That\u2019s one of the findings in the latest survey<\/a> from GoDaddy\u2019s Venture Forward initiative, which studies the economic impact of microbusinesses on the economy, as well as the attitudes, demographics, and needs of the entrepreneurs behind them. The survey, taken in February 2022, found that only three out of ten microbusiness owners are aware of the existence of local government assistance programs.<\/p>\n\n\n\n
This awareness gap is a huge obstacle for city and local governments that want to strengthen their economies by sparking increased microbusiness activity<\/a>, which has been shown by academics and economists to raise household incomes and lower unemployment. Even the best-designed local economic development programs can\u2019t reach their potential if they only reach a small minority of potential beneficiaries. KAREN MOSSBERGER, A PROFESSOR AT ARIZONA STATE UNIVERSITY AND A VENTURE FORWARD RESEARCH PARTNER<\/p>\n<\/div><\/div>\n<\/div><\/div>\n\n\n\n Karen Mossberger<\/p>\n<\/div><\/div>\n<\/div><\/div>\n\n\n\n Programs can range from classes on marketing, to hosting wine-and-cheese networking mixers, to grants and other forms of financial help. As in all of Venture Forward\u2019s surveys<\/a>, founders cite help with marketing and access to capital as the ways the government could be most helpful. Of the respondents polled, 61% said they needed help<\/a> marketing their business, and 36% said they needed help getting their business online. Of those who actually utilized a local government program, 19% said \u201cnetworking and mentorship\u201d was the number one benefit, 13% cited \u201caccess to financial capital\u201d and 12% cited \u201cskills training.\u201d The survey suggests there is a strong connection between participation in government assistance programs and business success. For instance, 36% of the respondents who had used public programs brought in more than $4,000 a month, but only 28% of those who did not participate reached that threshold. <\/p><\/blockquote>\n\n\n\n There\u2019s no simple explanation for City Hall\u2019s marketing woes, but usually a raft of contributing factors. Here\u2019s a common one: Experts say that most government staffers are hired to design and oversee the best programs, not for their marketing acumen. \u201cThese people tend to do the work, not talk about the work,\u201d says Della Rucker, a Cincinnati-based consultant to economic development programs. Also, they are often constrained by local rules about how to communicate with the public. Sometimes they are limited to sharing news with journalists or advertising in publications, but are prohibited from directly communicating via social media,” says Rucker. <\/p>\n\n\n\n Della Rucker, consultant to economic development programs<\/p>\n<\/div><\/div>\n<\/div>\n<\/div>\n<\/div><\/div>\n\n\n\n <\/p>\n\n\n\n One of the key challenges is to overcome the negative bias some communities have toward government programs. Less than 20% of microbusiness owners feel positively about how their local policies support their businesses, and more than a third of these people say the policies cater to the needs of larger companies. The key to overcoming these challenges is for governments to connect with microbusiness owners in ways they are comfortable with. While there is no cookie-cutter formula to follow, here are five ways: <\/p>\n\n\n\n Microbusinesses are in all segments and strata of the economy, and most founders don\u2019t have time to research government programs. <\/p>\n\n\n\n Find ways to get into the neighborhoods, such as by setting up pop-ups, leaving fliers at high-traffic locations like barber shops and churches, or even going door-to-door. In a recent interview with Venture Forward, Cleveland Mayor Justin Bibb emphasized the importance of \u201cmeeting people and companies where they are, and maintaining that proximity, because that’s how you build trust.\u201d In Salt Lake City, staffers for the Department of Economic Development make 300 site visits a year to small businesses, often meeting entrepreneurs where they live. \u201cYou have to have face-to-face interactions,\u201d says department director Ben Kolendar. \u201cThey\u2019re so busy with the day-to-day of their businesses that you\u2019re not going to get to them otherwise.\u201d <\/p>\n\n\n\n Engage with local economic development organizations and other NGOs: <\/strong>Many government agencies don\u2019t have the manpower for door-to-door canvassing, but every city has advocacy groups that might. In the mostly-Hispanic Allapattah neighborhood of Miami, a group called the Allapattah Collaborative has distributed more than $3 million in grants and loans to local businesses, including many who learned of the programs from a flier on their doorstep or, better yet, a conversation. \u201cGovernments tend to overuse online distribution of information, assuming that if you build it, they will come. That doesn’t happen,\u201d says Francesca Escoto, director of economic development and strategy for the group.<\/p>\n\n\n\n In other words, lean on microbusiness advocates to be your eyes and ears. People like Rucker and Escoto have devoted themselves to understanding and helping first-time business owners. Community development financial institutions (CDFIs), community development corporations (CDCs), small business development centers (SBDCs) all exist to help new businesses get the resources they need. If government staffers don\u2019t have the skinny on who is doing what in town, these organizations may be able to help.<\/p>\n\n\n\n Programs designed for everyone can inadvertently cut out large swaths of potential beneficiaries through simple oversights, like publishing marketing materials and loan applications only in English, says Escoto, who represents a mostly-Spanish speaking neighborhood.<\/p>\n\n\n\n Microbusinesses in Allapattah have a range of programs available to them, but they are promoted by three entities \u2013 one from the City of Miami, another from the city of Miami Beach, and a third by Dade County. Finding a way to speak with one voice would be a great help, especially in an immigrant-heavy neighborhood where people have little experience dealing with government bureaucracy, says Escoto. <\/p>\n\n\n\n Rather than focus on what you can do for microbusinesses, the Brookings Institute<\/a> suggests elevating the conversation to talk about how microbusinesses drive prosperity for everyone. You can use tools such as the Venture Forward Microbusiness Activity Index<\/a> to see how your county stacks up against others. <\/p>\n\n\n\n <\/p>\n\n\n\n The need to close the awareness gap is particularly important right now. Millions of people created microbusinesses during the pandemic, many of them out of necessity as a result of layoffs. For a solitary microbusiness owner trying to figure out the complexities of entrepreneurship, meeting a mentor at a wine-and-cheese mixer at City Hall or receiving a $5,000 or $10,000 grant may make all the difference. <\/p>\n\n\n\n Government programs can be effective, but only if entrepreneurs know about them. Hundreds of cities across the country offer programs […]<\/p>\n","protected":false},"author":15,"featured_media":5458,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[15],"tags":[],"class_list":["post-5434","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-opinion"],"acf":[],"yoast_head":"\n
<\/p>\n\n\n\n
\n<\/div><\/div>\n\n\n\n“More than half of people starting microbusinesses have never started a company before. Most of them work by themselves and may not have the connections to existing business networks that larger businesses have.”<\/h4>\n\n\n\n
\n<\/div><\/div>\n\n\n\n![\"Karen](\"https:\/\/www.godaddy.com\/research\/wp-content\/uploads\/2022\/07\/karen-mossberger-2-1.jpg\")
These microbusiness owners probably don\u2019t go to local chamber of commerce meetings, may not know other successful entrepreneurs and definitely don\u2019t have economic development staff or lawyers who could notify them about helpful programs. <\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n\n\n\n
\n\n\n\n“Governments need to do a better job of reaching beyond the usual channels and deeper into their communities.”<\/h4>\n\n\n\n
\n<\/div><\/div>\n\n\n\n
Just getting the word out about programs has value in itself, even with business owners who choose not to participate. Of those who don\u2019t know about any particular program, only 18% think favorably about the government\u2019s ability to help them. That percentage doubles to 36% for people who know of the existence of a program. Awareness also tamps down negative sentiment about the local government\u2019s potential to help: 30% of those who are unaware of any programs feel negatively about the way their city supports businesses, versus 21% of those who are aware.
<\/p>\n\n\n\n
Mossberger cautions that this may say less about the effectiveness of the programs, and more about these particular owners. Maybe they do more networking, or are more resourceful about finding ways to get ahead. Either way, more engagement with government programs seems to be good for microbusinesses.<\/p>\n\n\n\nWhy is the awareness gap so big?<\/h6>\n\n\n\n
![\"Karen](\"https:\/\/www.godaddy.com\/research\/wp-content\/uploads\/2022\/07\/della-rucker-1.jpg\")
The government staffers\u2019 life experiences are often very different from those of the founders they\u2019re trying to help. \u201cI see people (in local government programs) who are trying like hell to do the right thing,\u201d says Rucker. But those people are often constrained by their organization, a knowledge gap, or other factors, Rucker adds.<\/p>\n\n\n\n
\n<\/div><\/div>\n\n\n\n“If you\u2019ve been working for a local government for 20 years and you\u2019ve never been an entrepreneur, it\u2019s unbelievably hard to get your head into that of an entrepreneur. What do they need? What do they want? Where do you meet them?”<\/h4>\n\n\n\n
\n<\/div><\/div>\n\n\n\nOvercoming Negative Bias <\/h6>\n\n\n\n
These negative sentiments run particularly strongly in underserved communities. \u201cIf you\u2019re Black or you\u2019re an immigrant or part of any other minority population, you probably regard the government with a high level of suspicion,\u201d says Rucker. \u201cI\u2019ve had a lot of people tell me that their personal experience is that the government is not there to help.\u201d<\/p>\n\n\n\n
\n\n\n\nKeys to success<\/h6>\n\n\n\n
1. Go where the entrepreneurs are: <\/h4>\n\n\n\n
![\"Karen](\"https:\/\/www.godaddy.com\/research\/wp-content\/uploads\/2022\/07\/ben-kolendar-1.jpg\")
Salt Lake City\u2019s Kolendar says one of his most valuable outreach activities is serving on the boards of organizations like Suazo Business Center, which helps minority entrepreneurs build businesses, and NeighborWorks Salt Lake, a neighborhood revitalization program. Sitting on these boards yields a double benefit: those organizations\u2019 leaders become ambassadors for the city\u2019s small business programs and spread the word around the community, and it sets up a feedback loop so that Kolendar and his team learn first-hand what microbusiness owners need most. <\/p><\/blockquote>\n\n\n\n2. Consider language and culture:<\/h4>\n\n\n\n
3. Winning local champions is critical: <\/h4>\n\n\n\n
![\"Karen](\"https:\/\/www.godaddy.com\/research\/wp-content\/uploads\/2022\/07\/francesca-escoto.jpg\")
The best marketing for a program usually comes via testimonials of people who have benefitted. Until they hear about people like themselves that have benefitted, most microbusiness owners will cut one more head of hair or make one more delivery rather than giving a program serious consideration. \u201cEvery one of the businesses we helped during the pandemic are still open,\u201d says Escoto. \u201cThat\u2019s built trust in the community, and as a result we have a waiting list for newer programs.\u201d<\/p>\n\n\n\n4. Create one office for microbusiness assistance: <\/h4>\n\n\n\n
5. Raise awareness about the economic impact of microbusinesses: <\/h4>\n\n\n\n
\n\n\n\nConclusion<\/h5>\n\n\n\n
\n\n\n\nTo learn more about how Venture Forward data is being used by economic developers and policymakers read the latest 2022 Summer Report here<\/a>.<\/h4>\n","protected":false},"excerpt":{"rendered":"