Micro-Business Development Program
  
  
  I. TOPIC:         Community Economic Development     
                    
  II.     SUBJECT:       Micro-Business Development Program
  
  III.    LOCATION: Vermont -- State-wide
  
  IV.     SUMMARY:
  
  Originated in 1988, the Micro-business Development Program
       (MBDP) is a partnership between five Community Action Agencies
       (CAA's) and the State of Vermont Office of Economic Opportunity. 
       Each CAA houses a MBDP staff person or Business Development
       Specialist who provides technical assistance to income-eligible
       Vermonters interested in starting or expanding businesses.  The State
       provides access to financing through its Job Start Loan Program.  The
       Business Development  Specialists offer  both classroom training and
       one-on-one  assistance to program participants.  Central Vermont 
       Community Action Council (CVCAC), one of the CAA's, acts as the
       lead agency and  houses the MBDP Director.
       
  V. SUCCESSFUL PRACTICE
  
  Implementation of  a state-wide program to teach low-income
       individuals who want to start a micro-business -- or begin self-employment -- how to write a business plan, make a loan application,
       and manage their  start-up business   
       
  VI.     CONTACT
  
  Mary Niebling
          Director, Micro-Business Development Program
     Central Vermont Community Action Council
     (A Community Action Agency)
     15 Ayers Street
     Barre, VT 05641
     (802) 479-1053
     (802) 862-9411 (Fax)
  
  VII.    CASE STUDY
  
  The Problem:  The start-up of a micro-business or the pursuit of self-employment is a viable alternative for many low-income individuals,
       particularly in areas where employment opportunities are limited. 
       However, most  low-income individuals lack the skills  to develop a
       business plan and lack access to start-up capital.
       
  The Approach Adopted:  Initiate a micro-business and self-employment program where low income individuals are taught to
       write a business plan, make a loan application and manage their
       business.
       
       How They Implemented The Approach:    More than 80%  of 
       Vermont's businesses have fewer than 10 employees, and more than
       60% of them  have no more than four employees.  Small  businesses
       form the background  of the state's economy, yet many in Vermont
       have a  hard time obtaining loans to either start a business or expand
       an existing one.  This is even a greater problem for a low-income
       individual without any business experience
       
       CVCAC, in partnership with other CAA's, private funding
       organizations (such as Working Assets), banks, state, federal and
       local government  funding sources decided to attack this problem
       through the creation of a  state wide micro-business development
       program targeting income-eligible Vermonter's who were at or below
       125% of the official poverty guidelines.  
       
       Micro-business Development Specialists were established at each of
       Vermont's CAAs, developing a statewide network to provide 
       classroom training , business development technical assistance and
       individual counseling services to low income entrepreneurs.  Being
       located within the CAA structure facilitated  the identification of
       potential program participants and increased awareness of the Micro-business Development Program among low income persons already
       using CAA services.
       
       In a rural state like Vermont, networks among service providers are
       an effective means of coordinating and streamlining services.  A
       variety of state agencies also served as primary partners for the
       MBDP including Vermont Job Start (a business start-up loan
       program), The Vermont Department of Employment and Training,
       the Division of Vocational Rehabilitation, and the Small Business
       Development Program.  The latter three partners were sources for
       mutual referrals of the eligible low-income clientele to technical
       assistance services provided by the Micro-business Development
       Program, e.g. MBDP clients may have attended training provided by
       SBDC which was more convenient in time or place.
       
            Other lending institutions within the state provided referrals of low
       income loan applicants to Vermont Job Start.  In some instances 
       Vermont Job Start referred these loan applicants to the technical
       assistance services provided by the Micro-business Development
       Program.
       
       Results:  564 eligible low-income Vermonters  participated in the
       program.  5,183 hours of technical assistance were provided, with
       approximately one-third involved in one-on-one technical assistance
       with individual business development specialists.  The additional
       two-thirds was devoted to business development classes.  A total of 
       eighty-five micro-businesses were started or expanded.   
       
  VIII.   PROGRAM SPIN-OFFS
  
  The state of Vermont now includes the needs of low income
       entrepreneurs in its economic development strategies.  Private
       business development programs such as "Working Assets" have
       expanded into Vermont.  Previously "Working Assets" was in all
       other New England states except Vermont.  The Vermont Banking
       Association has endorsed the program  and  state funding has
       replaced federal funding at the completion of the initial federal
       funding support period.   
       
  IX.     KEY WORDS
  
  Micro-business
          Community Action Agency
     Technical Assistance
     Training
     Financing
     CAA's
     Self-employment
     Business plan
     Small Business
     Counseling
     Entrepreneurs