VOL. 7 | NO. 24 | Saturday, June 7, 2014
Regions Partners in Inner-City Business Program
By Andy Meek
To use a metaphor to illustrate the purpose of a new program to help inner-city businesses in Memphis grow, the program represents the difference between focusing on rowing your boat and scouting the horizon for a new port to direct your boat toward.
Regions Bank and the Massachusetts-based Initiative for a Competitive Inner City are launching an effort that helps businesses otherwise focused on successfully navigating the here and now take the necessary steps to take their business to a new level.
(Memphis News/Andrew J. Breig)
It’s called Inner City Capital Connections, and it includes a free seminar plus a range of other benefits designed to connect inner-city businesses with the capital needed to fuel growth.
David May, West Tennessee-area president for Regions, said the program is especially intended to help entrepreneurs who may have come up with a successful idea or plan and have achieved a level of success but remained stuck on a plateau for some time “and who need to get to the next level.”
The pressures of keeping things running smoothly also aren’t necessarily conducive to the growth that ensures their business’ sustainability and fuels its competitive edge.
“We marry growth with access to capital,” said Hyacinth Vassell, who manages the Inner City Capital Connections program. “The ideal participant for this is a business owner interested in growing their business and understanding how to do so, or the business owner looking for capital. A lot of our participants say this is a crash MBA for them.”
May described the program as a win-win for all involved. Investors, for example, aren’t taking on the kind of risk investing in these businesses that they would in a startup incubator, because they’re not betting on an idea that might not work. They’re betting instead on proven business owners.
Participants in the program run established businesses and have at least $2 million in revenue. And the program is able to be that “crash MBA” because it includes a range of benefits, such as a comprehensive training seminar, interactive webinars, individualized coaching and a conference for businesses in underserved areas.
“The Initiative for a Competitive Inner City is an organization that was founded by Michael Porter, a Harvard business school professor, in 1994,” Vassell said. “We’re a nonprofit research and strategy organization, and we pride ourselves on being the leading authority on U.S. inner-city economies.
“Our mission is to drive economic prosperity in inner cities through private sector investments to create jobs and wealth for local residents.
“We see Inner City Capital Connections as a program on the ground to really connect those businesses with what they need.”
And it’s having a significant effect. Companies surveyed in 2013 that participated in the program are estimated to have created or helped create almost 5,000 jobs, hiring an average of 40 percent of their workforce from within inner cities.
That’s according to ICCC, which explains the program is designed to “stimulate equity capital flow to underserved inner-city markets by matching inner-city businesses with investors.”
ICCC says such businesses usually raise about 20 percent to 50 percent less growth capital than non-inner-city businesses, a statistic that, by itself, underscores the need for such a program. That funding disparity can put a ceiling of sorts on the growth potential – and the job creation – of those inner-city businesses compared to their non-inner-city counterparts.
“The seminar that’s part of the program is an executive education that’s an immersion program, because it goes over all of the levers that affect a company’s growth as well as a company’s ability to access capital,” Vassell said. “And it’s tailored to the participants.”