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Can tiny loans give life to entrepreneurial dreams? MicroBiz Buffalo links people to money and advice

Dan Toner spent a few years sewing costumes for university plays, made a black wedding dress for a friend who adored it, and began to think about opening a store with his own fashion designs.

After he graduated with a theater degree from the University at Buffalo last summer, he started computer research that led, link by link, and by chance, to help from a fledgling entrepreneur-help organization called MicroBiz Buffalo.

It is a collaboration that includes 10 business aid groups, officially launching this month, with $50,000 in Citibank grant funding to pay for part-time coordinator Jerry Turcotte. On Feb. 8, MicroBiz and Turcotte will also debut a new four-week, business introduction class for people such as Toner who want to know where to begin.

The collaborators -- from community centers to business development centers -- hope that by working together, and referring people to the right organization, more entrepreneurial wannabes will get help and loans, no matter what stage of business development they're in.

"It's always hard to find something you don't know exists," said Toner, 26, a clerk at Radio Shack who doesn't expect to open his shop for another two years. "I'm glad they're trying to get it all together."

The plan for MicroBiz Buffalo, with office space in the converted Grant Street library, began when the local branch of a national nonprofit community aid organization sought to help entrepreneurs. As the Buffalo office of the Local Initiatives Support Corp. worked to launch a business-incubating plaza, which has since opened on Jefferson Avenue, lots of would-be business people were interested, but unprepared.

"They didn't have the basic underpinnings of what it would take to run and establish a business successfully," said Michael Clarke, program director at the downtown LISC office that solicited the Citibank funding grant. "There were resources and people weren't taking advantage."

The idea of zeroing-in on small "micro" businesses was celebrated last year when Muhammad Yunus and the Grameen Bank he founded in Bangladesh shared the Nobel Peace Prize for fighting poverty. The bank gives "micro" credit -- small loans -- to poor people who need amounts of money too tiny to interest traditional banks. Yunus started the Grameen Bank after loaning $27 to 42 village craftsmen. In the more than two decades that followed, the bank has lent almost $6 billion. Today nearly 7 million borrowers have loans averaging a little more than $100, according to the Nobel Web site.

MicroBiz is right to concoct a Western New York version of such micro aid, said Arun Jain, a marketing professor at the UB School of Management.

"In a way, it is a concept beyond Grameen Bank," he said of the consulting help available along with loans. "These are the type of people who cannot afford to hire a consultant."

Toner said he serendipitously found the sort of help he needed last summer after he saw a notice about a breakfast meeting in South Buffalo for entrepreneurs on Buffalo State College's Small Business Development Center's Web site.

It was a newly developed networking event, to be reinstated this April, arranged by Old First Ward Community Association on Republic Street, a MicroBiz member. There, Toner met Turcotte, who gave him a CD-ROM with IRS small business tax rules and a brochure about doing a business plan.

The information made Toner realize that starting a business was more complicated than he had imagined. He read that only a small percentage of new businesses last longer than three years.

To prevent his future business from meeting a similar fate, he wants to have $10,000 of his own money to invest. He is also slowly developing a business plan. Now he is thinking about how to define the target market for the clothes he has yet to design. "Something a little more upscale than you might find at Target," he offered. "There's a lot to do . . . It's better to realize this now than after you've started."

>No new services

The idea of MicroBiz is to make the resources that Toner happened upon more obvious to more people. "MicroBiz Buffalo exists solely to publicize basically what exists already," said Turcotte. "There's a lot of services here in Buffalo and people don't realize it."

The 10 MicroBiz members with services for entrepreneurs include the Buffalo Economic Renaissance Corp., the Canisius College Women's Business Center and the retired executives and business owners who do coaching as members of SCORE, an affiliate of the U.S. Small Business Administration.

Members, listed at, also include a newly created collaborator that is grateful for the potential business people MicroBiz may attract. In an effort to help the economy of the nearby West Side neighborhood, Westminster Presbyterian Church on Delaware Avenue formed a new entity -- Westminster Economic Development Initiative, or WEDI.

WEDI will have loans of $5,000 and less for people who are not eligible for bank loans. The Enterprise Center, a lender that specializes in small business loans, will manage the $200,000 that the church's $100,000 in collateral will allow.

WEDI will also recruit church and community members to act as SCORE counselors, who will use the space in the old Grant Street library to meet.

"All of these things fit together kind of uniquely," said John Perry, president of the WEDI board. "We want to focus where we can make a difference . . . I think in 10 years, with all of this effort, we will be very happy with what Grant turns out to be."

MicroBiz members from other parts of the city expect to draw other entrepreneurs. MicroBiz has been developing an intake form that the organizations will share. This way anyone who walks into a member office -- the Old First Ward center, or the Canisius College Women's Business Center, for example -- will be referred to the right place. A person may need basic counseling from a retired SCORE executive volunteer, or more immediate business plan writing assistance from Buffalo State College's Small Business Development Center.

"Every entrepreneur is faced with different challenges and comes from a different background," said Anthony Armstrong, a LISC program officer.

For example, he said, the nonprofit Child and Family Services offers loans for less than $4,000. A man who wanted to make winter money with his landscaping truck didn't need a business plan. Instead he got a small, fast loan for a snowplow blade. "The ultimate goal for all of the entrepreneurs is business success," Armstrong said.

>Baker got advice

Cookie-baking entrepreneur Paula Ford agrees that getting the right business-growing advice makes all the difference. She feels lucky that her brother directed her to the right place from the start by suggesting the Buffalo State business center.

While her children were growing up, Ford worked from home to sell, bake and ice sugar cookies in fancy shapes, such as a chef holding a plate of spaghetti for Chef's restaurant.

Last year her business was growing and she knew it was time to open her own shop. "I wasn't sure how to do that," she said. "So I just decided to make an appointment and off I went."

After months of work and brainstorming with counselor Marilyn Roach, she got a bank loan and opened Delightful Cookies, a shop on Grey Street in East Aurora.

"There were just tons of questions. Every time she met me that really made me think out my business plan," she said of the market analysis and expense calculating.

Now when people come into her lime green, pink and purple shop, they admire her "icing studio" for birthday parties and the cases of fairy, birdhouse and bowling pin cookies. People have told her more than once that they can't believe she took a chance and followed her dream.

Ford says she'd seen how shops open and close and she wanted to make sure that didn't happen to her. She, like Toner, thinks her advance planning will help keep her in business. A business aid organization with a more prominent public profile that may entice more people to do the same seems like a great idea to her.

"I think that everybody who wants to start a business, no matter how much they think they know," she said, "they should get this kind of help."


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