How are fashion designer Tory Burch and a financial tool used for centuries in developing countries transforming the American economy?
One small business at a time.
Burch, who runs one of the nation’s fastest-growing companies, and her team of business experts, came to Chicago Wednesday to mentor a group of women running their own small businesses.
Burch knows the struggle well. As a single mother, she started her fashion empire at her kitchen table. Years later, she has about 1,000 employees, 61 US retail stores, and revenues expected to top $500 million, according to the Wall Street Journal. Burch has also launched a foundation designed to provide economic empowerment to women and their families, hoping to grow a flourishing crop of women-owned businesses nationwide. Those businesses can create jobs and transform families and communities.
“This is so important, ” she told the group.
According to the US Small Business Administration, small businesses employ more than half of all workers in the private sector, and make up more than 90 percent of the nation’s employers.
“The women who are meeting here today we’re not even small business, we’re micro business. I have no staff. I’m it,” said Patti Sheehan, owner of a specialty boutique that sells wigs and prosthetics for breast cancer patients. The store is called Second Act-which sums up her life too. Sheehan left her career in advertising to pursue her passion.
“There’s a lot of cancer in my family. My Dad died of pancreatic cancer 20 years ago, my mom died of ovarian in 2007,” Sheehan explains. ”I decided to make a switch, and took the advice I used to give my marketing clients..find a niche.”
She took her savings account and poured it into the business, but the economic downturn hit hard. She was faced with either pleading with banks for a loan, or shutting down.
“It was so sad to think about closing. The thought of abandoning those women, if I leave..if I close they have no one,” she said.
Like the other women at the table, Patti found help at ACCION- one of the nation’s leading providers of micro loans. She was able to secure $12,000 to keep her business running, and has two years to pay it back.
The concept of granting small loans to businesses has been used for years in developing countries, and is slowly gaining ground in America.
“We are an alternative to no,” said Mary Fran Riley, vice president of resource development at ACCION Chicago. And, in this economy, “no” is a common response to small business owners looking for bank loans.
“We looked at ourselves as years ago priming the pump. Helping people get started , helping people get a bank loan,” said Riley. ”We now see a lot of folks who could have gotten bank financing years ago, but can’t get it now.”
ACCION provides a lifeline that goes far beyond money.
The agency’s partnership with the Tory Burch Foundation provides a steady stream of advice from successful business owners, including the fashion designer herself.
“Do any of you blog?” Burch asked the women. Burch, an avid user of social media, advocated the use of Twitter, Facebook and FourSquare to drive sales.
Patti Sheehan is looking for help in finding other retail products she can sell to improve her bottom line.
Renee Estese, of Oak Park Ill., wants some help franchising and growing her unusual business-a commuter bus-turned mobile coffee shop. She calls it Mojo Express, and explained how she got the idea.
“We were over at the high school watching fireworks and the ice cream truck was there,” she said,” and my husband said ‘too bad the ice cream truck doesn’t sell coffee.’ A lightbulb went off—a coffee bus!”
So, with a $5,000 loan from ACCION and money Estese borrowed and saved, she bought an old bus, and got friends and relatives to build a coffee kitchen inside.
“There’s a lot of things I want to do with this business. My future goal is to franchise and leave it to my kids.”
But Estese has Lupus which leaves her unable to work a traditional job, and unable to work the early-morning hours that would benefit her business.
“You want more buses? and people to run the buses, ” asks Burch. “Everyone here is looking to grow.”
That growth, Burch said, is best achieved in the company of other entrepreneurs.
“We realize that women are great at helping each other, and there’s synergy,” she said.
“I went to Haiti before the earthquake,and women there helped each other. If one woman was behind on her loan, the others would pitch in and help.”
Nationwide, ACCION has financed 24,000 loans so far, with a repayment rate of 90 percent. Of the 30,000 applications sent to the Chicago office, 300 business owners will qualify for loans, and each of those loans creates approximately two jobs.
For Pamela Jones, her loan could likely create more.
Jones, a military veteran, ran a restaurant, and decided to bottle her sauces when that restaurant closed. She started out door to door, peddling her Char-Boy Hot Honey Asian and Southern BBQ sauces to local supermarkets.
On weekends, she’d set up a folding table in the supermarket aisle to let customers taste her products. She described the day that changed everything.
“I was approached by this gentleman, he said we have to have you in our stores. I said who are you? He said Walmart.”
Jones couldn’t believe her luck, then the panic set in
“I thought wow, this is fantastic, Walmart is interested. Where am I going to get the money to make all this sauce? I didn’t know where to go. Never had a business loan.”
Jones turned to ACCION for a $12,000 loan. It was a lifeline.
“Without that loan, I couldn’t have launched this product. I would have been stagnated, stuck and missed out on a fabulous opportunity,” she said.
Jones says Tory Burch has become her inspiration.
“For me, I feel like it gives me the motivation and energy, it also makes me want to succeed to be able to give back.”