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Crowdfunding and creative entrepreneurship: An aging population's economic opportunity
Two business ventures show that with a little creative thinking Minnesota's aging population presents economic opportunity and a chance to provide critical public services. The Recipe restaurant in southwest Minnesota's Westbrook isn't your typical small town cafe. It also relied on a new kind of start up funding to open shop. While a more conventional business, Tidy Tightwads cleaning in Hutchinson is also taking advantage of some unique business opportunities.
The Recipe café was the first Minnesota company to use “crowdfunding” loans from Kiva Zip, a domestic program now offered by the international development group Kiva Microfunds, in tandem with microloan assistance from the Southwest Initiative Foundation’s Microenterprise Loan Program.
Add Lutheran Social Services (LSS) to the list of collaborating partners helping The Recipe café get up and going. The Walnut Grove-based Sentinel Tribune newspaper reported Jan. 16 that The Recipe will cater the Westbrook area’s meals on wheels program and also host the area’s LSS sponsored Diners Club.
By linking with the senior nutrition programs, the Westbrook café will have steady cash flow for basic operations, said Sarah Anderson, a regional LSS official at Windom. “It won’t make (owner Angie Horkey) rich, but it certainly helps a small business to have reliable, steady income.”
These entrepreneurs are leveraging available resources to support creative business plans, said Kurt Thompson, the Southwest Initiative Foundation’s Microenterprise Loan Program officer. This is significant because Hutchinson and Westbrook are similar to rural communities throughout the state, he said.
Diners Clubs are community food and fellowship programs for senior citizens 60 years of age and older. LSS operates 225 senior dining sites in 39 Minnesota counties that are funded by the federal Older Americans Act and administered by the Minnesota Board on Aging and regional councils on aging. About 50 of the sites are established in local restaurants like in Westbrook.
LSS’ purpose is to help seniors live healthy, independent lives. A small donation is recommended, but not necessary if seniors are financially strapped, to secure the senior club cards. In the process, the nutrition programs allow seniors to have social connections in their communities, gain information about senior services and connect with professionals on financial matters and other issues.
The Southwest Initiative Foundation is among the regional community Initiative foundation around the state. It receives funding assistance through the U.S. Small Business Administration and USDA’s Rural Development programs.
SWIF’s Microenterprise Loan Program provides loans up to $50,000 to help entrepreneurs start or expand businesses in 18 counties of southwest Minnesota plus Carver, Stearns and Wright counties.
Thompson said SWIF has made 276 microloans valued at more than $3.2 million, creating or retaining 572 jobs since the program started in 2001. Of the loan recipients, 46 percent are women business owners, 16 percent are minority business owners and nine loans were written to disabled entrepreneurs.
Throughout the region, SWIF’s different loan and grant programs have provided $54 million to assistant businesses and community development, including help for 525 businesses that have created or retained 8,000 jobs in the 18 counties.
An example of how leveraging resources leads to growth comes close to SWIF’s home base in Hutchinson where Cindy Haugland has been expanding her Tidy Tightwads business.
She started as a one-person home and small business cleaning service, she said. Along the way, one of her customers was a carpet cleaner who proposed she buy him out and combine their services. Other customers had handy work needs. These prospects brought Haugland in contact with Thompson who provided SWIF loans and technical assistance for expanding her business.
“Getting set up with regulations for hiring employees isn’t easy, if you haven’t done it,” she said. She now has seven employees, and Tidy Tightwads has expanded to providing home and business cleaning services, carpet cleaning, window washing, “handyman” services and organizing services.
Haugland doesn’t specifically market her services to senior citizens. But like at the Westbrook cafe, seniors make an important customer base because their needs nudged her into expanding her business. “Someone always had a window that needed repair, or something like that,” she said. And organizing is always a problem for seniors who have been in their homes for a long time.
“You don’t have to be a hoarder to have clutter,” she said. The more clutter mess one accumulates adds to difficulties seniors have in keeping up their homes. Her cleaning service provides clutter boxes for customers to toss duplicative or unused items and Tidy Tightwads delivers them to nonprofit groups that recycle the goods.
Communities throughout Minnesota are like Hutchinson and Westbrook. What Haugland and Horkey are proving is that a community’s aging population represents a growth market for creative entrepreneurs and the programs that support them.
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