LISC Kansas City Promotes Small Business Growth Across the Community
12.20.2023
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LISC StoriesSmall Businesses
Small businesses play a pivotal role in establishing vibrant and thriving communities. They serve as a backbone for communities by creating job opportunities, fostering innovation, and investing in the future of Kansas City neighborhoods.
“The advancement of small businesses is critically important to community growth and revitalization,” said Daniel Serda, program officer for Economic Development with LISC Kansas City. “There's a tremendous amount of unmet demand in Kansas City neighborhoods for goods and services that aren't being provided because of decades of systemic discrimination and disinvestment.”
In 2019, the Kauffman Foundation published a study that shows black and brown entrepreneurs often lack the $5,000 or more in capital that is typically required to establish a small business. Last year, LISC received a generous grant from Kauffman through its Heartland Challenge initiative to provide startup capital grants to small businesses, which are administered through LISC’s local Business Development Organization (BDO) network. These funds go towards startup costs such as registering an entity, hiring an accountant, getting business cards, logo creation and other necessary business expenses.
To start a business from the ground up, most entrepreneurs use personal savings, personal and consumer credit or family wealth. The Kauffman Foundation research also shows that this accumulated wealth is inaccessible for most Black and Hispanic entrepreneurs and business owners. In response, LISC Kansas City used the Kauffman Heartland Challenge grant to launch a small business startup capital initiative that provides up-and-coming entrepreneurs with grant funds that would substitute for that initial capital reserve.
“We also coupled that with technical assistance through our BDO Network partners, Prospect Business Association and The Toolbox. This technical assistance includes financial coaching and professional network access that is essential to help businesses succeed beyond the initial two to three years during which most small businesses fail,” Serda said.
Most businesses that can cross that threshold beyond three years have sustained longevity.
LISC GKC’s small business support is at the core of its economic development work. Investing in community-based small businesses is vital to address the shortage of essential goods and services in LISC’s target neighborhoods, such as grocery stores, apparel stores and dry cleaning, as well as the lack of health clinics and pharmacies. Building up small businesses in neighborhoods that have suffered decades of disinvestment contributes to the overall growth and health of a community and builds wealth for entrepreneurs who have been denied access to economic opportunity and upward mobility.
LISC Kansas City first distributed small business grants in 2021, during the COVID-19 pandemic. These city-funded grants were one-time emergency relief funds designed to reimburse the loss of revenue that businesses were facing due to potential closures.
LISC’s new startup capital initiative started earlier this year. To qualify for the small business capital grant, a business owner must demonstrate a strong interest or passion in their business enterprise, actively participate in training and technical assistance with LISC’s BDO partners, and meet the traditional definition of start-up, which is a term that typically describes a business that has been in operation for less than two to three years.
“There's growing recognition of the important role that small business plays in the economic vitality of Kansas City, and the City itself has been championing the idea of being America’s most entrepreneurial city,” Serda said. “But at a ground level, I think it really has to do with being an authentic, distinctive and really innovative place with a wide range of diverse businesses that offer unique goods and services.”
Beyond their economic impact, small businesses foster a sense of community while shaping authentic connections with surrounding residents. These connections help establish entrepreneurs as community leaders and foster neighborhood stability.
Driving local economic development and employment opportunities also shows the profound impact of supporting these enterprises. LISC Kansas City aims to continue endorsing the growth of small businesses and removing barriers to capital funding access in Kansas City neighborhoods.
