Cathie Anderson

Sacramento’s California Capital expands services for small businesses

Clarence Williams of California Capital, right, has quietly expanded the range of services that his nonprofit development corporation offers to get small-business owners the training, counseling and capital they need to grow. Kimberley Jackson, owner of Just Hair Beauty Supply, left, received help from California Capital in the opening of her store.
Clarence Williams of California Capital, right, has quietly expanded the range of services that his nonprofit development corporation offers to get small-business owners the training, counseling and capital they need to grow. Kimberley Jackson, owner of Just Hair Beauty Supply, left, received help from California Capital in the opening of her store. hamezcua@sacbee.com

Not satisfied with adding a Women’s Business Center four years ago, Clarence Williams of California Capital has quietly expanded the range of services that his nonprofit development corporation offers to get small-business owners the training, counseling and capital they need to grow.

Small businesses have a huge impact on the economy, Williams said, but it’s often difficult to find sponsors for the kind of workshops and seminars that will prepare them to snare additional capital when they need it.

In the private sector, small businesses added roughly 64 percent of the new jobs netted between 1993 and 2011. While people think of the Googles, Apples and Microsofts of the world when it comes to the high-tech industry, about 43 percent of jobs in that arena are at small firms.

Just how many small businesses are there? Well, in 2010, only 18,500 U.S. companies had employment rolls with 500 or more employees. There were 27.9 million small businesses that year.

“When many people start (businesses), they think all they need to know is how to count the money and do the finances,” Williams said. “But that’s just not true. Our classes are packed here. You begin to realize that this is what people really need. This is what is scaring … them – a lack of information on insurance, taxes, things like that.”

Before opening its Women’s Business Center in September 2012, California Capital had sporadically offered classes but had mainly focused on offering loan guarantees to businesses that needed capital. It now offers dozens of courses to businesspeople on topics as diverse as how to use social media to cultivate business to federal contracting, from contracting with Caltrans to how to handle payroll and taxes of all kinds.

The classes are crucial, Williams said, because small-business owners often need to expand their skill sets and position their companies to successfully borrow capital, manage that funding effectively and repay loans on time.

Debbie Muramoto, who leads the Women’s Business Center at California Capital, told me that it served 1,536 clients in its first full fiscal year. In its second full fiscal year, that number more than doubled to 3,197.

3,197 The number of businesspeople who took courses at the Women’s Business Center in its last fiscal year

In August 2014, California Capital also secured a contract with the civilian arm of the Department of Defense that allows the nonprofit to employ several counselors who help small businesses clear the hurdles to become federal, state or local government contractors. Mike Schremmer manages this division, known as the Procurement Technical Assistance Center.

“The federal government spends around $90 billion annually with small businesses,” he told me. “We provide one-on-one counseling, training, and assistance at no cost. ... To date, we have assisted over 350 businesses. Our clients have been awarded over $12.8 million in federal, state, and local contracts.”

If a small business wants to realize significant growth, Williams said, it must become a supplier of goods and services to other businesses or government agencies. Those deals bring in multiple millions in revenue, he said, even though the companies often serve fewer direct customers than they would in the business-to-consumer market.

Williams said U.S. Rep. Doris Matsui, D-Sacramento, has played a critical role in helping his nonprofit win federal grants that have allowed it to open the two business centers. When California Capital celebrated the opening of its new offices at 1792 Tribute Road, Suite 270, in Sacramento last month, Matsui emphasized the crucial range of services that the procurement training team would bring to the region.

$26,173,934 The amount of capital that the agency helped business owners access since mid-2012

The California Capital team has found synergy from having procurement, financing, counseling and courses all under one roof. Nearly all of its employees have a story about how they took a tag-team approach to helping a business owner.

“To give you an example, if you come into the Women’s Business Center for a training or class, we may identify you for more classes or we may identify you as a potential recipient for federal, state and local contracts,” Williams said. “We can then send you over to our Procurement Technical Assistance team. They may identify you as someone who may need financing. You could go through our loan guarantee program or our microloan program.”

If no one on Williams’ team can assist the client, the nonprofit calls upon its connections in agencies such as the local office of the U.S. Small Business Administration, the Small Business Development Center run by the SBA, Sacramento Metro Chamber and Sacramento State.

Running the centers isn’t always easy financially, said Williams and Muramoto. California Capital has to fund the programming and wait to be reimbursed. And, although the federal government provides grants to help operate the Women’s Business Center and procurement training, California Capital must match a portion of all of those funds – $136,000 for the women’s center and $160,000 for the procurement training agency last year.

Right now, Williams said, matching funds come from two sources. One is in-kind donations. Virtually all the courses are taught by experts who donate their time, Muramoto said, and the government assigns a value to those hours.

592.25 Hours that business counselors spent assisting businesspeople in 2014-15 fiscal year

The other source of matching funds comes from the money that California Capital makes on its loan guarantees, money that otherwise could be lent for future investments. It’s a little like robbing Peter to pay Paul, Williams said. Small-business people lose out on potential funding but gain knowledge that will help build their capacity to grow.

This isn’t the situation that Williams and Muramoto expected to find themselves in when they applied to run the Women’s Business Center, they said. They expected that a local financial institution would step up and sponsor the courses they offer because the Community Reinvestment Act requires banks to help meet the needs of disadvantaged people in their area.

The Federal Reserve Bank in San Francisco lists California Capital and its two centers as organizations doing the kind of work that meets this need, Williams said, but the organization hasn’t yet secured ongoing sponsorships. Sometimes, people ask Williams why the centers don’t charge a fee for their classes.

The short answer, Williams said, is that any income earned from the classes would first reduce the reimbursement from the federal government, so it wouldn’t allow them to put funds back into their loan programs.

Despite the challenges, Muramoto and Williams continue to look for ways to assist small businesses in the Sacramento region. Earlier this year, for example, the California Capital offices began hosting one-stop-shop meetings for Navy veteran Melissa Washington’s Women Veterans Alliance. Washington said she wanted to hold meetings at California Capital because it’s an environment where her members have been welcomed whether they’re homeless or working for state government.

Muramoto said she learned through Washington that many women don’t consider themselves to be veterans, even though they have served in a military branch. Consequently, they miss out on benefits for education, mortgages and business. Washington, for instance, paid only $1 for her business license because she is a veteran.

“Women veterans are a very, very hard community to identify,” Muramoto said. “If they didn’t serve on the front lines, they don’t identify as veterans. We had to change how we asked the question from ‘Are you a veteran?’ to ‘Have you ever served in the military?’ That way, we can identify veterans much easier.”

On April 15-17, California Capital is partnering with the Women Veterans Alliance to stage the “Unconference” at the McClellan Conference Center at 5411 Luce Ave. in McClellan Park. They are calling it an “Unconference,” the two women said, because although there will be classes, a big goal is just allowing women vets to connect and share their stories.

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