Pacific Community Ventures: Making Small Business Loans Accessible
#SFSBW2019 asked some of our resources to share insights, best practices, and examples of how they help small business owners flourish. Today we hear from Patrick Duggan, Director of Pacific Community Ventures.
Pacific Community Ventures envisions a world of thriving communities where everyone has a fair shake — our mission is to invest in small businesses, create good jobs for working people, and make markets work for social good.
In 2018, we supported 716 businesses with access to capital and mentorship. 68% of supported companies grew their revenues, with 16% year-over-year median revenue growth (vs 6.1% for comparable small businesses). Our clients had 13% job growth, surpassing national and state rates (1.6%), and 2,582 jobs created and retained. 87% of the businesses we funded were located in, or hiring from, low-income communities, and 71% of the small business owners we work with are women or people of color.
Starting a small business is tough, and it’s even tougher when you don’t have family wealth, connections, or if you’re new to the country. That’s why Pacific Community Ventures invests in people. Our BusinessAdvising.org platform leverage technology and volunteerism to provide small business owners with high-quality mentoring, at no cost. Our award-winning platform matches business owners who are beyond the startup phase with pro bono business coaches and mentors who provide tailored, hands-on advising. Small business owners who work with a PCV advisor typically grow revenue 20% each year.
In 2018 we and our partners also piloted Good Jobs, Good Business: a practical toolkit to help small business owners create jobs that boost the bottom line. The toolkit provides practical tips, guidance, and examples for reducing staff turnover and enhancing business results by creating jobs that pay higher wages, offer benefits, provide stable schedules, and help employees build both skills and wealth.
We make small business loans accessible to San Francisco’s real job creators. Women and people of color start more small businesses than anyone else, and those businesses create jobs and opportunities in under-invested communities. These are businesses and communities that aren’t benefiting from “startup culture” and the venture capital that drives it. Women and business owners of color are being left out – they receive less than 5% of venture funding and are five-times as likely to be turned down for loans. As a community development financial institution (CDFI), getting capital into the hands of these job-creating small businesses is our major priority.
In 2018 we funded 31 new California small businesses with loans (averaging $85k). Those businesses had a whopping 33% job growth. 95% of our dollars went to women and people of color, and 90% of our dollars in went to businesses in underserved neighborhoods. We also know that small business owners need more than just a check to be successful, and 2018 was another record-breaking year for our small business advising program. We matched 716 small businesses with a pro bono mentor in 2018. PCV business advisors volunteered 4,729 hours – that’s $709,369 worth of free advice and coaching.
We can’t overemphasize the value of mentorship. Many small business owners begin their companies after pursuing their passions, like baking, designing jewelry, curating a shop, opening a restaurant, even starting a small farm or landscaping company. Then they start wearing all of the hats: CEO, marketing, product development, supply chain, and sales.
The actual day-to-day needs of growing your business, and making that growth sustainable, are beyond the skills of any one person. For example, you may have made a name for yourself at a popup, but now that you’re ready to open a storefront, how do you find investors? Write a business plan? Develop a brand strategy? Navigate city permitting? And who has the time for all this? This is where having an advisor or mentor is crucial. It means having the outside perspective of someone who’s navigated the waters that you’ve yet to dip a toe in.
Maria Palacio is a 5th generation Colombian coffee farmer and founder and CEO of Progeny Coffee. When we met Maria, her production was constrained by the number of hours she could secure at a shared roaster she had been renting. She had one of the best business problems you can have: she couldn’t keep up with growing demand! She wanted to open her own roasting and retail facility but needed the capital to purchase inventory and hire employees. A loan from PCV enabled this expansion, and also gave Maria access to our portfolio of volunteer advisors. In 2018 she grew revenue 2,378% working with us.
Jen Musty, owner of Batter Bakery, identified an opportunity to invest in employee development to boost retention and increase retail sales. She worked with Good Jobs, Good Business and advisor Anne Claire Broughton, Principal of Broughton Consulting, LLC, who brought extensive expertise in employee engagement, particularly Open Book Management. Jen began scheduling regular trainings with the goal of helping them understand why Batter’s products are unique and implemented monthly retail sales targets with engaging and cost-effective rewards to incentivize proactive sales to customers. Selling baked goods is an aesthetic and detail-oriented business, and Jen also used the toolkit to roll out an innovative Instagram training tool.