New program lets poor be the boss Welfare recipients are taught how to start, run a business.

December 09, 1991|By Michelle Singletary | Michelle Singletary,Evening Sun Staff

Linda Felder looks forward to the day when her two sons can join the family business.

She recently opened a small school uniform business in Cherry Hill after receiving a letter from the state inviting her to apply for a new program for would-be entrepreneurs.

After receiving public assistance for 12 years, Felder said, she wanted to build something to pass on to her sons, now 10 and 11.

Henrietta Walker jumped at the chance to open a bail bond service, thinking it was her ticket off the welfare rolls.

Odan Layton is kicking his way into business. He owns and operates a martial arts school on York Road.

And, Lena Vincent has fired up her kiln. She's opened Lena's Pour House, a ceramics shop on South Charles Street. Vincent said she is ready to give up her monthly welfare check, her steady income for the last 12 years, in exchange for being her own boss.

These four entrepreneurs are the first of a corps of people who have started their own businesses with help from Business Owners Start-Up Services of Maryland. It's a pilot program with a mission to help unemployed and welfare recipients become self-sufficient.

One year after the program's inception, there are 73 graduates. Seventeen have launched businesses.

About 80 percent of the participants in the program are women and most are receiving Aid to Families with Dependent Children.

"I was just tired of being on welfare," said Felder, 29, president of Design-N-Sew Inc.

When Felder walked across the stage at her high school graduation in 1979 she was six months pregnant. As a result she turned down a grant to study sewing at a New York college, the name of which she can't remember now.

Felder has taken her talent for sewing and turned it into a small manufacturing venture she operates out of her subsidized apartment. After four months in business, she has a contract to supply school uniforms to Arundel Elementary School.

It's too early to release sales figures, she said. She is still receiving public assistance but in a year if the business is in the black, she will be off welfare and on her own.

"Owning a small business is really the one way to build something from nothing," said John P. Faris, executive director of the Maryland Small Business Development Center Network and project manager for the BOSS program.

BOSS is one of five entrepreneurial training projects nationwide.

Candidates for the program are recruited from the state's Project Independence and other job training programs in the city and county. All that is required is a desire to be one's own boss, and a business idea.

In fiscal year 1991, the state spent $271,000 on the program. For fiscal 1992 the program's budget was trimmed by 13 percent to $236,000 as a result of statewide budget cuts.

A key component to the program is its ability to help the entrepreneurs get start-up capital through private funding. The Abell Foundation has contributed $100,000. The money is being used to make loans to BOSS participants. The Council for Equal Business Opportunity administers the loan fund. Each business owner can apply for a loan for up to $10,000 at market rates.

Participants enroll in a three-month training program.

Those whose businesses don't get off the ground or fail are given assistance in finding employment, Faris said.

Most of the ventures are just a few months old.

Faris said they are projecting that 50 percent of the start-ups will fail.

The program does provide a safety net by granting a one-year waiver that allows the new business owners to continue collecting public assistance. The waiver can be extended for another two years.

Faris said that after the first year they will review the firm's fi

nancial statements every six months. If a business is earning an average $3,000 a month and its asset base is larger than $5,000, the business owner will no longer receive public assistance.

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