MICROENTERPRISE FACT SHEET
Microenterprise in Washington State
According to US Census Bureau and US Department of Commerce there are 428,667 microenterprises in Washington accounting for 17% of all employment in the state. These businesses fall far below the SBA size standard for small business, defined as having 500 or fewer employees and less than 5 Million in sales.
Urban / Rural Microenterprise Employment
According to Association for Enterprise Opportunity Study of Employment Statistics (MEES) Rural/Urban Breakout Three Year Analysis, for year 2002 Washington state microbusinesses employed 75,511 rural employees and 508,846 urban employees.
Microenterprise Development Organizations (MDO’s)
There are approximately 20 microenterprise development organizations in Washington State providing business training, technical assistance and access to credit. Businesses served include 1) Professional services 2) Retail, 3) Technology, 4) Trades, 5) Crafts/Art, 6) Manufacturing, 7) Childcare, 8) Environmental, 9) Agriculture/Farming, and others. Most organizations are seasoned with 5 to 10+ years experience. Average number of clients served per organization is between 125 – 300 clients annually. MDO’s historically create new business, generate jobs and advance self-sufficiency through self-employment.
Impacts
· A four year study conducted by a Washington State MDO and published by the US Department of Health and Human Services[1] demonstrated the impact of a microenterprise program on disadvantaged populations. Of 240 individuals served, 86 new businesses were formed, 105 jobs were created by the new businesses and 120 individuals became self-sufficient. The cost per job well below $8,000 and public savings in excess of $2.2 Million (based on family of 4 receiving 19,000 annually in public assistance).
· Twenty-seven states with MDO associations have enacted legislative policy and fiscal support for training, technical assistance and lending. Sources include general funds, CDBG, TANF, Workforce Investment Act, and Tax credits
Statement of Need
· Most microenterprises do not meet eligibility standards for assistance by traditional financial institutions as well as the US Small Business Administration due to size, credit and experience.
· Most financial institutions do not lend in the capital range needed by most microenterprises, between $250 - $35,000
· Washington currently has insufficient capacity to service this sector with twenty MDO’s and over 425,000 microenterprises. Current capacity reaches just 2,500 - 6,000 (based on average) annually.
· Current study of state MDO’s indicate that they face sustainability challenges; want pooled resources; need to maximize capacity and reach scale; need state-level funding to leverage resources.
Client Success
Shannon Goldsberry was a single mom fleeing domestic violence and seeking a new life. She attended school and became a licensed massage practitioner. It was suggested she approached the SBA for a loan. Falling short of their eligibility criteria she sought other resources. Finding assistance through the Center for Economic Opportunity (MDC), Shannon was able to get the business assistance and micro loan she needed to launch her business. No longer needing public assistance, she became self-sufficient. Nine years later she is still in business, paying taxes and contributing to our states economy.
Prepared by Teresa Lemmons, Metropolitan Development Council , Tacoma, WA 253-591-7026
[1] US Health and Human Services, Job Opportunities for Low Income Individuals Best Practices, January 2001 (Re: Metropolitan Development Council, Tacoma, WA, Center for Economic Opportunity)