Gulf Coast Small Business Collaborative

We are building out a small business ecosystem to support small businesses and connect business service organizations. across our 13-county region. The tool will help small businesses connect to needed resources, such as access to capital, procurement opportunities, technical assistance, tax and accounting services, workforce development, marketing, and legal support, to name a few. Additionally, the tool will help business service organizations track referrals to other support organizations, leverage resources, promote events and opportunities, capture small business data, and improve outcomes. The tool will be developed through a human-centered design approach that will incorporate design and testing by small businesses as well as business service organizations while also being developed by technology companies that have received assistance through our business service organizations.

The Gulf Coast Economic Development District (GCEDD) has led a collaborative effort of 15 business service organizations across the 13-county Gulf Coast region of Texas. These organizations include the City of Houston’s Office of Business Opportunity, the US Small Business Development Center (SBDC), the Service Corps of Retired Executives (SCORE), Local Initiatives Support Corporation (LISC), the Houston Area Urban League, the public workforce system, and other partners who provide entrepreneurship, small business lending, and technical assistance services. We recognized that there is redundancy among our programs and that we are not doing an effective job of leveraging resources and improving system efficiencies that would lead to better outcomes for our shared small business community. As a result, we formed our small business collaborative to build a transformative ecosystem that would support small businesses through a technology-based interface that would not only amplify the reach and impact of our business service organizations, but also give small businesses a level of coordinated access, support, and resources that is currently unavailable to them.  

The technology tool that we will develop will bridge data, information, and resources across multiple business service organizations in a seamless online platform with potential mobile application extensions. The challenge for most small businesses and entrepreneurs is locating free and/ or low-cost resources to help them start, grow, and sustain their businesses. Many businesses use search engines to locate information and either have a difficult time finding what they need, understanding it, or simply navigating through the sea of business service resources. Our tool will be a one-stop shop to help businesses understand everything about starting and growing their businesses, from registering their business with the Secretary of State, to determining the business corporate structure, to scaling their operations. Additionally, these businesses will have opportunities to connect directly with mentors, coaches, and advisors in a way that is customized to fit the individual small business’ needs. Small businesses will continue to be able to access services from our business service organizations through traditional in-person formats. However, the technology tool will enable small businesses to engage online through self-paced, one-on-one coaching, or group session formats while also benefiting from shared learning, networking, and collaborative experiences with other small businesses through virtual communities of practice. 

We are looking to serve the small business community of the Greater Houston Area.  The Houston MSA has a very diverse population of business owners. The Houston MSA population, as of July 2022, is 7.3 million people. Of that population, 66% of the population is a minority race or ethnicity, including Hispanic, African American/ Black, Asian, or other races. 82% of the businesses operating in Houston, employ less than 20 people, making up 44% of the region's workforce.  

Small business owners face many issues during operations. According to the Small Business Administration, 50% of small businesses fail within the first 5 years of opening. Challenges such as lack of access to capital, lack of strong business acumen, lack of business resources/technical assistance, and lack of scaling are just a few reasons many businesses fail.

Small business owners often rely on the success of their business to maintain their livelihood. Minority owned businesses have a higher risk of failing. Culturally, they are also the community anchor that maintain strong relationships with community members and serve as the backbone foundation within low to moderate income communities.  Unfortunately, about 8 out of 10 black owned small businesses fail in the first 18 months of operation which creates more inequality due to debt and lower credit scores resulting in weaker communities overall.

Our technology solution will create a path towards equity and access for any business, including minority and women owned businesses, that have not had the same opportunities to start and grow their businesses. Our small business service organizations currently provide services to this population and will translate these services into a virtual space that will be easily accessible for any businesses needing those resources. 

We are creating the business service tool to allow for the business organizations to track thousands of small businesses as they grow from infancy stage to maturity, while also providing business support and technical assistance from startup to growth and expansion.  The tool will allow small business owners to achieve access to capital, business certifications (including MBE), procurement opportunities, venture capital opportunities, workforce training, networking, technical assistance, and resources, while reducing duplicated efforts and funds from business support organizations to create a stronger small business ecosystem.

The way the tool will work is by uniting business support organizations through a coordinated services approach. When a business owner meets with one of our partners, the partner will introduce the tool as a service resource. The tool will work as a hub for support organizations to track business referrals, business plans, programs, capital gain, and different business opportunities i.e. pitch competitions, venture capital, procurement opportunities. It will connect businesses to business experts in many of the focus areas.

Business owners will start by taking a business health assessment that will rate their current state of business. They will then be prompted to resources provided by different organizations based on their results.  As they complete their work with an organization, they can move on to different resources and organizations as the tool tracks their completion and growth. The tool will directly align to multiple focus concepts including, financial readiness, business development and procurement, business scaling, internal financial health, and data and impact.

Leveraging evidenced-based data from the Small Business Administration and the Houston-Galveston Area Council, we know that nearly 1 in 5 small businesses fail within their first year of operation and 50% fail within 5 years. Our Theory of Change is focused around producing long-term outcomes of more successful businesses, more job opportunities, better wages, and larger economic output for the Greater Houston 13-County Gulf Coast region of Texas.

Activities:

To accomplish this, we begin with the continued development, collaboration, and thought leadership provided by our small business collaborative. We also develop a technology solution that will help small businesses connect to resources that will help them start, grow, and thrive.

Outputs:

We will deliver services through our small business collaborative organizations and extended ecosystem of small business resource organizations. The service delivery model will allow for coordinated services across organizations which will take place through traditional means and through the technology solution.

Short-Term Goals

The technology solution will help businesses more readily connect to important resources to help them succeed and remain viable. The solution will also help business service organizations keep track of referrals and key performance metrics to gauge the impact of the solution.

Medium-Term Goals

Through the coordinated services of the ecosystem’s technology solution, businesses will retain more customers and increase profits enabling them to grow and expand. Having more successful businesses will lead to greater competition for quality talent and drive higher wages. The increased number of businesses, greater profits, higher wages, and more taxes will lead to strong economic activity.

Long-Term Goals

Ultimately, the technology solution will lead to more successful businesses, more and better job opportunities, and greater economic output as measured by the region’s gross domestic product, which currently stands at $500 billion and ranks 7th in the nation. However, this is largely contingent upon the oil & gas industry. Our region needs to diversify its industries and bolster our small business community in order maintain and expand our regional economy.

The Gulf Coast Economic Development District currently has an active loan portfolio of 129 businesses: 97 businesses have received technical assistance and financing, 32 businesses that are receiving technical assistance and hope to receive financing soon. Based on our business development plan and current activity, we expect to begin assisting at least 25 additional businesses over the next year and hope to increase that number each year with the help of our new tool. With our conservative estimates, we will be serving 154 businesses in one year and 254 in five years.

This number will grow not only due to our ability to assist more businesses directly by utilizing the technology tool, but also because we will be able to leverage our network of business resource partners and can 15x our impact on the business community. In fact, the Small Business Collaborative collectively serves thousands of businesses annually. However, due to lack of shared technology resources, service delivery data and outcome information is limited. The technology tool will not only scale the number of businesses being served across the ecosystem, but it will demonstrate proof of concept and return on investment through the success of our small business customers. 

The community we serve is made up of a diverse population of business owners across urban, suburban, and rural areas. As a small business collaborative, we can pull expertise across our organizations and lean on them to continuously enhance our organizational strategy to reach our communities. Employees lead the discussion based on each one’s professional experience and remain sure-footed by relying on Board-approved strategic plans. Although Boards vary across the small business collaborative, the GCEDD has a Board composed of staff from the various local governments in our region. We also engage local community members and local businesses at quarterly Board of Directors meetings where we provide updates on business activity and listen to leaders from various key industries discuss their current state of affairs. We vary industries each quarter to stay abreast of the region’s market and know how economic development is being impacted. 

We have built trust within the community by being caring experts. Not only do we want to assist them with our business resources and expertise, but we also care about their success and want to make sure they have utilized every tool that is at their disposal. We perform outreach across our vast region by utilizing LinkedIn, Facebook, and Instagram. We use eblasts to communicate with our list of businesses and continuously share funding opportunities or other new developments. We are also dedicated to taking a grassroots approach and attend events across the region and seek opportunities to host workshops by soliciting our services to elected officials and their staff. It’s important to reach all communities and important to care about their wellbeing. Combining digital and in-person outreach methods allows us to do this in an efficient and effective way.

Our impact will be graded based on jobs created, business growth, business income, successful procurement opportunities achieved, and increased business revenue and profit.  The goal for the current year is to create the tool and to market the collaborative to the Houston region.

The goal over the next 5 years is to track the data of businesses helped through the tool.  We will rate the advancement of the businesses through the different stages of a business life cycle and provide wraparound support and technical assistance between the different stages. The impact will continue to be graded by the Gulf Coast Economic Development District and the Economic Development Administration in biannual reports.

Successful impact will establish a strong foundation for small businesses to grow and new businesses to start.  It will also create new job opportunities for workers in the communities in which those businesses operate. In the long run, the technology tool will be a catalyst that drives economic empowerment and produces strong economic output as measured through the region’s Gross Domestic Product (GDP).

We are applying because we believe the Truist Foundation will invest the time and resources it takes to make the small business communities within our 13-county region better. We believe that the Truist Foundation will provide us with the tools necessary to improve our continuous work of serving as an instrument to small businesses within our region to help them grow, scale, thrive.

A partnership with Truist Foundation and MIT Solve can bring added value to our region in the following ways:

• Synergism of Expertise: The GCEDD possesses knowledge about local economies, workforce development, and community needs. A partnership with the Truist Foundation and MIT Solve can bring expertise in technology solutions, innovation, and digital transformation. Combining these strengths could lead to innovative strategies that can address economic challenges through technology-driven solutions.
• Enhanced Services for Small Businesses: The GCEDD and our small business collaborative can offer small businesses access to tech tools, resources, and training through partnership with the Truist Foundation and MIT Solve, which can include digital marketing assistance, e-commerce setup, and technology adoption to improve a business’ competitive advantage. 
• Entrepreneurship and Innovation: With the Truist Foundation and MIT Solve’s focus on fostering entrepreneurship and innovation, and in partnership with the GCEDD and our small business collaborative, we can support the growth of startups and tech-based businesses, which in turn can lead to job creation and economic diversification.

Data-Driven Decision-Making

The Truist Foundation and MIT Solve can assist the GCEDD and our small business collaborative in collecting, analyzing, and interpreting data to make informed decisions about resource allocation, reinvestment opportunities, and growth strategies.

Access to Funding

Both the Truist Foundation and MIT have connections with tech-focused grant program opportunities. A partnership with both organizations can help the GCEDD secure funding for our technology solution and additional tech-driven initiatives, such as the establishment of a technology hub. With MIT’s operation of innovation hubs, partnering with the GCEDD can further facilitate the establishment of such hubs and foster an ecosystem for tech-driven startups and entrepreneurs.

Capacity Building

Leveraging MIT Solve’s expertise in building and launching digital platforms, we would integrate best practices and lessons learned to inform the branding, marketing, and rollout of our technology tool. The Truist Foundation has funded community initiatives for many years and we would rely on this expertise to help us continue developing our small business ecosystem and and ensure that we are effectively evaluating its impact on our region.