Chris O' Conner has grown his creative business from a dorm-room enterprise to five people in nine years, and he's seeking ways to continue growing Memphis-based Prodigi Arts. He joined a daylong cram session for budding entrepreneurs Thursday at the University of Memphis to tap into the expertise of business professors and executives who are considered experts in growing inner-city businesses.
O' Conner said 30 minutes into a presentation by New York University management professor Sonia Marciano, he was convinced that the Inner City Capital Connections program would be a wise investment of time. He liked Marciano's examples about how companies differentiate themselves from the competition. Uncorking one-liners like "if you build it they are not coming," and telling participants that "being the best you can be" is not a sound business goal, Marciano said businesses must think strategically about their products and how they make or deliver them.
"We need it to matter. We need it to matter to the customers. We need it to be communicable. We need it to be inimitable," Marciano said.
O' Conner's business was one of 67 represented at an executive education session at the FedEx Institute of Technology to kick off several months of intensive training for entrepreneurs from economically stressed areas. Speakers included Harvard Business School professor Steven Rogers, and executives from Next Street, a Boston-based merchant bank that focuses on small and mid sized urban companies.
Region Bank is the organizing sponsor that identified the program and brought it to Memphis. The Greater Memphis Chamber, BUtler Snow law firm and Butler Snow Advisory Services LLC joined in as sponsors.
"If we can help them grasp and understand what's the next step for their small inner-city business, and they're able to take the next step through debt, equity, acquisition or whatever, they will hire more people, their business will be bigger, our community will get larger," said David May, area president for Regions, which has committed at least $50,000 to the program. "With the tremendous market share we have in the community, we win too," May said.
About half of the participants Thursday were from Tennessee, with others coming from the Southeast and as far away as California, Regions spokesman Jeremy King said. Of greater Memphis's 105,000 businesses, about 25,000 businesses are minority or women-owned, Greater Memphis Chamber senior vice president of community development Dexter Muller said. "Unfortunately, 90 percent of those have no employees. They have only the principal. That's what we're here today to change."
The Chamber got behind the program because officials believe building inner-city business is a key to creating more middle-class jobs. The Initiative for a Competitive Inner City, a Boston-area nonprofit that organizes Inner City Capital Connections, found in 2011 that 70 percent of inner-city companies have access on average to one-fourth of the capital they need to compete in their industries. These under-capitalized businesses are 50 percent more likely to have a minority owner, and their owner equity averaged 37 percent of capital, compared to 16 percent for well-capitalized firms. May said financing is the meat of the program, after businesses undergo a rigorous self-examination. To figure out the right kind of financing, May said, "they've got to understand their business much more thoroughly. They had a great idea. They're an entrepreneur. It worked. They got into business. Now what? How do I take it to the next step?"
O' Conner, 30, a communications graduate of Middle Tennessee State University, started his business at college in 2005, but said it really began to solidify about three years ago. It is located at Emerge Memphis, a business incubator.
"We help brands connect with their target audience with animation, video production and motion graphics. Initially, it was just myself working from home. I have animators and videographers and other creative professionals, " O'Conner said.
"I read a lot of business books. The more you read, the more you find you get a lot of the same answers. I was curious to see if I would be able to learn anything new and not just get the same old how you build your business answers."
Michael Bates, 55, an engineering consultant from Long Beach, California, runs a one-person shop. M.B. Technical Services, that works with industrial, manufacturing, government and military clients. He teams up with other professionals on projects, but would like to add employees to the business. Next up for Inner City Capital Connections participants are follow-up webinars and virtual coaching. The program will head to New York for a reception and conference with investors Nov. 19 and 20.