An analysis of community-based organizations' efforts in small business assistance : a case study of the CDC Community Business Network

Abstract

Efforts by community-based organizations (CBOs), such as community development corporations (CDCs), have incorporated small business development into their overall neighborhood revitalization efforts with mixed success, especially when working with minority, low- and moderate-income entrepreneurs. These entrepreneurs often lack the technical skills and access to capital that they need to start, expand, or maintain their businesses. They face linguistic and social barriers that isolate them from traditional lenders and small business assistance providers. This thesis seeks to 1) provide a context for community-based organizations' roles in small business development for those unfamiliar with the challenges involved in minority, low- and moderate-income business development and 2) provide CBOs interested in pursuing small business development with some comparative guidelines for their own efforts. The thesis identifies three elements that contribute to the success of small businesses-social, human, and financial capital. Minority, low- and moderate-income entrepreneurs often face deficiencies in one or more of these elements. Community development corporations have attempted to provide technical assistance to businesses in their communities to address these issues, but are often faced with their own constraints of limited staffing and resources. One collaboration of ten Boston area CDCs is attempting to break down these constraints and combine and share the expertise of the member CDCs. This collaboration known as the CDC Community Business Network (CBN) provides one-on-one neighborhood-based assistance yet also provides access to the larger experiences and contacts of the other member CDCs. Even with the shared resources of its member CDCs, CBN still faces its own challenges of limited skills, capacity, and funding; an unclear role among other technical assistance providers; and the need to develop effective collaborations with other stakeholders in small business development. The thesis examines two other small business assistance networks and looks to them for lessons in addressing the deficiencies in the three types of capital and the challenges facing CBN. The two comparable networks offer alternative organizational and operational approaches to small business assistance. This thesis asserts that small business assistance organizations must have an understanding of the deficiencies in social, human, and financial capital in order to effectively assist minority, low- and moderate-income entrepreneurs.