Adventures in Business Owning

Chris Sikes, executive director of the Western Mass. Enterprise Fund (WMEF), says that when it comes to micro-enterprise, focusing on one sector at a time is the best way to provide assistance and measure success.

“Power is found by going industry to industry,” he said, noting that restaurants, animal care enterprises, and health, wellness, and beauty ventures are among the clusters of activity the WMEF hopes to work with in the future.

Today, though, the WMEF is focusing in particular on one rather small but significant facet of the region’s economic landscape: child care.

“There is no micro-entrepreneurial sector in Western Mass. right now that is seeing more activity than child care,” said Sikes, noting that this reality, and the importance of early education to the region’s economic stability, are two reasons why the WMEF has entered into a new, multi-partner agreement to take the softest voices in the child care market and make them heard.

“I’ve wanted to do this for a long time,” he said.

The WMEF is a nonprofit entity that provides access to resources such as grants, training opportunities, scholarships, loans, tax credits, and gap financing in concert with area banks to new and small business ventures. In October of 2005, the group entered into a partnership with Square One, formerly Springfield Day Nursery, to assist family child care providers — those that offer child care out of their homes — acquire new business loans and acumen.

That program has recently received a new infusion of funds thanks to a grant made by the Irene E. and George A. Davis Foundation, a private philanthropic body based in Springfield that typically awards grants to culturally and educationally relevant causes. As such, the program will be expanding to assist a larger number of family child-care providers across Western Mass. this year.

Square One already offers a variety of services to family child care providers (FCCs) who are licensed by the Commonwealth, but according to Joni Beck Brewer, vice president of Family Services for the network of early education centers, the entrepreneurial nature of this new partnership is a welcome departure.

“It’s a great partnership for us because we know human services and education, but the WMEF’s business expertise adds a lot,” she said. “It also goes hand in hand with the changes we’re seeing in the family child care world; there’s a strong move toward fostering more educational activities for the children, and to do that, providers need to see themselves as educators and business owners.”

Sikes said the partnership stemmed from a meeting between his organization, Square One, and the Preschool Enrichment Team (PET), a nonprofit training organization based in Springfield that develops training courses and curricula for day care providers. He added that the WMEF had long hoped to develop and offer new resources for the FCC sector, because while it’s one of the more robust cells of business activity in Western Mass., it’s also one of the most overlooked.

“We wanted to develop a business program, because these are not babysitters. These are professionals, who are often unaware of that fact themselves.”

In Its Infancy…

In order to provide assistance to the greatest amount of FCCs in the Greater Springfield area, Sikes said the WMEF needed to identify an existing network of providers, and did so through Square One.

The pilot program, launched in 2005, included three components, the first of which was the training provided through PET, for which the WMEF paid for out-of-pocket, Sikes said.

“These were basic business courses tailored for the issues that face the family day care provider,” he explained. “Marketing, bookkeeping, policies and procedures, and tax issues were all covered, but in a targeted way, in order to ensure these business owners got the support they need.”

In addition, the WMEF provided one-time business loans to participants ranging from $500 to $2,000, depending on an FCC’s needs. The loans served to, as Sikes said, allow FCCs to “build to a place at which they can become more business-oriented.”

“The goal wasn’t so much to make business loans as it was to get family care providers thinking of themselves as businesses,” he said, noting, however, that the loans were reported to the major credit bureaus, thus improving each recipient’s personal credit score as they paid the loans back. Throughout the course of the pilot program, Sikes said, only one payment came in late.

“That’s a huge show of success, especially since some of these participants are high credit risks,” he said.

The third aspect has become a pivotal piece of the project as it matures; however, Sikes said it was one that, at first, was unexpected.

“The final, unforeseen benefit of that program was that the providers got a chance to network amongst themselves,” he concluded. “The importance of the peer networking component was evident right away. Family child care providers are often isolated, and never get the chance to compare notes with others. Through meeting each other regularly at training sessions, they were able to discuss common issues, and draw from each others’ strengths.”

Granting Wishes

Helen Shea, family child care coordinator at Square One, said the state requires that small business training be made available to FCCs, but due to a lack of funding, Square One’s role in providing this assistance has long been smaller than the early-childhood provider would have liked.

“We were trying to get by on teaching policies and procedures,” she said. “State funding has truly been inadequate.”

She added that a lack of support and funding is also a reality for FCCs, who receive approximately $25 per child in reimbursement for providing child care services.

“That’s barely enough to make ends meet,” said Shea. “It’s very difficult for them — there’s no room for error.”

Due in part to these pressures, Shea said interest in the pilot training and loan program was high enough to necessitate a lottery draw for participants, and that bodes well for the future of the initiative.

What’s even better, however, is the $45,000 grant the WMEF has just received to prolong and expand the FCC assistance program. Awarded by the Davis Foundation, the grant will allow the partnership to serve providers in Holyoke as well as Greater Springfield, and to enter into a third collaboration with the Valley Opportunity Council (VOC) based in Holyoke to offer a greater number of training opportunities for eligible FCCs in Holyoke, Chicopee, Springfield, Westfield, Agawam, West Springfield, and South Hadley.

The next generation of the program will offer training from PET, peer support from Square One, and a similar set of loans from the WMEF, as well as a new set of business and child care courses provided by the VOC. Sikes said the WMEF is also exploring the possibility of identifying, or even inventing, a health care insurance program to collectively serve FCCs that participate in the program.

“The way these things go is the private money comes in first, and that’s when we get a chance to be innovative and prove that a program works,” he explained. “Then, the public money follows, and that’s about where we are now.”

But it’s a position that includes a modicum of power, that this partnership is working to leverage.

“This is something we’d like to see funded permanently,” said Sikes, “and we have some positive, loud voices helping us get there.”

Jaclyn Stevenson can be reached at[email protected]