When Juan Gonzalez decided to open a specialty grocery store in Portland, Maine, seven years ago, he thought he had an extra burden to overcome. "When you come from another country," says Gonzalez, who came from the Dominican Republic in 1991 when he was 22, "nobody trusts you. It is very difficult to get a loan."
But Gonzalez not only got a $15,000 loan, he also received help writing a business plan and finding coolers, refrigerators, and deals with wholesalers. That coaching helped his store grow from 200 square feet in 1997 to 1,500 square feet today -- including a popular restaurant that made its debut in July. It may not seem obvious that a city in Maine, one of the least diverse states in the nation, would be ideal for a Latino-centered ethnic food store, but Gonzalez says La Bodega Latina and Portland are the perfect match -- thanks mostly to StartSmart, a program run by a local not-for-profit economic development agency called Coastal Enterprises. In fact, says Gonzalez, who settled in Portland after a five-year Navy stint that ended with a tour of duty in Brunswick, Maine, "I wouldn't be in business without them."
La Bodega Latina was StartSmart's very first business to open. The program, which offers classes in entrepreneurship, one-on-one coaching, and start-up loans to immigrants and refugees, now has 72 businesses to its credit. It was founded in 1997 at a time when Maine saw a dramatic increase in its population of refugees (more than 4,000) and legal immigrants (more than 7,000). "For Maine," says Ellen Golden, senior development officer and manager of business development services at Coastal Enterprises, "this population was quite noticeable since we are not a diverse state." She had developed and worked in other Coastal programs to help low income populations start small businesses. In the early '90s, she concluded it was time to develop a specific program for immigrants and refugees.
They were coming from more than 50 nations around the world. Some had been doctors and nurses in their native countries. Others were small-business owners. But before StartSmart, their futures in Maine were largely limited to working at one of several seafood plants or at Barber Foods, a chicken processing plant. "It was one of the few places where refugees with limited English could find good paying jobs," says Jann Yankauskas, the StartSmart coordinator from its inception until this past August. "But processing chicken isn't everybody's dream."
Today, 349 refugees and immigrants from 43 nations have been through StartSmart's classes or coaching. Thirty percent of them have started businesses, and 70% of those start-ups are still in operation. You can see signs of the change throughout Portland. On Saturday mornings downtown, for example, there's a gathering of Somalian men playing dominoes and swapping stories at Amei Halal, a Somalian grocery store. Down the street, there's another grocery store selling Southeast Asian foods and offering cooking classes to a group of nonimmigrant Mainers. Both are StartSmart businesses.
StartSmart entrepreneurs, particularly those from Russia and some African nations, often come to counselors with one question: "How much should I pay the government for a permit for my business?"
They are not asking about legal permit fees. They are thinking there must be some kind of payoff required to run a business. Yankauskas says she's learned it must be clearly stated in StartSmart classes: Do not offer government officials money. Many immigrants come with the right skills, a strong work ethic, and the will to succeed, but their lack of understanding of American business culture can undermine their success. "There are people who come in and say, 'Can you help us start a goat meat plant?" says Yankauskas. "My job is to say, 'Okay, if you sell goat meat it has to be killed in a USDA-certified slaughterhouse. Then it has to be transported safely. And when you sell it, you have to maintain it at certain temperatures."
StartSmart also helps with all other aspects of launching a business. When Le Vo opened Style 29, a beauty salon in downtown Portland, StartSmart got her a $17,000 loan, found the building, negotiated the lease, and helped work out conflicts with the landlord over plumbing problems. This was crucial because Vo, a Vietnamese immigrant, struggles with English. Early on, StartSmart centered the program on its classes. But eventually the administrators saw that most immigrant entrepreneurs needed more one-on-one coaching. "The classes were not reaping starts," says Yankauskas. "In the beginning, we tried to have classes with people from Eastern Europe and Africa, and it was really difficult because they had different learning styles and communication styles. The Africans just wanted to talk and think out loud, and the Eastern Europeans came from a culture where the teacher was the expert. They wanted step-by-step instruction. So it was not working to have the joint groups. It was actually the one-to-one counseling that we did after those classes that really helped people move to a start or an expansion."
The program still offers classes but most advice is now given individually. One common lesson that is taught across cultural lines: No one ethnic group can support a business in Maine. It is a nuanced lesson since some businesses start with very strong support from their own ethnic groups. But these entrepreneurs must learn not to be entrapped by their niches. Juan Gonzalez, owner of La Bodega Latina, conducted surveys with customers during his first year to learn what items were missing from their daily grocery-store buying experiences. After the surveys, he decided to add African and Asian food and also created a strong selection of traditional American brands.
With a $25,000 StartSmart loan and $1,700 in savings, Florence Olebe, a Sudanese refugee, opened Ezo African Restaurant -- and hit upon a key marketing strategy. She volunteered to teach cooking in the local public schools. "It was a big hit," says Yankauskas. "It was a way to introduce the culture and make people comfortable with it." Kids told their parents, and after six months in business, Olebe had lines for lunch and dinner. "We grew fast," she says. Too fast. She could seat only 35, and after three years, she decided to close down until she can find a cook and a bigger space, something StartSmart is helping with. In the meantime, she runs a catering business.
Olebe is typical of many StartSmart entrepreneurs who come to Portland with strong skills. In Sudan, she coordinated a children's program for UNICEF and owned a crafts store. But she knew she would have to find a way out the day two of her seven sons were kidnapped by government security police. The government had started rounding up young men to train them to fight insurgents in the southern part of the country. Olebe bribed an officer with $500 to free them and she sent her three oldest to Egypt to live with relatives. (The next year, she sent the other four.)
By 1998, police suspected that she had ties to a coup plot and searched her home. "I wasn't involved," she says, "and they didn't find anything." But she was still taken to jail for a week. Once free, she bribed a security officer at the airport so she could get on a flight to Egypt. There she applied for asylum to the U.S. and was granted refugee status.
These days, Olebe is optimistic about finding a new location for the restaurant. After all, she says, the troubles with her business do not compare to what she faced in Sudan. Meanwhile, even with the restaurant closed, she has continued to repay her loan -- which is another way in which Olebe is typical. Since 1997, StartSmart has loaned $405,725 to 23 entrepreneurs and has incurred only one default. Says John Scribner, a StartSmart business counselor, "I do not know of a bank that could match that record."
Owner, Revival Carpentry
Background: In 1999, when war erupted in Congo, Bizimungu fled to a refugee camp in Cameroon. He came to the United States through a refugee resettlement program in 2000. Start-up: Bizimungu started Revival in January to design, construct, and repair furniture. He currently supplies bat, owl, and bird houses to Mill Stores, a New England chain of furniture stores. StartSmart is helping him build a website so he can advertise his beds, bookshelves, and cabinets to the public. "I think the business will really grow then," he says. Eventually he hopes to open his own furniture store.
Owner, Bogusha's Deli and Restaurant
Background: Pawlaczyck fled Poland, where she was a physical therapist, because of political repression in 1986. Her family had strong ties to the Solidarity movement. Start-up: During her first years in Portland, when she worked as a nurse's assistant, Pawlaczyck made the six-hour drive to Manhattan once a month to buy 50 loaves of Polish bread. "America is a free country and you can do everything you want here," she says. "What was missing was Polish bread." Pawlaczyck saw a business opportunity when she discovered other immigrants making the same long trip for food from home. She mortgaged her house in 1996 and used the $30,000 to open Bogusha's, which started as a deli and grew into a restaurant. She knew nothing about running a business, let alone a food store. StartSmart helped her establish a budget, find equipment, and get the right licenses. She now has two employees and revenue of $140,000 a year.
Owner, Mitpheap Asian Market
Background: Ker remembers little about Cambodia, but his parents often share stories. His father was a teacher forced by the Khmer Rouge to work in the rice fields. When Rainsey was six, the family moved to France as part of a program resettling Cambodians in other countries. When he was a senior in high school, the family relocated to Portland. Start-up: Mitpheap, which carries Asian, African, and Hispanic foods, opened in 2002. It moved from a 1,000-square-foot location to a 3,000-square-foot store last January. StartSmart gave Ker a $21,000 loan, and its counselors helped him write a business plan. He now has two employees and expects revenue of $500,000 this year. He's also working part-time as a real estate agent with the hope of opening his own agency. Why real estate? "The person who I admire, what's his name? I forgot. He has a show on TV, The Apprentice."
Co-owner, Maine State Interpreters
Background: Hersi was a surgeon in Somalia. He fled in 1991 when war tore through his country. Start-up: Hersi, who speaks four languages -- Somali, Arabic, Russian, and English -- started his translation service in November 2003. His clients include hospitals, doctor's offices, and courtrooms. StartSmart designed his brochures and business cards, helped him set rates, found him office space, and negotiated his lease: "This would not have happened without them," Hersi says.
Owner, A-Z Wood Floor Sanding
Background: Luu's mother was Vietnamese, his father an American soldier he never met. He emigrated in 1992 when he was 22. Start-up: Luu was working for a carpenter in Philadelphia when he got a call from a stepbrother who'd heard about StartSmart. His brother talked him into starting his own floor-sanding business, which he did in 1998 with $15,000 in savings and loans from his family. StartSmart did all his advertising in the beginning to help him find his first customers. Still, business has been tough because of the language barrier. StartSmart advised him to find someone fluent in English to answer the phones and set up jobs. He now has two employees and expects to have revenue this year of $80,000.
David J. Dent wrote about political access in the September Inc.