• TABLE OF CONTENTS
HIDE
 Front Cover
 Women at work
 Women in poverty
 Self-employment and low-income...
 The beginning
 The business development progr...
 How the process works: Self-screening...
 Getting financing -- the "stepping...
 Self-employment isn't for...
 Building a broader base of support...
 The SETO program
 Accomplishments to date
 Broader impacts and future...
 Lessons
 Notes
 Appendix
 Back Cover














Group Title: Seeds pamphlet
Title: Self-employment as a means to women's economic self-sufficiency
CITATION THUMBNAILS PAGE IMAGE ZOOMABLE
Full Citation
STANDARD VIEW MARC VIEW
Permanent Link: http://ufdc.ufl.edu/UF00088784/00001
 Material Information
Title: Self-employment as a means to women's economic self-sufficiency women ventures business development program
Series Title: Seeds pamphlet
Physical Description: 20 p. : ill. ; 1993.
Language: English
Creator: McKee, Katherine
Gould, Sara K
Leonard, Ann
Publisher: Seeds
Place of Publication: New York
Publication Date: 1993
 Subjects
Subject: Women -- Employment -- United States   ( lcsh )
Businesswomen -- United States   ( lcsh )
Women -- Economic conditions -- United States   ( lcsh )
Genre: non-fiction   ( marcgt )
Spatial Coverage: United States of America
 Notes
Statement of Responsibility: story by Katherine McKee, Sara Gould and Ann Leonard.
 Record Information
Bibliographic ID: UF00088784
Volume ID: VID00001
Source Institution: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: oclc - 28598842

Table of Contents
    Front Cover
        Front Cover 1
        Front Cover 2
    Women at work
        Page 1
    Women in poverty
        Page 2
    Self-employment and low-income women
        Page 2
        Page 3
    The beginning
        Page 4
        Page 5
    The business development program
        Page 6
    How the process works: Self-screening and a step-by-step approach
        Page 6
        Page 7
        Page 8
    Getting financing -- the "stepping process," bank financing, and WomenVenture financing
        Page 9
        Page 10
    Self-employment isn't for everyone
        Page 11
    Building a broader base of support for working women
        Page 11
        Page 12
    The SETO program
        Page 12
        Page 13
    Accomplishments to date
        Page 14
    Broader impacts and future challenges
        Page 15
    Lessons
        Page 16
        Page 17
    Notes
        Page 18
    Appendix
        Page 19
        Page 20
    Back Cover
        Page 21
        Page 22
Full Text







SEEDS is a pamphlet series developed to meet requests from all over the world
for information about innovative and practical program ideas developed to address the
economic roles and needs of low income women. The pamphlets are designed as a
means to share information and spark new initiatives based on the positive experi-
ences of projects that are working to help women generate livelihoods and to improve
their economic status. The projects described in this and other issues of SEEDS have
been selected because they have served not only to strengthen women's productive
roles, but also to integrate women into various sectors of development, both social
and economic. All projects documented in the SEEDS series involve women in
decision-making, organize women locally and address broader policy issues which
affect the economic roles of women.
These reports are not meant to be prescriptive, since every development effort
will face somewhat different problems and possibilities. Rather, they have been writ-
ten to describe the history of an idea and its implementation in the hope that the
lessons learned can be useful in a variety of settings. They are also being written to
bring to the attention of those in decision-making positions the vital roles that women
play not only in the economies of their individual households but also in the economic
life of every nation.


No. 15 1993
ISSN 073-6833
Copyright 1993 SEEDS


The Population Council provides project direction and administrative
support for SEEDS. Editorial policy is set by the SEEDS Steering
Committee: Judith Bruce (Population Council), Betsy Campbell (The
Ford Foundation), Marilyn Carr (UNIFEM), Marty Chen (Harvard
Institute for International Development), Margaret Clark (The Aspen
Institute), Anne Kubisch (The Ford Foundation), Ann Leonard (The
Population Council), Cecilia Lotse (UNICEF), Katharine McKee
(Center for Community Self-Help), Anne Walker (International
Women's Tribune Center), and Mildred Warner (Cornell University).
Publication of SEEDS is made possible by support of the Ford
Foundation, the Government of the Netherlands and the Population
Council.
Statements made and views expressed in this publication are solely
the responsibility of the authors and not of any organization providing
support for SEEDS.










Self-Employment as a

Means to Women's Economic

Self-Sufficiency:

WomenVenture's Business

Development Program
Story by Katharine McKee,
Sara Gould and Ann Leonard






Introduction
While the "feminization of poverty" has been widely recognized as a global phe-
nomenon in recent years, this term originated in the United States. For even though the
U.S remains one of the worlds wealthiest nations, the number of its women and women-
headed households living in poverty is growing, mainly in the inner cities where fewer
unskilled jobs remain. In rural communities, many factories have closed, family farming is
declining and few other nonfarm options are available. Today these American women
face many of the same obstacles that limit women's economic participation in all parts of
the world.


Women at Work

The official rate of women's participation in
the U.S. labor force has risen dramatically during
this century, from 18 percent in 1900 to 57 percent
in 1988.a However, jobs in manufacturing, which
traditionally provided the best-paying employment
options for low-income, unskilled women, have
decreased dramatically as many companies
move their assembly lines to developing countries
to take advantage of lower wages and less gov-
ernment regulation. Still other industries have relo-
cated from urban settings to suburban areas
where most low-income workers cannot afford
to live.
Most of the new jobs that have opened up
for women since 1980 are in service industries,


such as retail sales and fast food vending, which
pay at or slightly above the legal minimum wage.
Therefore, it is not surprising that, despite the
increased level of female economic participation,
women in the United States still earn, on average,
only two-thirds the income of men.
In addition, by 1982, 54 percent of all work-
ing women were mothers with children under 18
years of age.b For many years the standard expla-
nation for why women were paid less than men
was that they tended to leave the labor force to
have children, thus losing seniority and experi-
ence. However, recent studies suggest that when
women find employment that offers a salary and
opportunities similar to those offered to men,
women are no more likely to quit work than their
male counterparts.






Women in Poverty
In 1987, 12 percent of all American families
were living below what the government considers
"the poverty line"'; but 34 percent of households
headed by women were poor." In fact, the aver-
age "married couple" family (most with both hus-
band and wife earning) had a median income
more than twice as high as the average female-
headed household. Of the women who headed
87 percent of all single-parent households by
1985, more than one-third of them were poor.d For
women belonging to certain minority racial
groups, the situation was worse: While 16 percent
of all women in the U.S. were poor in 1985, 13
percent of white women, 35 percent of African-
American women and 31 percent of Hispanic-
American women were living in poverty.
In addition to disparities in pay, one of the
major causes of women's poverty is their dispro-
portionate level of responsibility for children and
other dependents. In fact, statistics show that
when couples divorce, the woman's standard of
living (and that of her children) often deteriorates
drastically Even in those cases where the courts
mandate payment of monthly child support pay-
ments to the parent retaining custody of minor
children (generally the woman) from the other
wage-earning parent, as high as 40 percent of
women awarded child support never receive any
payments while an even larger number receive
only partial or sporadic payments. Still others have
no legal recourse to child support at all.
Lack of child care options is also a major
constraint faced by working mothers. (Child care
issues are discussed in length in SEEDS No. 13,
1991.) Poor quality child care facilities and the
break down of extended family networks make
this issue a constant concern. In addition,
because many poor women are single mothers or
divorced, they often face a sense of isolation; they
do not have a support network to help them deal
with the frequent crises they face or to give them a
boost in their quest to better their lives.
A number of programs, funded by federal,
state and local governments exist to assist families



'The "poverty line" is an index level, determined by the United
States Government, that reflects the consumption needs of
families depending on their size. In 1990, a family of three
living on an income of U.S. $10,419 or less was considered to
be living in poverty The poverty line is defined by a compari-
son of total annual household income, before taxes, with the
cost of basic commodities and services (e.g., food and rent).
Each year the rate is adjusted for inflation.


living in poverty These include unemployment
insurance, social security benefits for children,
food stamps, health services and monthly sti-
pends to help with rent and other expenses.
These public transfers of income and services are
often referred to as "welfare" or "public assis-
tance." For many poor women, these economic
transfers fill the gaps between unstable employ-
ment and often serve as the major source of sup-
port for their family Yet, in recent years, the actual
value of these economic transfers has been stead-
ily decreasing due to inflation and cuts in govern-
ment programs, while the costs of housing and
health care continue to spiral upward. In addition,
programs such as unemployment insurance and
social security tend to favor men since these pro-
grams are based on the amount of wages earned
and men not only earn higher salaries but also
tend to be employed for longer consecutive peri-
ods of time.
So while welfare programs may prevent star-
vation, they do not necessarily alleviate hunger as
money often runs out well before the arrival of next
month's welfare check. And programs such as Aid
to Families with Dependent Children (AFDC), the
largest source of public assistance in the U.S.,
themselves present obstacles that prevent women
from bettering their lives. Regulations governing
eligibility-to receive not only income but also
access to health care and other services-
severely limit the assets a family can possess with-
out losing all welfare benefits. The assumption is
that people will leave welfare for full-time wage
employment and will not need further assistance.
There is no provision in the system for a gradual or
partial transition off of public assistance through
part-time or self-employment. These regulations,
therefore, drastically reduce the ability of poor
women to make the difficult climb out of poverty to
self-sufficiency And while for most families reli-
ance on welfare is a temporary measure, for a
small segment of America's poor, the current wel-
fare regulations have contributed to a growing
cycle of poverty in which second and even third
generations of women are raising families on pub-
lic assistance.


Self-Employment and
Low-Income Women
In the early 1980s, it became evident that
new solutions were required to meet the needs of
the increasing number of people, particularly
women and children, living in poverty in the






Women in Poverty
In 1987, 12 percent of all American families
were living below what the government considers
"the poverty line"'; but 34 percent of households
headed by women were poor." In fact, the aver-
age "married couple" family (most with both hus-
band and wife earning) had a median income
more than twice as high as the average female-
headed household. Of the women who headed
87 percent of all single-parent households by
1985, more than one-third of them were poor.d For
women belonging to certain minority racial
groups, the situation was worse: While 16 percent
of all women in the U.S. were poor in 1985, 13
percent of white women, 35 percent of African-
American women and 31 percent of Hispanic-
American women were living in poverty.
In addition to disparities in pay, one of the
major causes of women's poverty is their dispro-
portionate level of responsibility for children and
other dependents. In fact, statistics show that
when couples divorce, the woman's standard of
living (and that of her children) often deteriorates
drastically Even in those cases where the courts
mandate payment of monthly child support pay-
ments to the parent retaining custody of minor
children (generally the woman) from the other
wage-earning parent, as high as 40 percent of
women awarded child support never receive any
payments while an even larger number receive
only partial or sporadic payments. Still others have
no legal recourse to child support at all.
Lack of child care options is also a major
constraint faced by working mothers. (Child care
issues are discussed in length in SEEDS No. 13,
1991.) Poor quality child care facilities and the
break down of extended family networks make
this issue a constant concern. In addition,
because many poor women are single mothers or
divorced, they often face a sense of isolation; they
do not have a support network to help them deal
with the frequent crises they face or to give them a
boost in their quest to better their lives.
A number of programs, funded by federal,
state and local governments exist to assist families



'The "poverty line" is an index level, determined by the United
States Government, that reflects the consumption needs of
families depending on their size. In 1990, a family of three
living on an income of U.S. $10,419 or less was considered to
be living in poverty The poverty line is defined by a compari-
son of total annual household income, before taxes, with the
cost of basic commodities and services (e.g., food and rent).
Each year the rate is adjusted for inflation.


living in poverty These include unemployment
insurance, social security benefits for children,
food stamps, health services and monthly sti-
pends to help with rent and other expenses.
These public transfers of income and services are
often referred to as "welfare" or "public assis-
tance." For many poor women, these economic
transfers fill the gaps between unstable employ-
ment and often serve as the major source of sup-
port for their family Yet, in recent years, the actual
value of these economic transfers has been stead-
ily decreasing due to inflation and cuts in govern-
ment programs, while the costs of housing and
health care continue to spiral upward. In addition,
programs such as unemployment insurance and
social security tend to favor men since these pro-
grams are based on the amount of wages earned
and men not only earn higher salaries but also
tend to be employed for longer consecutive peri-
ods of time.
So while welfare programs may prevent star-
vation, they do not necessarily alleviate hunger as
money often runs out well before the arrival of next
month's welfare check. And programs such as Aid
to Families with Dependent Children (AFDC), the
largest source of public assistance in the U.S.,
themselves present obstacles that prevent women
from bettering their lives. Regulations governing
eligibility-to receive not only income but also
access to health care and other services-
severely limit the assets a family can possess with-
out losing all welfare benefits. The assumption is
that people will leave welfare for full-time wage
employment and will not need further assistance.
There is no provision in the system for a gradual or
partial transition off of public assistance through
part-time or self-employment. These regulations,
therefore, drastically reduce the ability of poor
women to make the difficult climb out of poverty to
self-sufficiency And while for most families reli-
ance on welfare is a temporary measure, for a
small segment of America's poor, the current wel-
fare regulations have contributed to a growing
cycle of poverty in which second and even third
generations of women are raising families on pub-
lic assistance.


Self-Employment and
Low-Income Women
In the early 1980s, it became evident that
new solutions were required to meet the needs of
the increasing number of people, particularly
women and children, living in poverty in the






United States. One option that generated a lot of
interest was self-employment, particularly
microenterprise development. Small businesses
have always been an important source of employ-
ment. Between 1980 and 1986 (a period of eco-
nomic recession), the number of women-owned
small sole proprietorships in the U.S. skyrocketed,
increasing by 62.5 percent to a total of 4.1 million
businesses.'
Experience over the last decade has shown
that for some poor women, self-employment can
offer the means to become self-supporting and to
gain increased self-esteem, provided they are
offered assistance that includes development of
business skills, access to credit and other support
services. However, it is important to keep in mind
that small business development remains largely a
high risk, labor intensive activity that often, at least
initially, must be combined with a low-wage job in
order for a family to make ends meet. It should,
therefore, be viewed as an option suitable for
some people, but not as a substitute for the devel-
opment of wage employment for the majority of
low-income people.
In the United States today there are a grow-
ing number of programs that have been devel-


oped to assist low-income women become
self-employed. One of the pioneering efforts that
has served as a model for many other programs
throughout the United States and beyond, was the
Women's Economic Development Corporation
(WEDCO) in St. Paul, Minnesota, the first microen-
terprise development program to provide services
directly to low-income women. Over the years, as
it sought to respond to the broader employment
needs of women, WEDCO expanded it services.
In 1989, WEDCO merged with an employment
counseling program and subsequently the orga-
nization changed its name to WomenVenture to
reflect its expanded range of services. Today, the
"WEDCO" component of WomenVenture is re-
ferred to as its "business development program."
This issue of SEEDS focuses on the evolu-
tion of WomenVenture's business development
program (the name WEDCO is sometimes used in
the text where historically appropriate). This
model, which has provided a way of helping
women start businesses and become self-suffic-
ient without incurring overwhelming risks, con-
tinues to be an example of interest to other
organizations seeking to help women become
self-employed.






Wanda is a single parent with a three-year old
child. She was referred to WEDCO/WV by a local
bank after she had accused the bank of sex dis-
crimination when they denied her request for a
loan to buy a truck. Wanda wanted to start a
business to haul trash and rubbish from construc-
tion sites. She had walked into the business loan
department of the bank with a toddler and no
business plan. When Wanda came to WEDCO/
WV, she was given assistance in developing a
business plan and cash flow projections. Armed
with these documents and new knowledge,
Wanda was able to lease two trucks and establish
herself as a minority contractor2 for the city In
addition, she has started a small tool rental busi-
ness out of her house.

WomenVenture's business development pro-
gram (formerly known as WEDCO) was created to
help women like Wanda. Since 1984, more than
1,000 have been helped to start their own busi-
nesses, receiving loans in support of these
microenterprises amounting to over three-quarters
of a million dollars. An even greater number of
women have been assisted in deciding NOT to go
into business for themselves, but rather to gain
needed education, skills and paid employment.
WomenVenture (WV) is well aware that starting a
very small business that can generate enough
income to support a woman and her household is
not easy for anyone. For women who are poor, the
barriers are even greater. From the very begin-
ning, it was recognized that if the WEDCO pro-
gram was to reach and serve women like
Wanda, it would have to be very different from
traditional small business assistance programs in
the United States.
The Beginning
In 1982, the United States was in the midst
of a recession and the effects were beginning to
be felt in the state of Minnesota.3 Jobs were
becoming scarce, particularly in the industrial
sector. In addition, for many women, available


21n the U.S., federal, and some state and local governments,
support development of minority-owned businesses (e.g.,
African-American, Hispanic-American, Native American) by
giving them preference when bidding on various government
contracts and services.

3Minnesota is a large state located in the north central portion
of the United States. The state capital, Minneapolis, is located
directly across the river from its "twin" city, St. Paul. The urban
population of the Twin Cities combined is approximately
2.5 million people.


employment options did not meet their needs not
only for income, but for the flexibility needed to
meet family care responsibilities or the sense of
having some control over their lives.
So, in the fall of that year, two women con-
cerned about the growing feminization of poverty
in their home state decided to take a fresh look at
ways to promote economic self-sufficiency for
women. Working together, Kathryn S. Keeley, then
Executive Director of Chrysalis, a women's coun-
seling center in Minneapolis, and her colleague
Arvonne Fraser of the Hubert Humphrey Institute
at the University of Minnesota, were able to raise
sufficient funds from local foundations to support
a planning process to examine the causes of
women's poverty and suggest program and pol-
icy initiatives to increase women's incomes and
improve the quality of their lives.
The planning began late in the fall of 1982;
by March 1983, a new area of economic opportu-
nity for women had been identified: self-employ-
ment and small business development. To
develop a program to help women take advan-
tage of these new opportunities, an advisory
group was formed made up of at least 60 women
and men in the Minneapolis-St. Paul area. They
participated in several task forces that looked at:
the language of economic development and
entrepreneurship and ways to make it less intimi-
dating to women, particularly low-income women;
the kinds of day care, housing, income mainte-
nance and other services women would need to
make the transition to self-employment; and the
types of training and financial assistance required
to meet the needs of low-income women. In addi-
tion, Chrysalis carried out a survey of 300 pre-
dominantly low-income women interested in
microenterprise development. They identified lack
of financing-particularly small loans (amounts
from $500-$10,000)-as a primary need.
It was at about this time that Barbara Allivato,
then Vice President for Urban Development at the
Minneapolis-based First Bank System, happened
to see Kathy Keeley on television describing the
preliminary findings of the planning process.
Keeley's enthusiasm and credibility sparked Alliva-
to's imagination. She recognized that women busi-
ness owners represented a unique opportunity for
her bank.
At this point, events began to move quickly
In September 1983, the advisory group in the Twin
Cities recommended the formation of a new orga-
nization, the Women's Economic Developmeht
Corporation (WEDCO). Kathy Keeley was named

































Executive Director. WEDCO opened its doors to
clients in January 1984 Initial financial support
came from three private foundations, but soon
expanded to include corporate support and even-
tually funding from the State of Minnesota.
With the resource base taking shape, Kathy
Keeley began to build a staff. In addition to Keeley,
initial staff included an administrative assistant and
a second professional person who began the
intake and assessment work with WEDCO's first
clients. Within three months, the need for addi-
tional expertise in both marketing and finance
was clear but resources could fund only one posi-
tion. Keeley devised a creative solution; she cre-
ated two part-time jobs and filled the positions
with women who were business owners them-
selves and wanted to remain engaged in their
own enterprises.
The new organization set out to achieve
three main goals:
To increase the economic self-sufficiency of
women through self-employment
To improve women's access to financial
resources
To act as a catalyst in linking women with
emerging business opportunities
As the staff began working with clients,
these goals took shape and gained greater clarity.
Because the term "economic self-sufficiency" is a


vague one, staff engaged in discussions about
what they meant when they used it. They reached
general agreement that economic self-sufficiency
for a woman meant that she was able to earn
enough income to support herself and her family
In fact WomenVenture chooses to emphasize the
word "self-employment" rather than "business" in
their initial discussions with clients because they
have found that while most potential women
entrepreneurs can see themselves as becoming
"self-employed," initially they cannot visualize
themselves as owning and operating a business
-the concept implies something too big
From the onset, it was realized that one of
the most important services they could provide
was to help women gain access to financial
resources. This meant opening two different
doors: 1) pursuing creative partnerships with con-
ventional lenders who could assist some women,
and 2) establishing an in-house loan fund to pro-
vide first-time credit for women considered "bad
risks" by banks.
Finally, staff decided that the most effective
way to link women with emerging business oppor-
tunities was to make those opportunities visible.
This involved highlighting recent advances made
by women and bringing them to life by featuring
the experiences of real women as role models as
well as bringing greater visibility to women operat-
ing nontraditional businesses.






The Business Development
Program
Beverly is a Native American' woman about
50 years old. She came to WEDCO/WV after a
bank in St. Paul turned down her request for a
loan to start her own pest control business to sup-
port herself her husband and two children.
Beverly needed to borrow $3,500 to buy equip-
ment and to obtain the necessary insurance and
licenses. The bank denied her request due to a
lack of collateral: she owns no property because
lands belonging to Native Americans are commu-
nal and are held in trust by the U.S. Bureau of
Indian Affairs. With help from WEDCO/WV Beverly
completed a two-page business plan and set out
to visit Native American reservations in Minnesota,
North Dakota, South Dakota and Nebraska to bid
on pest control accounts for tribal buildings,
schools and Native American health service
offices. When she returned, she had $22,000 in
signed contracts-more than enough collateral to
secure a WEDCO/WV loan. In addition, she was
able to register as a minority contractor to get
work with public housing projects and other pub-
lic sector businesses. The business is now pro-
viding Beverly and her family with steady employ-
ment and a good income.

WomenVenture's clients face all the prob-
lems typical of most start-up enterprises-limited
business and management experience, lack of
adequate financing, need to build a customer
base from scratch. However, as women they con-
front other obstacles: barriers of isolation, lack of
self-confidence, heavy family responsibilities, lack
of formal business training, very limited money of
their own to invest in their enterprise and, all too
often, sex discrimination by bankers, customers
and suppliers. Furthermore, many women do not
get much encouragement from their family, hus-
bands or partners in trying to achieve self-suffi-
ciency through creating their own businesses.
To tackle all these barriers to self-employ-
ment, a very comprehensive assistance program
was designed. The components include:
Training in business planning and manage-
ment
One-on-one consulting tailored to each client
and her business idea



4"Native American" refers to the descendants of the native
people populating North America before the arrival of Euro-
pean settlers. Many Native Americans live on tribal lands,
called reservations, held in trust by the U.S. Bureau of Indian
Affairs.


Exercises to build self-esteem and personal
effectiveness
Financial packaging and loans
Thus, WomenVenture provides encourage-
ment and social support for clients' income-earn-
ing efforts as well as business skills and services.
The program also offers follow-up assis-
tance to help clients with the production, market-
ing, cash flow and personal problems that arise
once they have launched their self-employment
enterprises. Another important role that Women-
Venture plays is to provide a place where clients
can come to discuss the challenges they face with
business professionals and other clients.

How the Process Works:
Self-Screening and a
Step-by-Step Approach
To better understand the business develop-
ment process, we will follow a typical client
through the initial phases of the program. Erica is
a single parent with two children. Before coming
to WomenVenture, she had worked at a variety of
low-paying jobs (factory assembly line, hospital
aide, clerical work). For several years she had
been making jewelry at home for her family and
friends; people frequently suggested that she
ought to go into business. So, when Erica came to






The Business Development
Program
Beverly is a Native American' woman about
50 years old. She came to WEDCO/WV after a
bank in St. Paul turned down her request for a
loan to start her own pest control business to sup-
port herself her husband and two children.
Beverly needed to borrow $3,500 to buy equip-
ment and to obtain the necessary insurance and
licenses. The bank denied her request due to a
lack of collateral: she owns no property because
lands belonging to Native Americans are commu-
nal and are held in trust by the U.S. Bureau of
Indian Affairs. With help from WEDCO/WV Beverly
completed a two-page business plan and set out
to visit Native American reservations in Minnesota,
North Dakota, South Dakota and Nebraska to bid
on pest control accounts for tribal buildings,
schools and Native American health service
offices. When she returned, she had $22,000 in
signed contracts-more than enough collateral to
secure a WEDCO/WV loan. In addition, she was
able to register as a minority contractor to get
work with public housing projects and other pub-
lic sector businesses. The business is now pro-
viding Beverly and her family with steady employ-
ment and a good income.

WomenVenture's clients face all the prob-
lems typical of most start-up enterprises-limited
business and management experience, lack of
adequate financing, need to build a customer
base from scratch. However, as women they con-
front other obstacles: barriers of isolation, lack of
self-confidence, heavy family responsibilities, lack
of formal business training, very limited money of
their own to invest in their enterprise and, all too
often, sex discrimination by bankers, customers
and suppliers. Furthermore, many women do not
get much encouragement from their family, hus-
bands or partners in trying to achieve self-suffi-
ciency through creating their own businesses.
To tackle all these barriers to self-employ-
ment, a very comprehensive assistance program
was designed. The components include:
Training in business planning and manage-
ment
One-on-one consulting tailored to each client
and her business idea



4"Native American" refers to the descendants of the native
people populating North America before the arrival of Euro-
pean settlers. Many Native Americans live on tribal lands,
called reservations, held in trust by the U.S. Bureau of Indian
Affairs.


Exercises to build self-esteem and personal
effectiveness
Financial packaging and loans
Thus, WomenVenture provides encourage-
ment and social support for clients' income-earn-
ing efforts as well as business skills and services.
The program also offers follow-up assis-
tance to help clients with the production, market-
ing, cash flow and personal problems that arise
once they have launched their self-employment
enterprises. Another important role that Women-
Venture plays is to provide a place where clients
can come to discuss the challenges they face with
business professionals and other clients.

How the Process Works:
Self-Screening and a
Step-by-Step Approach
To better understand the business develop-
ment process, we will follow a typical client
through the initial phases of the program. Erica is
a single parent with two children. Before coming
to WomenVenture, she had worked at a variety of
low-paying jobs (factory assembly line, hospital
aide, clerical work). For several years she had
been making jewelry at home for her family and
friends; people frequently suggested that she
ought to go into business. So, when Erica came to






WomenVenture, she already had an idea of what
she wanted to do.
Erica heard about WomenVenture through
friends and went to one of their regular orientation
sessions ("Considering a Business"), to learn more
about the rigors of starting a business. About 12
women were there (approximately 500 attend
these sessions each year). Some already had
small businesses or part-time, home-based self-
employment activities. Many, like Erica, had a spe-
cific business idea and had come to see whether
WomenVenture could help them turn their dream
into reality.
At the orientation sessions, staff give poten-
tial clients an overview of the risks and opportu-
nities, successes and failures, frustrations and
rewards of self-employment. Again and again they
emphasize that owning and operating a business
is not for everyone and requires many skills as well
as long hours of planning and hard work. On
average, less than half of the women who attend
an orientation session continue in the program.
But Erica was determined. She signed up for the
next step in the process, an individual interview
with a staff person, referred to as a "business con-
sultant." Typically WomenVenture consultants have
themselves started and run at least one small busi-
ness or self-employment venture. Many continue
to do so while serving on the staff.


At a potential client's first interview, she
presents her business idea, plan or problem to a
WomenVenture consultant. As she describes her
plans, the consultant takes notes and asks many
questions. She then goes over a detailed outline
describing the different services and assistance
that WomenVenture can provide if the applicant
chooses to become a client. The consultant
explains that in addition to providing training, tech-
nical assistance and advice to her as she pre-
pares her business plan, WomenVenture can also
help her obtain the financing needed to start up
her venture, either from a bank or from its own
loan fund.
The consultant also explains that as a client
she will need to agree to carry out a series of
specific tasks-referred to as "homework"-that
make up the business planning process, if she
wants to move on to the next stage and continue
receiving advice and services. If she agrees, she
and the consultant will decide how much she will
have to pay for each service. WomenVenture
offers its services on a sliding fee basis, depend-
ing on the woman's income; fees range from as
low as $20 up to $60 per consultation.
WomenVenture's leadership believes that
they must be "businesslike" with their clients, just
as their program trains clients to be businesslike
with customers and suppliers. Paying a fee for
































classes and consultations will encourage women
like Erica to think hard about whether the services
are valuable and whether they are prepared to
move on to the next stage.
At this point, many clients are uncertain
whether they want to proceed and about one-half
drop out, but Erica is ready to begin. She signs
an agreement setting out the roles and respon-
sibilities that she and WomenVenture will each
assume. The next step for her is to attend a train-
ing session or workshop that will get her started
on the step-by-step business planning process.
After that, she will meet with her consultant as she
completes each section of "homework."
This illustrates another basic principle of the
WomenVenture business development model-
the business planning process is broken down
into many different steps so that clients will not feel
overwhelmed and will be able to acquire skills and
knowledge at their own pace. The building blocks
of the training and assistance program are a
series of worksheets covering the different com-
ponents of starting a business: deciding which
product to make or service to provide, determin-
ing who will buy from you and how much they will
be willing to pay, analyzing your competitors, figur-
ing out what equipment and supplies you will
need to purchase or lease and where to get them
on the most favorable terms, preparing your home
for the business or identifying a suitable location,
and so on.


Each client must complete one worksheet
before moving on to the next. She may decide not
to continue at any point. WomenVenture believes
that the business development process should be
self-paced, with the client deciding how quickly to
plan, start up and expand her business.
Classroom training and individual meetings
with consultants help clients complete each step.
Typically a client will attend six to ten consultations
or classes over a two to eight-month period to
complete her business plan. At times Women-
Venture has also developed work groups to give
clients a chance to work closely with other women
on learning specific skills and solving problems.
Work groups in marketing, selling, record keep-
ing, pricing, dealing with personal problems, or
financing, for example, provide clients with in-
depth training and opportunities to fine-tune their
business ideas while getting feedback and sup-
port from other women.
A very important component of the Women-
Venture planning process is identifying the client's
income needs and the business's financing
needs. Consultants help each client figure out a
two-year budget that covers her basic needs and
those of her family, including expenses such as
child care that are often overlooked by traditional
business planners. With staff help, each client also
estimates the expenses, revenues and net profits
that her venture can expect to accrue during its
first two years of operation. Then comes the







moment of truth-will the business or self-employ-
ment activity produce enough money for the client
to be able to support herself and her family? If not,
it is back to the drawing board. Approximately
one-half of clients have to restructure their plans at
this point. The consultants try to help them figure
out how to reduce expenses and increase reve-
nues so that their business idea can be viable.

Joanne wanted to start a seamstress business
that would be located in a fabric store chain.
WEDCO/WV assisted her to develop a business
plan and identify her market. She then requested
a very large loan from WEDCO/WV, which was
denied because the debt service required would
overextend the business. It was suggested that
she rethink her plan-starting somewhat smaller
and planning to grow more slowly without assum-
ing a large debt. In the end, Joanne was able to
start her business with $4,000 in capital, and now
feels that this was the most helpful turndown she
ever received from a funding source.

Sometimes at this point, despite all the work
put in to her self-employment plan, a client is
forced to conclude that her business idea will not
work. WomenVenture staff feel strongly that one of
their most important roles is to help women
decide not to become self-employed, if this would
worsen their economic and/or personal situation.
In fact, WEDCO founder Kathy Keeley strongly
emphasizes that self-employment is not for every-
one. "Self-employment is," she stresses, "only one
means to women's self-sufficiency."

Getting Financing -The "Stepping
Process"
If the client's plan appears viable, the step-
by-step planning process helps her to assemble
the information she needs to apply for a loan from
a bank or from WomenVenture. Not all clients
need to borrow money to start or expand their
businesses. Some are able to pull together money
from savings or from family and friends, but since
many participants are low-income and have little
savings, financial packaging is an essential part
of the WomenVenture model. After Erica com-
pleted all the sections of her business plan, the
consultant helped her to prepare a written loan
application.


Bank Financing
Whenever possible, WomenVenture encour-
ages clients to apply for a bank loan, since a long-


term goal is to make traditional financial institutions
more responsive to the credit needs of women's
businesses. After Barbara Allivato learned about
the program and got involved, WEDCO devel-
oped a particularly close working relationship with
First Bank. In the program's first four years, with
funds provided by First Bank and others, 120
loans and guarantees were made to WEDCO cli-
ents, ranging from $50 to $125,000, for business
start-ups and expansions.
Yet building partnerships with banks has not
been easy Most bankers continue to view
WomenVenture's clients as high-risk borrowers
because most have no previous business experi-
ence and few personal or business assets. In
addition, bankers usually are not familiar with the
types of self-employment activities the women
want to carry out. With each new loan officer,
another education process is required to explain
the program's goals and methods and present its
strong track record.
Perhaps the most important constraint is
that it is not profitable for a bank to make such
small loans because the transaction costs are
almost the same as they are for large loans and,
because more individual borrowers are involved,
small loans are more expensive to administer. Very
few commercial banks will even consider making
a business loan under $10,000; some will not
accept applications under $50,000. At First Bank,
the WomenVenture-referred loans were all granted
from the bank's personal loan division rather than
its business loan division. While this permitted the
bank to make smaller and more flexible loans, it
also made it more difficult for clients to benefit from
an experienced business lender's advice and to
build up a track record as a business borrower.

WomenVenture Financing
Because most of its clients' needs cannot be
met through partnerships with banks, it was rec-
ognized from the outset that it would be neces-
sary for WomenVenture to capitalize its own loan
fund by raising money from foundations and cor-
porations. Several different approaches to lending
have been tried to date. Originally, two funds were
created; one to guarantee bank loans and another
to make direct loans and investments. This divi-
sion, however, did not prove workable so the
money was combined into one fund. As of the end
of 1991, The Seed Capital Fund had $307,000 in
assets and made loans ranging from $30 to
$28,000. WomenVenture is currently initiating a
new lending program with funding provided by
9






the U.S. Small Business Administration (SBA).
These SBA funds will be used to finance nontradi-
tional enterprises of low-income women, and men,
up to a maximum of $25,000. Clients make appli-
cations to the loan funds the same way they apply
to a bank.
The lending program embodies several
WomenVenture principles. First, it is designed to
be a "stepping process" for clients. Stepping loans
start out small-just enough to allow the entrepre-
neur to test her business idea, make repayment
and build up her business without incurring
unreasonable debt. For example, a client is often
given a very small loan that is just enough to allow
her to purchase some inventory, print some bro-
chures or business cards, etc. WomenVenture
then asks the woman to go out and try to sell her
service or product, committing to finance 50 per-
cent of any sales or services she generates, thus
insuring that she can deliver her orders.
This process provides the woman with an
incentive to try her business idea while at the
same time minimizing risk to the loan fund, as
repayment is tied directly to sales. Once the
woman demonstrates that she can get clients and
deliver her orders, she becomes eligible for pro-
gressively larger loans. In this way her business
can grow gradually as she is learning and practic-
ing new management and marketing skills. At the
same time, she is building a track record as a
borrower. As soon as possible, she is encouraged
to "graduate" to a bank loan, so that Women-
Venture's limited loan funds can be made available
to other clients.
A second guiding principle is that financing
should be flexible, tailored to the specific financing
needs of the client's particular business or self-
employment activity. Each client is responsible for
negotiating the duration, interest rate, pace of
repayment (tailored to her business' cash flow)
and other terms of her loan with the loan commit-
tee. Interest rates are at or near market rates as
WomenVenture does not believe in subsidizing
women's businesses. They treat their borrowers as
business owners, just as a bank would, so that the
women understand that this is not a giveaway pro-
gram but serious business in a real world context.
Third, every client must pledge some type of
collateral for her loan, even if it consists of property
a bank would not typically accept as security:
flowers, plastic, cleaning supplies, pianos-even
very old cars. Also accepted are signed sales
contracts to deliver goods or services to cus-
tomers or other "intangibles." WomenVenture then


files liens (charges upon real or personal property
for the satisfaction of a debt) with the State of
Minnesota on this collateral so that their clients see
that this is legally a business loan. This is a very
important step in the process not only because
insistence on collateral helps to ensure that the
clients feel a strong commitment to repay and that
they understand the risks involved in self-employ-
ment, but because it helps clients build credit his-
tories that they can later present to banks.
Leslie had experience working as a florist but
had failed at starting her own floral business.
Upon analysis of her situation, WEDCO/WV
agreed to provide her with a $500 loan to buy
roses to sell for Valentines Day (a U.S. holiday
when flowers and candy are frequently given as
gifts). She rented a store front for $200 for one
month and bartered with the local newspaper for
an ad in exchange for roses for the office. She
bought ladders and buckets to put the flowers in
and hand painted a sign that offered a "love
bunch" for $8.99. Within five days, she was able to
earn $3,000 from the sale of the roses. She then
repaid her loan and used the remaining funds
to provide the capital she needed to start her
business.
Three years later WEDCO/WV made Leslie a
second loan of $500 for Mothers Day and again
set a five-day term of repayment. She was able to
generate enough cash to pay that loan in time
and to buy her first cooler to keep her flowers.
Leslie went on to borrow $70,000 through a city
program to purchase her own building and now
operates from two locations. Today Leslie's busi-
ness has sales of over $500,000 annually She
owns three stores and two buildings and currently
employs 15 other people. Not only is she support-
ing herself and her own family but she is helping
other women to do the same. She also served for
a time as the president of the local merchants'
association.
Of course not all of WomenVenture's loans
are so successful. During the first four years of the
WEDCO program, when the loan fund was most
active, the default rate ran at less than 20 percent.
Clients whose loans appear to be "in trouble" are
given special assistance in order to help stabilize
their businesses, solve problems and pay off their
loans.
But overall, WomenVenture's loan record
looks good. Over the years, with about $900,000
in loans to clients, their loss rate has averaged
approximately four percent of outstanding princi-
pal in any given year. This compares favorably
with other community development loan funds in
the U.S.





































Self-Employment Isn't for Everyone
WomenVenture works on the principle of
self-screening. Its staff do not believe that they can
determine which business ideas will succeed and
fail; rather, they help each individual client judge
her venture's feasibility for herself and then decide
whether she has the skills, abilities and determina-
tion to develop, market and finance a business.
Women are allowed to "self-select"-to identify
which business idea is right for them and to con-
tinually test their own readiness to operate a
microenterprise successfully By the end of this
self-selection process, clients will have demon-
strated to themselves, their families and Women-
Venture that their proposed business is viable and
that they are committed to carrying it out.
Many women screen themselves out after
completing just part of the process. Upon further
examination, a client may decide that her pro-
posed business does not suit her needs after all,
either because it cannot generate enough earn-
ings or because it does not fit her current personal
goals and circumstances, or because she cannot
commit enough time and energy to make it work
at this point in her life. She may decide to put off


self-employment until family and day care respon-
sibilities change. A number of women return to
WomenVenture at a later date when they feel more
secure about making a commitment.

Building a Broader Base of Support
for Working Women
In the early WEDCO years, about five
women per day would inquire about the business
development program. Out of any five, approxi-
mately two would actually try to start their own
businesses. The other three usually needed
assistance in securing employment and skills
training, education and support services to meet
their economic needs.
To better assist these women, in 1989
WEDCO merged with CHART, a career and
employment counseling program to create
WomenVenture, an organization offering more
comprehensive self-sufficiency services beyond
business development. WomenVenture (WV)
seeks to secure a stronger economic future for
women through a focus on three areas: employ-
ment and career development, business develop-
ment and financial responsibility





































Self-Employment Isn't for Everyone
WomenVenture works on the principle of
self-screening. Its staff do not believe that they can
determine which business ideas will succeed and
fail; rather, they help each individual client judge
her venture's feasibility for herself and then decide
whether she has the skills, abilities and determina-
tion to develop, market and finance a business.
Women are allowed to "self-select"-to identify
which business idea is right for them and to con-
tinually test their own readiness to operate a
microenterprise successfully By the end of this
self-selection process, clients will have demon-
strated to themselves, their families and Women-
Venture that their proposed business is viable and
that they are committed to carrying it out.
Many women screen themselves out after
completing just part of the process. Upon further
examination, a client may decide that her pro-
posed business does not suit her needs after all,
either because it cannot generate enough earn-
ings or because it does not fit her current personal
goals and circumstances, or because she cannot
commit enough time and energy to make it work
at this point in her life. She may decide to put off


self-employment until family and day care respon-
sibilities change. A number of women return to
WomenVenture at a later date when they feel more
secure about making a commitment.

Building a Broader Base of Support
for Working Women
In the early WEDCO years, about five
women per day would inquire about the business
development program. Out of any five, approxi-
mately two would actually try to start their own
businesses. The other three usually needed
assistance in securing employment and skills
training, education and support services to meet
their economic needs.
To better assist these women, in 1989
WEDCO merged with CHART, a career and
employment counseling program to create
WomenVenture, an organization offering more
comprehensive self-sufficiency services beyond
business development. WomenVenture (WV)
seeks to secure a stronger economic future for
women through a focus on three areas: employ-
ment and career development, business develop-
ment and financial responsibility






In addition to the business development
program, WomenVenture has developed a Career
Resource Center to meet the needs of the large
number of women for whom self-employment is
not the best option. To keep costs in line, this
service recently was restructured as a self-help,
self-paced program designed to give women
access to a "tool box" of information and support
systems as they make the transition to better jobs
or new careers. A major component is The
Exchange, a program that capitalizes on WV's
extensive network of business professionals who
consult with clients on a volunteer basis. Also
included in the program is a job listing book, job
search workshops, reference library and support
group activities. The idea is to provide clients with
an accessible, affordable and responsive mecha-
nism to meet their particular needs.
WomenVenture's services are available to
any woman, regardless of income. (Men some-
times inquire about WV programs, but only a few
actually become clients.) Most WomenVenture cli-
ents are low- to middle-income women and a sig-
nificant proportion are single mothers; many
clients are women who, following a divorce, sud-
denly found their standard of living had plum-


meted and were faced with being the primary or
sole support of their family
For most clients, the regular WomenVenture
programs can meet their business and employ-
ment needs. But many women living below the
poverty line face additional obstacles, especially
women who are recipients of AFDC (Aid to Fami-
lies with Dependent Children). To help these
women on the road to self-sufficiency special pro-
grams are necessary.


The SETO Program
In 1986, efforts began to design a program
to provide business development services to
women receiving public assistance. The Self-
Employment Training Opportunities (SETO) pro-
gram is modeled on WomenVenture's regular
business development program, but places
greater emphasis on building women's self-confi-
dence and teaching problem-solving and busi-
ness-related skills. The training period for SETO
clients is also longer, since most participants have
little or no previous business experience and often
limited formal education.
In addition to lacking money, education,
experience and self-esteem, SETO clients face
another major obstacle: they are receiving public
assistance. AFDC not only provides poor families
with cash income but also other benefits such as
food stamps and access to health care. However,
the eligibility requirements for recipients of AFDC
severely restrict the amount of income or assets a
family can accumulate and still receive benefits,
thus actually discouraging people from trying to
become self-sufficient.
Families on AFDC as a unit are not allowed
to accrue more than $1,200 in personal belong-
ings, income, savings or assets (this does not,
however, include the value of an automobile); nor
are they allowed to separate business assets and
income from their personal finances. At first
WomenVenture tried to work around these restric-
tions by various means such as leasing equip-
ment to clients and by paying vendors directly on
behalf of SETO clients, but none of these were
satisfactory They therefore sought changes in
these restrictive government regulations.
In 1988, WomenVenture became part of a
national demonstration program initiated by the
Corporation for Enterprise Development, a non-
profit advocacy organization with headquarters in
Washington, DC. This demonstration program,
operated on a trial basis in five U.S. states, allowed






In addition to the business development
program, WomenVenture has developed a Career
Resource Center to meet the needs of the large
number of women for whom self-employment is
not the best option. To keep costs in line, this
service recently was restructured as a self-help,
self-paced program designed to give women
access to a "tool box" of information and support
systems as they make the transition to better jobs
or new careers. A major component is The
Exchange, a program that capitalizes on WV's
extensive network of business professionals who
consult with clients on a volunteer basis. Also
included in the program is a job listing book, job
search workshops, reference library and support
group activities. The idea is to provide clients with
an accessible, affordable and responsive mecha-
nism to meet their particular needs.
WomenVenture's services are available to
any woman, regardless of income. (Men some-
times inquire about WV programs, but only a few
actually become clients.) Most WomenVenture cli-
ents are low- to middle-income women and a sig-
nificant proportion are single mothers; many
clients are women who, following a divorce, sud-
denly found their standard of living had plum-


meted and were faced with being the primary or
sole support of their family
For most clients, the regular WomenVenture
programs can meet their business and employ-
ment needs. But many women living below the
poverty line face additional obstacles, especially
women who are recipients of AFDC (Aid to Fami-
lies with Dependent Children). To help these
women on the road to self-sufficiency special pro-
grams are necessary.


The SETO Program
In 1986, efforts began to design a program
to provide business development services to
women receiving public assistance. The Self-
Employment Training Opportunities (SETO) pro-
gram is modeled on WomenVenture's regular
business development program, but places
greater emphasis on building women's self-confi-
dence and teaching problem-solving and busi-
ness-related skills. The training period for SETO
clients is also longer, since most participants have
little or no previous business experience and often
limited formal education.
In addition to lacking money, education,
experience and self-esteem, SETO clients face
another major obstacle: they are receiving public
assistance. AFDC not only provides poor families
with cash income but also other benefits such as
food stamps and access to health care. However,
the eligibility requirements for recipients of AFDC
severely restrict the amount of income or assets a
family can accumulate and still receive benefits,
thus actually discouraging people from trying to
become self-sufficient.
Families on AFDC as a unit are not allowed
to accrue more than $1,200 in personal belong-
ings, income, savings or assets (this does not,
however, include the value of an automobile); nor
are they allowed to separate business assets and
income from their personal finances. At first
WomenVenture tried to work around these restric-
tions by various means such as leasing equip-
ment to clients and by paying vendors directly on
behalf of SETO clients, but none of these were
satisfactory They therefore sought changes in
these restrictive government regulations.
In 1988, WomenVenture became part of a
national demonstration program initiated by the
Corporation for Enterprise Development, a non-
profit advocacy organization with headquarters in
Washington, DC. This demonstration program,
operated on a trial basis in five U.S. states, allowed






AFDC recipients 12-month waivers from AFDC eli-
gibility requirements while they attempted to make
a gradual transition from public assistance to self-
sufficiency This meant that SETO participants had
one year in which to build up equity in their busi-
nesses without suddenly losing all their AFDC
health, food and income benefits.
Patricia Tototzintle, who managed the SETO
program, describes the typical SETO client as
follows:
In general SETO clients are single moms
struggling to raise their children. Their monthly
AFDC check does not cover all of their regular
monthly expenses. The majority of our clients
have no savings to fall back on, no real assets or
property no friends or close relatives able to pro-
vide financial support to a new business, and they
are not considered good credit risks. As low
income single parents, they are faced with daily
barriers related to housing, food, clothing, trans-
portation, child care and education. Low self-
esteem is common among our clients as they
enter the program.
From March 1988 through November 1991,
398 women attended SETO orientation sessions.
Of these women, 229 enrolled in the training pro-
gram and 188 completed the course. Sixty-eight
new businesses have been launched, 23 with
SETO loans. (SETO has its own financing pro-
gram, making stepping loans from $500 to
$5,000.) Fourteen of these businesses also
include a partner or other employees. Seventeen
of these new business owners have already made
the transition off AFDC and are now able to sup-
port themselves and their families without the help
of welfare benefits. Another 19 clients completed
the training and then, using their new skills and
self-confidence, were able to find regular employ-
ment; they are currently off AFDC as well. Thirty-
one SETO clients chose to enroll in other
education or training programs in order to pursue
their employment goals.

Kim is 25 years old and has a seven-year-old
child. She has been on AFDC for the last six years
and wants to start a snow plowing business. She
wanted to borrow $6,000 to purchase a truck and
plow She planned to mow lawns in the spring
and summer and to work part-time as a waitress
to provide year-round employment. WEDCO/WV
assisted Kim in completing her business plan and
cash flow projections. It soon became clear that
the snow plowing business could not generate
enough income to support her and her daughter


The lawn mowing business actually looked much
more attractive when the financial projections had
been completed. Therefore, Kim decided to post-
pone the snow plowing business and not go into
debt or jeopardize her welfare benefits. Between
mowing lawns and working part-time as a wait-
ress during the spring and summer Kim can save
enough money to put a down payment on a truck
and plow by next winter She expects to be off
welfare before the year ends.

The problems faced by SETO clients are
similar to those of other WomenVenture clients, but
usually they are intensified. Child care is an ongo-
ing concern to most, as is transportation. In addi-
tion, many women face opposition from family
members, particularly spouses or partners, who
often attempt to undermine their determination to
support themselves.

A SETO client had completed her cash flow
projections and was in the final stages of planning
her business. Her husband was unemployed. She
came to WomenVenture for her scheduled
appointment wearing sunglasses to camouflage
her black eyes and bruises. She said she had
been sitting at her kitchen table working on her
business plan when her husband, who had been
drinking, flew into a rage, picked her up and
slammed her down onto the floor She said he
had never done anything like this before. It was
suggested that her decision to go into business
might have something to do with his action. The
client called a few days later to say that she and
her partner had talked things out and everything
seemed to be back to normal. However the night
before her next WV appointment he again flew
into a rage and physically abused her Thereafter
she decided not to mark her future appointments
on her calendar and the beatings stopped.
A client's partner had been a drug addict for 16
years. He had harassed her every time she tried to
work or go to school and did the same after she
completed her SETO training. She filed a restrain-
ing order to protect herself and her children, but
he continued to threaten her until he finally moved
out of the state. That ordeal over she learned that
her 15-year-old daughter is pregnant.

Because SETO clients do have special
needs, new approaches have been developed. A
Research and Development (R&D) track has
been established for those who need more time
and/or experience in developing their business
ideas. R&D clients work together in small groups
where they receive ongoing support and critiques
of their ideas as they move along. They also have




































access to smaller "circle loans" of from $10 to $100
(called circle loans because loans are given
to group members on a rotating basis). These
loans allow clients to develop and test various
prototypes before actually developing their busi-
ness plan.
In 1990, a Business Law Clinic was formed,
with the assistance of a local college. Law stu-
dents, supervised by practicing attorneys working
on a pro bono basis, provide free legal assistance
to SETO clients that they could never afford on
their own.
WomenVenture also offers SETO clients
monthly support group meetings, help in han-
dling social service related problems and follow-
up assistance once their business is underway.
The new staff position of "circuit rider" has recently
been created to aid SETO clients at their place
of work.
Stacey Millet joined WomenVenture in 1989, just
after the merger of WEDCO and CHART She has
a background in both journalism and business,
having operated her own microenterprise as well
as working in the corporate world. Initially Stacey
was involved in marketing the career services pro-
grams and developing some of WVs educational
materials. However in October 1991, she took on


the new assignment of circuitt rider" to provide on-
site assistance to SETO clients. Once their busi-
ness is in operation, many of these women
experience a sense of isolation as they rarely have
family members or friends who understand and
can assist them in meeting their business needs.
Stacey views one of her major roles as making the
women aware that there is someone on call who
understands and can help.


Accomplishments To Date
In 1984, when WEDCO began, its founders
thought it might help about 25 new businesses
get started. But since 1984, WomenVenture has
assisted over 1,000 new businesses get underway
in Minnesota and has provided training and con-
sultation services to an average of 900 women
per year. As of April 1990, over $886,000 had
been loaned to 81 women in the form of 92 direct
loans and 15 guarantees to banks. Thirty-eight of
these loans have been repaid in full; 13 have been
written off.
While WomenVenture clients have started
businesses in all industry sectors, they are con-
centrated in what are called "service" industries.
A breakdown would be as follows:








Businesses of WomenVenture Clients


Business Services
43%


Retail/Wholesale
20%


In addition to food service and retail sales,
WomenVenture businesses include a medical
transcription business, wholesale book distribu-
tion, temporary day care employment service,
picture framing, tailoring, graphic arts, florist,
monogramming and silkscreening.
A 1987 evaluation of the business develop-
ment program included interviews with current
and former clients. Respondents reported positive
changes in terms of greater self-confidence, focus
on and planning for life goals, taking charge of
one's life and personal organization, which they
attributed to their association with the program.
Two-thirds of clients surveyed who now defined
themselves as "moderately successful" and one-
quarter who now considered themselves
"extremely successful," gave substantial credit to
WEDCO for their improved situations. Clients
defined personal success in various terms, includ-
ing achieving balance and satisfaction in life, hav-
ing financial stability and security having satis-
fying and fulfilling work, setting and reaching goals,
having a successful business, having a positive
sense of self-worth and reaching one's potential,
having healthy and supportive relationships.
Aside from the direct financing involved, the
services valued most by clients were training,
completing a business plan, loan packaging and
doing financial projections.


Manufacturing
17%






Other Services
12%



Food Services
8%


Broader Impacts and
Future Challenges
We believe that the program is about chang-
ing people's lives, removing barriers and giving
them new economic tools. Long term, we believe
that we are developing people who see them-
selves as having marketable skills, life choices and
economic opportunities.
Kathy Keeley


A difficulty that will be faced by most suc-
cessful programs is when the time comes to
expand their services in order to meet greater
demand for services and/or to respond to the
more diverse needs of their clients. While the mer-
ger with CHART, that resulted in the establishment
of WomenVenture, seemed like a sensible
approach to broadening WEDCO's ability to help
women seeking self-sufficiency, the merging of
two organizations with different operating styles,
unique staffing dynamics and somewhat diverse
clienteles, was not easy New ways of managing
programs, working with staff and clients, raising
funds and the like were required. One reason the
new name WomenVenture was adopted was to
help create a sense of unity between the two pro-
grams.






In addition, the success of the WEDCO
model brought an ever-increasing amount of pub-
licity and requests for information from individuals
and organizations throughout the U.S. and
beyond. While this attention created important
opportunities to impact the field of mircoenterprise
development more broadly, it also placed added
stress on a small staff trying to run a service pro-
gram with limited resources.
Another common transition organizations
must face is when the founding members move
on, as has happened with most of the core staff
who established the business development pro-
gram at WomenVenture. Keeley herself stepped
down as president in early 1992, to work directly
with the Corporation for Enterprise Development
in Washington, D.C., seeking to design new wel-
fare policies that invest in the economic develop-
ment of low-income people. WomenVenture's new
president, Kay Gudmestad, comes to the Twin
Cities with a background in management of non-
profit organizations serving the needs of women
and girls and in small business management. In
her view:
The time has come for WomenVenture to
undertake a comprehensive organizational devel-
opment process that will complete the transition
phase initiated by the merger and enable the
organization to achieve a new level of quality in
service delivery Through the evaluation of impact
of existing services and assessment of needs in
this community WomenVenture will position itself
to build its leadership role in this community and
continue to contribute to national thinking in small
business development for women.
WomenVenture continues to evolve as it
keeps pace with the needs of its clients and with
the times. The organization has recently stream-
lined its operations, paring its operating budget
down to $930,000 for 1992 (from a high of $1.4
million) and reducing the staff from 33 to 18. One
of the goals is to make greater use of volunteers-
linking clients to the appropriate professionals-
rather than having staff do all the work.
WomenVenture has also created several
new approaches to help low-income women
achieve self-sufficiency.
SProject Blueprint addresses the issue of
occupational segregation by recruiting and
training women for well-paying jobs in the
male-dominated construction trades. It com-
bines traditional career training skills with
manual and physical training, job placement


and personal effectiveness skills.
*Passport is a pilot program operating in two
low-income communities in Minneapolis and
one in St. Paul. It is designed to help com-
munity residents find a permanent job or
become self-employed and to establish com-
munity businesses.
What about the issue of self-sufficiency?
Fees from clients currently cover less than five
percent of WomenVenture's operating budget-
not surprising given that in 1991, 58 percent of its
clients had annual incomes of $15,000 or less.
WomenVenture, therefore, tries to seek as broad a
funding base as possible, receiving support from
a range of sources including foundations, corpo-
rations, individuals, state and federal governments
and from contractual work.
WomenVenture continues to be a strong
advocate for women's economic development not
only locally, but also at the state and national lev-
els. The organization has made good use of atten-
tion from the media, including being featured on
60 Minutes, currently rated as the most popular
TV news program in the United States.
It was largely through WomenVenture's lob-
bying efforts that the demonstration program
offering waivers to AFDC recipients was created;
and WomenVenture continues to lobby for exten-
sion and expansion of such programs nationwide.
The "WEDCO" business development model has
also served as the inspiration for numerous wom-
en's economic development projects in other
parts of the U.S. (some of these are profiled in the
Appendix). Visitors from over 40 states and from
foreign countries have come to the Twin Cities to
study the business development model. Women-
Venture also has produced a variety of manuals
that both individuals and organizations can use in
helping women establish and successfully oper-
ate small businesses.


Lessons:
1. Programs to assist low-income women
become self-employed must provide their clients
with three unique types of services. First, they
must provide them with information, technical
assistance and access to credit-the tools they
need to successfully start and grow their busi-
nesses. Second, they must also provide women
with special training and experiences that will help
them build up their self-confidence and increase
their sense of self-esteem so they can overcome




































the numerous hurdles they will face, both person-
ally and professionally, and be able to compete
successfully in the marketplace. Third, they must
help their clients address and overcome the gen-
der-related obstacles that, as women, they will
encounter in the business world.
2. Self-pacing and self-selection help
women gain skills and confidence at the same
time. At WomenVenture women are free to move
ahead at their own pace and can exit (and re-
enter) the program at any point without feeling that
they have failed. The "stepping" principal has
been used both to divide the program's content
into manageable elements and to provide financ-
ing in increments that prevent fledgling entrepre-
neurs from overextending themselves.
3. The best way to build client self-reliance is
through participation in and exposure to good
business practices. WomenVenture insists that cli-
ents develop a business plan (that includes the
business' target market, funding requirements,
performance expectations and at least a two-year
projected cash flow) before they apply for credit.
Even if WomenVenture provides the financing, cli-
ents are charged market rates of interest and are


required to put up some collateral in order to
receive loans. This puts the transaction on a firm
business footing and prepares the client to oper-
ate as a business.
4. To effectively assist clients, programs
themselves must practice what they preach; they
too must operate in a business-like manner. Staff
need to have a working knowledge of how to run
a business, particularly how to project cash flow
and assess working capital needs. Programs also
must be realistic about what is possible within the
current marketplace and keep attuned to its
fluctuations.
5. To successfully assist low-income women
achieve self-employment, programs must
become agents of change. From the start,
WEDCO/WomenVenture took an activist role
within the community and, gradually, at both the
state and national levels in order to change poli-
cies that limit women's ability to become self-sup-
porting. As part of this effort, WomenVenture has
made very effective use of the media. This has
helped them to increase public support for their
program and recruit new clients as well as to influ-
ence public policy


. A 11 XW







Notes
a. U.S. Department of Labor, Bureau.of Labor Statistics,
Handbook of Labor Statistics (Washington, D.C.: Govern-
ment Printing Office, 1983) and U.S. Bureau of the Census,
Statistical Abstract of the United States 1990 (Washington,
D.C: U.S Government Printing Office, 1990)
b. Grossman, Allyson S., "More Than Half of All Children
Have Working Mothers," Monthly Labor Review 105 (Feb
1982), as cited in Bianchi and Sprain, American Women in
Transition (New York: Russell Sage Foundation, 1986)


c. Statistical Abstract of the United States 1990
d. Blank, Rebecca M., "Women's Paid Work, Household
Income, and Household Well-being," in The American
Woman 1988-89, Sara E. Rix ed., (New York: WW. Norton
& Company, 1989)
e. U.S Bureau of the Census, "Poverty in the U.S: 1985", in
Current Population Reports, Series P-60, No. 158 (Washing-
ton, D.C: Government Printing Office, 1987)
f. The State of Small Business: A Report of the President
(Washington, DC.: U.S. Government Printing Office, 1989)


AV.C
wit=_ -n now






Appendix
The following is a sampling of microenterprise development programs in the United States
selected to show the wide range of constituencies and geographic locations being served by such
programs. A more comprehensive listing of U.S. programs can be found in the 1992 Directory of
Microenterprise Programs listed under publications.


Women's Self-Employment Project (WSEP)
166 West Washington, Suite 730
Chicago, Illinois 60613
(312) 606-8255

WSEP provides credit, technical assistance and
training through an individual lending program, a
group lending program (the Full Circle Fund) and
an Entrepreneurial Training Program. WSEP's ser-
vices are targeted to low and moderate income
women in the Chicago area. Its goal is to assist
these women to achieve self-sufficiency through
self-employment.

Coalition for Women's Economic
Development (CWED)
315 West 9th. Street, Suite 705
Los Angeles, CA 90015
(213) 489-4995

CWED provides credit and technical assistance
services to low-income women in the Los Angeles
area through a micro-business workshop, a soli-
darity circle program and a revolving loan fund.
The solidarity circle program is modelled after
Acci6n International's model which forms groups
of borrowers in order to provide peer support and
exchange and to encourage loan repayment.

Good Faith Fund
400 Main Street, Suite 118
Pine Bluff, Arkansas 71601
(501) 535-6233

The mission of the Good Faith Fund is to widen
the profile of future entrepreneurs to include
women, minorities and dislocated workers
through the delivery of credit and credit services
and to raise the income levels of low-income and
self-employed people. The Good Faith Fund was
one of the first programs developed in the U.S. to
test the Grameen Bank's (Bangladesh) group-
lending model. Created in 1988, the Good Faith
Fund currently offers group and individual loans
to entrepreneurs in rural, sparsely populated
counties within the state of Arkansas.

Maine Displaced Homemakers Program
Stoddard House
University of Maine
Augusta, Maine 04330
(207) 621-3432


The program's primary goal is to help prepare
disadvantaged women to participate fully in the
state's changing economy through innovative pre-
employment and self-employment training and
support services.

The Lakota Fund
P.O. Box 340
Kyle, South Dakota 57752
(605) 455-2500

Located on the Pine Ridge Indian Reservation,
the Lakota Fund's mission is to support the devel-
opment of private Lakota-owned and operated
businesses on the reservation by providing finan-
cial and technical assistance and by fostering per-
sonal development. Its circle banking project uses
a group lending methodology inspired in part by
the Grameen Bank.

Center for Community Self-Help
413 East Chapel Hill Street
Durham, North Carolina 27701
(919) 683-3615

Affiliated with the Self-Help Credit Union, this pro-
gram is a partner with local organizations in the
North Carolina Urban Microenterprise Program.
The Center also provides small to medium-sized
loans and technical assistance to businesses and
projects that address the economic needs of rural,
minority, female and low-income people in the
state.

Eastside Community Investments (ECI)
3228 East 10th. Street
Indianapolis, Indiana 46201
(317) 633-7303

ECI's goal is to create jobs and improve the quality
of housing in a disadvantaged section of Indian-
apolis. It has pioneered an innovative self-employ-
ment program for day care providers and also is a
participant in the demonstration program to pro-
vide self-employment services to women on
AFDC.

Women's Initiative for Self-Employment
(WISE)
P.O. Box 192145
San Francisco, California 94119
(415) 512-9471






WISE links lower-income women with skills, infor-
mation and financing to help them support small
and micro-enterprise business development. It
also works to remove institutional barriers that pre-
vent women's equal participation in the economy

Other Organizations that Provide Information
on Self-Employment and Microenterprise
Development in the United States

Association for Enterprise Opportunity
320 No. Michigan Avenue
Suite 804
Chicago, Illinois 60611
(312) 357-0177

The Corporation for Enterprise Development
777 North Capital Street, N.W.
Suite 801
Washington, DC. 20002
(202) 408-9788

The Self-Employment Learning Project
1333 New Hampshire Avenue, NW.
Suite 1070
Washington, D.C. 20036
(202) 736-5807

Women's Economic Development Program
The Ms. Foundation
141 Fifth Avenue, 6th. Floor
New York, New York 10010
(212) 353-8580

Publications
Please contact publishers directly to ascertain
availability, cost of publications and/or shipping
charges.

The Business of Service Business, The Business
of Small Business, The Business of a Professional
Practice, and Loan Fund Manual [available in Fall
1993] (WomenVenture, 23-24 University Avenue,
Suite 200, St. Paul, Minnesota 55114, USA. Tele-
phone: (612) 646-3808; FAX: (612) 641-7223)


The Business of Self-Sufficiency: Microcredit in the
United States, by Valjean McLenighan and Jean
Pogge, 1991. (Woodstock Institute, 407 South
Dearborn, Chicago, Illinois 60605, USA. Tele-
phone: (312) 427-8070)

Enterprising Women: Local Initiatives for Job Crea-
tion, 1989. (OECD Publications Service, 2, rue
Andre-Pascal, 75775 PARIS CEDEX 16, France)

1992 Directory of Microenterprise Programs, Mar-
garet Clark and Tracy Huston, eds., 1992. (Self-
Employment Learning Project, The Aspen
Institute, 1333 New Hampshire Avenue, NW, Suite
1070, Washington, D.C. 20036, USA. Telephone:
(202) 446-6410; FAX: (202) 467-0790)

Hopeful Change: The Potential of Micro-Enterprise
Programs as Community Revitalization Interven-
tion, by Jacqueline Novogratz, 1992. (The Rock-
efeller Foundation, 1133 Avenue of the Americas,
New York, New York 10036, USA. Telephone: (212)
869-8500)

Opening the Marketplace to Small Enterprise:
Where Magic Ends and Development Begins by
Ton de Wilde, Stijntje Schreurs with Arleen Rich-
man, 1991. (Kumarian Press, 630 Oakwood Ave.,
Suite 119, West Hartford, Connecticut 06110-1529,
USA. Telephone: (203) 953-0214; FAX: (203) 953-
8579)

Widening the Window of Opportunity: Strategies
for the Evolution of Microenterprise Loan Funds
prepared by Shorebank Advisory Services, Inc.,
1992. (The Charles Stewart Mott Foundation, Mott
Foundation Building, Flint, Michigan 48502-1851,
USA. Telephone: (313) 238-5651)

Women Ventures: Assistance to the Informal
Sector in Latin America by Marguerite Berger and
Mayra Buvinic, 1989. (Kumarian Press, West Hart-
ford, Connecticut [see address above])






Design: Ann Leonard
Cover Photo: Laura A. Crosby
Typography: Village Type & Graphics
Printing: Graphic Impressions






Other Editions of SEEDS Currently Available
No. 2 Hanover Street: An Experiment to Train Women in Welding
and Carpentry-Jamaica (English, Spanish)
No. 3 Market Women's Cooperatives: Giving Women Credit-Nica-
ragua (Spanish)
No. 4 Women and Handicrafts: Myth and Reality-International
(English, Spanish, French)
No. 5 The Markala Cooperative: A New Approach to Traditional
Economic Roles-Mali (English, French)
No. 6 The Working Women's Forum: Organizing for Credit and
Change-India (English, French)
No. 7 Developing Non-Craft Employment for Women in Bangladesh
(English)
No. 8 Community Management of Waste Recycling: The SIRDO-
Mexico (English)
No. 9 The Women's Construction Collective: Building for the Future
-Jamaica (English, Spanish)
No. 10 Forest Conservation in Nepal: Encouraging Women's Partici-
pation (English, Spanish, French)
No. 11 Port Sudan Small Scale Enterprise Program-Sudan
(English)
No. 12 The Muek-Lek Women's Dairy Project in Thailand (English)
No. 13 Child Care: Meeting the Needs of Working Mothers and Their
Children (English, Spanish)
No. 14 Breaking New Ground: Reaching Out to Women Farmers in
Western Zambia (English, French)






If you would like additional copies of this issue or any of the editions
of SEEDS listed above, please write to us at the address given
below. Copies of selected SEEDS issues in local languages are
currently being published by organizations in the following countries:
Egypt, India, Indonesia, Kenya, Nepal, Pakistan, Thailand and Viet-
nam. Please write to us for more information if you are interested in
these materials.

Ann Leonard, Editor
SEEDS
P.O. Box 3923
Grand Central Station
New York, New York 10163, U.S.A.






































































































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