As editors at Rutgers University’s student newspaper, Rohan Mathew and Joe Shure witnessed the challenges everyday workers faced in New Brunswick, N.J.
“Steady jobs were scarce, a large immigrant community struggled to get bank accounts and business loans, and nearly a third of households lived below the poverty line,” said Shure. “We got to thinking what we, as a couple of college students, could do about all this.”
Shure understood that he and his friend couldn’t build factories or increase employees’ work hours, so they found a way to help inexperienced entrepreneurs build their businesses and create jobs—a method Shure describes as developing the economy from the ground up.
Behold… The Intersect Fund, a non-profit organization dedicated to serving the needs of low-income entrepreneurs in New Jersey.
Recruiter.com received the chance to sit down with Shure, co-founder and associate director of The Intersect Fund. Since its inception in 2008, the nonprofit has assisted around 500 people throughout the state with loans and training to coaching or other types of business development services. Read on to see what Shure had to say about the unique organization and discover tips and advice to help start your entrepreneurial dreams:
- The Intersect Fund is a student-run nonprofit. How did students initially become involved?
We began hosting business-training classes and raised money for a loan fund. Following the example of successful microfinance efforts abroad, we lent money to people who banks generally ignore. To date, we have maintained an almost perfect repayment rate.
Rohan and I have been working full time at the Intersect Fund since we graduated from Rutgers in 2009 and are now part of a staff of six full-time employees. We’re encouraged by the fact that students throughout the country are starting microbusiness development groups of their own.
To aid their efforts, we helped found the Campus Microfinance Alliance, whose internship programs and annual summits are training students we think will someday lead our industry.
- Does the nonprofit focus on specific businesses e.g. retail, hospitality, food and beverage, or can anyone seeking to become an entrepreneur work with The Intersect Fund?
The Intersect Fund serves entrepreneurs in a range of fields. Some of the most common industries from which our clients come are food service, personal care and property maintenance, but we have also worked with folks who do things like glass-blowing and coffee-roasting.
Basically, if you have a strong business or good idea, and you’re willing to work hard to grow it, we’re here to help.
- Does the nonprofit only work with “low income” workers or potential entrepreneurs?
If you want to find the ideas that will turn the United States economy around, you have to look further than Ivy League campuses and corporate boardrooms.
You have to look at main street business owners who are creating jobs in their communities. You have to look at the guy who works as a handyman on nights and weekends, earning extra money for his family.
And you have to remember that not everyone has access to big bank loans or expensive consultants; thousands of business owners close up shop each year for lack of capital or management savvy.
The Intersect Fund’s goal is to bring about a society in which an entrepreneur’s potential hinges on her talent and drive, not on her race, gender, origin or income bracket.
- What are the most common challenges entrepreneurs face? What obstacles did you two encounter when starting the nonprofit?
Managing money proves challenging for a lot of entrepreneurs. They focus entirely on getting sales — which is understandable — but fail to think about how much their product costs them to make or the ways in which their overhead costs eat into their profits. They work all the time and wonder why they’re not making any money. Understanding basic financial statements and finding a part-time bookkeeping goes a long way toward addressing this issue.
Getting loans to expand is also a challenge. Lenders care mostly about capacity and credit: that is, can the loan applicant afford to make monthly payments and does his credit history suggest he can be trusted with a loan. To assess capacity, we look at an applicant’s monthly budget and financial records (to the extent they have such records). For applicants with poor credit, we offer special credit-builder loans designed to freshen up their credit reports and increase their FICO scores.
Virtually everyone knows that having a good credit score is important, but a surprising number of clients with whom we come in contact have given up on building theirs. They assume it’s terrible and that there’s nothing they can do about it. They fail to realize their hopelessness is costly: the Credit Builders Alliance estimates having a good credit score can save a household approximately $250,000 in lowered interest rates over the course of a lifetime.
- How important is the role of small business in today’s economy?
Small businesses play a crucial role in the U.S. economy. The Washington, D.C.-based Association for Enterprise Opportunity has found that if one in three microbusinesses (firms with five or fewer employees) added just one job each, the U.S. would achieve full employment.
- Will The Intersect Fund expand from its New Brunswick location in the future?
The Intersect Fund serves microbusinesses — that is, firms that have five or fewer employees and need less than $50,000 of start-up capital to launch. Approximately 25 million of these businesses operate in the United States today, but many of them struggle to gain the capital and technical assistance they need.
The Intersect Fund seeks to meet these businesses’ needs. We recently expanded our operations throughout our home state of New Jersey, and in the coming years we plan to lend throughout the United States.
- What advice would you give to those who desire to become a small business owner?
The first thing an aspiring business owner should do is sell something.
This advice sounds obvious, but too few would-be entrepreneurs take it to heart. Instead, they spend years daydreaming, they tinker away on a business plan, they troll around futilely seeking investments or loans, or they engage in any number of activities that — in reality — bring them no closer to building an actual business.
People who want to start businesses should come up with the useful thing they seek to offer, and start delivering it in exchange for money. The first version of their projects may be slightly flawed or more austere than what they eventually hope to produce, but that’s part of the process. Customer feedback is a crucial ingredient in improving a product or service.