfinance fund. Given the difficulty of creating an international program, someone had the idea to do something local. Last year Jeff Fuchs
(JGSM ’08) revitalized the idea, started creating a strategy around it, and began meeting with local community members. He discovered that there was a need to help people who couldn’t be served by the normal banking system. As a result, he recruited a few other students to join the team. They did months of research to understand what other programs existed, what worked, and what didn’t. Eventually, they were referred to theAlternatives Federal Credit Union (AFCU), now a BRM partner. It’s great because we benefit from the AFCU’s expertise with lending and the community; it’s one of the premier credit unions in the nation. Additionally, AFCU assists us by processing our clients’ loans and matches our funds.

Tayo Akinyemi, Nextbillion.net:
Don’t these types of services already exist in Tompkins County? How does BRM fill an unmet need in the community?

Taryn Goodman, BRM MicroCapital:
We didn’t actually know what the need was when we started. It was hard to tap into, but we partnered with the Greater Ithaca Activities Center, the Women’s Opportunity Center, Tompkins County Work Force, and several community leaders to learn the landscape. We met great people with great ideas. Ithaca actually has a very entrepreneurial feel to it. People have the desire to create but may not have the financial ability or the background to do so. They also have families, jobs, and other daily requirements that don’t allow them to put the time and energy into really figuring things out. We wanted to help those people.

Also, it’s assumed that people who don’t get loans don’t deserve them. Clearly, this is a miscalculation and a misrepresentation. Sometimes people just need another pathway, an opportunity to flourish.

Tayo Akinyemi, Nextbillion.net:
How did you find your clients? What types of businesses do your clients have?

Taryn Goodman, BRM MicroCapital:
People came through the AFCU website but we found others through the research that we did. We cultivated relationships with people who could help us understand what was going on in the community. Our plan is to continue to reach out through community organizations.

In terms of the businesses, we have a woman who does transcription, someone who does composting and landscaping for private homes, a clothing store owner, a housekeeper/personal assistant, and a small scale farmer.

Tayo Akinyemi, Nextbillion.net:
What have been your major accomplishments?

Taryn Goodman, BRM MicroCapital:
Our biggest accomplishment has been getting the program running, because we had no idea what it would look like when we started. Now we have 12 coaches who are rising 2^nd year MBA students and 5 entrepreneurs in the program. We have also elected the new board, so we know the organization will be around next year. It’s a great feeling and it’s kind of unbelievable to see. We actually got an email from an Executive Director at United Way who’s excited about the program, and wants to connect us to someone who’s trying to create a micro-loan program in Wisconsin. We told them that we were still in the pilot phase, but it’s great to know that there’s interest in what we’re doing, and that our efforts could extend beyond Ithaca.

Tayo Akinyemi, Nextbillion.net:
Your biggest challenges?

Taryn Goodman, BRM MicroCapital:
We had really difficult internal conversations about program requirements. What should the income cut-off be? Should we require six months of revenue because we’re not equipped to handle start-ups? It was challenging because we couldn’t foresee how these decisions would impact our program. We were also concerned about lack of interest in it, so we wanted to target the right people. But initially we didn’t know who the right people were.

Tayo Akinyemi, Nextbillion.net:
What is the strategic outlook for BRM? What do you hope to see in the future?

Taryn Goodman, BRM MicroCapital:
Our strategic vision is to become the premier, student-run microenterprise fund. We want to share our vision with other business schools and create a model that others can replicate. Many schools belong to communities like ours and have students with similar passions. It would be great to share our vision with them.

There you have it. To read more about BRM, please visit the profile at the Center for Sustainable Global Enterprise.