Lara Babalola had a solid knowledge of fashion merchandising when she left her job managing an apparel store to set up her own women’s boutique. But she says it didn’t take long for her to realize that starting and operating her own business would be a whole new ballgame.
“It was a big step,” Babalola said. She needed a loan to supplement her own savings to finance the new shop and help in putting together a business plan.
Babalola received both from Open to Business, a program that provides fledgling businesses access to technical assistance as well as small business loans.
Two years after opening Diva’s Ave Boutique, Babalola says her Brooklyn Park store is meeting its sales goals and is heading toward profitability. Her Open to Business adviser told her not to expect a profit right away. “He told me not to get worried if I wasn’t making money right away, that it would take a few years,” she said. “He calmed me down.”
Open to Business has been available for several years to entrepreneurs such as Babalola in Hennepin County and for one year to those in Carver County. Now it has expanded to Dakota County, where it’s being offered by the Metropolitan Consortium of Community Developers (MCCD), a Minneapolis nonprofit, in partnership with county and city community development agencies and several chambers of commerce.
“We really have not gone out and marketed this program, but we get calls from communities that have heard about us, and want to know how to participate,” said Rob Smolund, program director. He said the expansion into Dakota County was an outgrowth of conversations his organization has had with county and some city development officials over the past few years.
City development directors say the program fills an important need for small businesses and start-ups.
“We get contacted on a fairly regular basis by individuals who either have a small business and/or have an idea for one and are looking to take the next step. We can help with the approval process for getting a location, but what we don’t have is technical assistance or loan funds,” said Dave Olson, Lakeville’s director of economic and community development. “Most cities aren’t set up to underwrite or service loans for businesses.”
Those are also the reasons Eagan was interested in the new program, said Development Director Jon Hohenstein.
“We checked with chambers of commerce in the area, and they thought it provided a great opportunity for their members,” Hohenstein said. “We also checked with Dakota Technical College’s small business center to make sure it wasn’t duplicating any of its services, and they told us there was very little overlap.”
In the past 10 years, the program has loaned more than $6.7 million to about 550 entrepreneurs for start-ups or expansion projects.
Smolund said that MCCD last year provided 32 businesses more than $1.5 million in loans and leveraged another $7.7 million in financing from other sources, including banks, community lending partners and owners’ equity.
In Dakota County, the program is being funded with $130,000 from the Dakota County Community Development Agency and 10 partner cities. It will offer loans up to $25,000.
Cities throughout Dakota County have been actively promoting the new program on their websites. “Our role is public awareness and marketing,” Olson said.
Laurie Crow, an Open to Business adviser, said she will have monthly sessions at each city hall where people can drop in to meet with her for advice and guidance on financing options. People also can schedule appointments with her at her office at the Dakota County Community Development Department.
The program also is having a kickoff event from 8 to 9 a.m. Thursday at the Burnsville Performing Arts Center. The event is free and open to the public.
“So far, the reaction I’m getting from people is very positive,” said Crow, who began her round of drop-in sessions earlier this month. “There are a lot of questions, mostly from people who don’t have a business, but have an idea for one.”