"When I took over the operation in 2008, we had a small customer base and declining revenues year-over-year," she says. "I wanted to learn what the big businesses know that I don't know, so as soon as I learned about the program I went to an orientation meeting."
The opportunity, Goldman Sachs' 10,000 Small Businesses initiative, aims to create jobs and economic growth by providing small businesses with practical tools like business education, support services and access to capital. Goldman Sachs launched the program in Salt Lake City last summer in partnership with GOED and committed $10 million for small business loans and grants and another $5 million for business education through a partnership with Salt Lake Community College.
Kaddas and 32 other small business owners graduated from the program in May, having spent 22 weeks in intensive training where they learned about growth opportunities and strategies, money and metrics, marketing and selling, negotiation, human resources and how to make their businesses "bankable." The program also included one-on-one business advising, accounting workshops and advice from Goldman Sachs professionals.
The training, with an estimated value of between $15,000 to $20,000 per student, is free to business scholars thanks to funding from Goldman Sachs and the Margaret Spellings Foundation. The only catch is that the scholars must commit to attend religiously. Since enrolling in the program, the companies together have added 74 new employees--something the owners attribute to the skills they picked up in the courses. Kaddas says her company has added five new employees and is currently looking for a sixth. She is also in talks with local lenders for a business loan to continue her expansion. Six other business scholars graduating from the course have also obtained financing for their businesses.
By the time the business scholars finish the training modules, they've earned what some call a "mini MBA," says Karen Gunn, associate provost for economic development and business partnerships at Salt Lake Community College and executive director of the Goldman Sachs initiative. "These results are a testament to the strength of the program and its importance as an investment in Utah's small business ecosystem," she notes.
Admission into the program is highly competitive. "It's not like you can just apply and expect to get in," Gunn notes. Eligibility requirements, including stipulations on earnings, have been posted on the Salt Lake Community College web site. The school received 102 applications during the first round of admissions and selected 33 small business owners for participation in the program. The selection committee is currently interviewing business scholars for admission into the second session, which begins in August.
The initiative, Gunn says, helps the scholars take time to work "on" the business, rather than "in" the business. The training also helps make the businesses bankable, so they can obtain additional capital through non-traditional or traditional resources. "Becoming bankable is the missing link for many Utah businesses," she adds. "They may think they just need money, but as they work through the program, they come to a clear understanding of what it means to grow their businesses."
Learning how to make her business bankable was an "A-ha moment" for Kaddas. "My impression was that the bank would only look at your historical financials. I didn't know much about forecasting, which was a critical piece from a banking perspective," she says. "We were always looking at the year we were currently working within. We had written a budget, but we weren't looking at the next big thing."
Viable Growth Plans
Not only do the business owners learn to understand their businesses completely, but they have viable growth plans they can use to apply for loans or seek investors.
"That is a critical piece for success," Gunn says.
The module faculty--experts in marketing, accounting, leadership and growth opportunities--is comprised of local practitioners of small business that work in concert with the program's local lead faculty and lead faculty from Babson College in Massachusetts, which developed the training course. The training is done in a peer-to-peer platform, with students divided into growth groups of six business owners, representing cross sections of industries in the program. For example, the first scholar cohort included companies from manufacturing, hospitality, construction, medical services and IT. Within the growth groups, the scholars often advise each other and act as sounding boards as they go through the program.
"The ecosystem we developed amongst each other was really impressive," Kaddas says. "You feel like your problems are your own, but through the program, you find out your peers have similar issues with customers, employees and marketing." The scholars also receive individual and personalized business advice and mentoring from an assigned and dedicated business advisor, who is a successful serial entrepreneur or successful small business owner, Gunn says.
For example, the scholars receive in-class training on growth opportunities and then an advisor follows up with the scholars at their businesses to see how they can apply what they've learned. With the help of the advisors, the scholars work on projects that help them analyze growth strategies and validate those plans.
"It's not just you sitting away from your business trying to figure out how to bridge the gap," Kaddas explains. "Somebody comes out to your business and assists you in doing that. It was a phenomenal resource I never had before."
Graduating scholars become part of a local and national alumni network with access to peers and business and networking opportunities across the country. An alumni manager continues to work with the scholars, says Gunn, "because they don't have continued one-to-one access to their business advisor, but they still need advice and development help."
The scholars are also connected with a regional Small Business Development Center (SBDC) where they can receive additional guidance and assistance. "The SBDC plays an important role on the front and back ends of the training program," Gunn explains. "The SBDC is critical in helping the alumni manager ensure the scholars implement their business growth plans. We measure metrics at six months, 18 months and 30 months after graduation to see if they have hit their growth objectives and targets."
Not every small business owner will qualify for admittance into the program, but Gunn says those businesses will also be referred to the SBDCs, where they can receive assistance in preparing for future admission into the program.
"Maybe they haven't been in business the required two years, or maybe their annual revenue didn't meet requirements," she explains. "We will work with the businesses, along with our partners at the Salt Lake Chamber, the Utah State Hispanic Chamber and the Pete Suazo Business Center, to help them prepare and keep them in the pipeline."
Gunn notes that 10 applicants for the second session were referred to the SBDC during the first selection process and received business help before applying again. The second cohort of scholars will be selected in July for training that will begin in August. Those selected for the program participate in more than 100 hours of curriculum delivered across 11 sessions at SLCC.
Kaddas liked her experience so much, she has since enrolled her human resources manager in classes at the college. "Having this organized structure, where you can go to an individual and ask, 'Will you help me with this? Have you encountered this situation?' created an environment where you could talk openly about your business challenges. The program definitely exceeded my expectations."
Gunn says Goldman Sachs has funded the training program for five years, but the college is working now on capacity building strategies to ensure that the program continues, either through funding or by integrating it into the school's existing suite of services. "We want to ensure the program continues because of Utah's commitment to growing and sustaining small business as a cornerstone to state economic development," she concludes.
For more information about the Goldman Sachs 10,000 Small Business initiative, visit www.slcc10ksb.com on Salt Lake Community College's website.