Presentation to the MAPC & Chelsea Collaborative - Engaging Immigrant Entrepreneur

1. Engaging
Immigrant
Entrepreneurs
What we
need to
know?
Alvaro Lima
Director of Research, BRA
MAPC& The Chelsea Collaborative
March 2013

2. We need to know:
 Why they are in business
What are their development paths
What are the enablers and barriers
for success

3. SOCIAL FORMS OF PRODUCTION Production for Profit – How do they differ?
 Ownership Structure
1. Single owner or not incorporated
2. Independently or family owned
3. Limited liability & more complex legal structure
 Employment & Revenue Size & Capital Structure
1. 1-2 people & < 10K & < $100K
2. < 500 people & < $20M …
3. > 500 people …
production production  Financial Structure & Ability to Leverage
for direct for income 1. Simple cash flow & no ability to leverage
2. Bank financing
use 3. External financing, investors, VC, investment banks
Self-  Management Structure
employment 1. Hands-on worker & control everything
(micro-
businesses)
2. Management across all functions
3. Professional management, board, investors
 Skill Sets
production 1. Finding & servicing customers
2. Detailed understanding of industry
for profit 3. Financial and organizational skills
 Employment Size & Structure
Small Growth
businesses businesses  Technology, Production & Markets
1. Low to no technology
2. Single technology, production & markets
3. Multiple products, technology & markets
 Success
1. Make enough individual income & control lifestyle
2. Salary & Profits & Value of Company
3. IPO/share price

4. DEVELOPMENT PATHS
Domestic & Self- Small Growth
Wage Labor employed Employer Business
progression
entry points
? BENEFITS
• Independence
• Limited liability
ENABLERS
• Easy to start
(easy to exit) ?
• Ability to gain BENEFITS
– easy to reach more than wage • Improved stability
customers ENABLERS
• Higher profit
– little skill
training
CHALLENGES/
LIMITATIONS
• Build reputation
and steady client
• Improved customer ?
– low capital base reach
• Volatility/high
requirements • More capital - ENABLERS BENEFITS
failure rate CHALLENGES/ • Lower failure rate
• Fast breakeven fixed costs • Expand client
• Limitations to LIMITATIONS
• Get licenses/ base • Steady profit
profit • Increased • Further customer
permits • Expand org.
• Limited capacity competitive threat structure reach
• More difficult to • Get mgmt. • Scale economies
exit training
• Higher managerial • Get loans CHALLENGES/
involvement needs LIMITATIONS
• Limited capacity • Management
delegation
• Attracting skilled
managers
variable costs fixed costs • Growing IT/
computer needs
technical skills managerial skills
income target return on capital

5. DRIVERS AND DRIVERS OF SUCESSO
SUCCESS DRIVERS BARRIERS TO OVERCOME
Available demand: Limited access to appropriate resources:
• Easy to reach customers • Financing:
• Substantial untapped demand - reduce initial business volatility
• Easy to target customers (niche) - expansion capital
• Networking, referrals • Training:
- managerial training for owner
Personal skills: - advanced skill training for employees
• Entrepreneurial drive, motivation,
courage, persistence Capacity constraints:
• Hard working • Financial constraints
• Past business experience • Regulatory environment
• High employee turnover
Limited resource needs: • Finding/training skilled managers
• Limited seed capital requirements
• Limited additional skill training Lack of managerial skills and strategic vision:
• Difficulty delegating
Other: • Lack of vision
• Visibility of prior business success • Risk aversion
(and/or limited business failure rates)
• Ability to break even fast Competition
• etc… • From larger, more established businesses
• From similar, small businesses

6. DRIVERS AND DRIVERS OF SUCESSO
SUCCESS DRIVERS BARRIERS TO OVERCOME
Available demand: Limited access to appropriate resources:
• Easy to reach customers • Financing:
• Substantial untapped demand - reduce initial business volatility
• Easy to target customers (niche) - expansion capital
• Networking, referrals • Training:
- managerial training for owner
Personal skills: - advanced skill training for employees
• Entrepreneurial drive, motivation,
courage, persistence Capacity constraints:
• Hard working • Financial constraints
• Past business experience • Regulatory environment
• High employee turnover
Limited resource needs: • Finding/training skilled managers
• Limited seed capital requirements
• Limited additional skill training Lack of managerial skills and strategic vision:
• Difficulty delegating
Other: • Lack of vision
• Visibility of prior business success • Risk aversion
(and/or limited business failure rates)
• Ability to break even fast Competition
• etc… • From larger, more established businesses
• From similar, small businesses