Rutgers University Helps Entrepreneurs Revitalize Newark

In the past year, Carol Blank and business partner Lorrie Sanchez have seen revenues of their Newark, N.J.-based business jump by more than 150 percent. Their website now attracts more traffic. They’ve reformulated their mission statement, thus clarifying their thinking about what they “do and don’t do.” They’ve schooled themselves in the concept of branding, and, as a result, their materials now look crisper, more focused and more attractive. They also have a much wider network of contacts and a larger pool of potential clients.

They credit the dramatic transformation of their fortunes to the Entrepreneurship Pioneers Initiative (EPI), a nine-month-long educational program targeted to first-generation, small business owners offered through the Rutgers University Center for Urban Entrepreneurship and Economic Development. In its second year, EPI has worked with more than 40 businesses out of an applicant pool of 200.

“Their program dealt with specific areas every month that one would need in starting a business, promoting business, everything that you would need to know,” says Blank, co-owner of Utterly Global, a company that provides anti-bullying programs and services to schools, parents and civic groups.

“There were speakers that dealt with financial things and business plans. We got individual counseling. Also invaluable, we made numerous contacts. The people in the class became like a family. We are still in touch with each other. We also employ each other. I have used the services of other people in the class. The different professors have been very helpful. We’ve been able to reach out to them outside of class time,” Blank says, lauding the center as a great resource for small businesses independent of  the classes.

The initiative is one of many programs offered by the center, an arm of the university’s business college that bills itself as the first program of its kind in the country. The center aims to revitalize Newark and other urban centers in New Jersey by building strong corporate and community partnerships and putting the resources of the university at the disposal of businesses in those urban areas, particularly small businesses. These are tough times for small businesses. From 2005 to 2009, the number of small business bankruptcies rose from 39,200 to 60,800, according to the Office of Advocacy for the Small Business Administration.

The center takes a broad approach to its work. It partners with nonprofits to help them develop ideas to generate more revenue. It works with homeless shelters to help better meet the needs of the destitute, partly because business owners may be reticent about relocating to a city teeming with hundreds of homeless people loitering nearby. It also explores innovations, such as melding art with business to beautify the community.

At the core of these strategies are Rutgers professors, graduate and undergraduate students, who collaborate with various foundations, corporations and governmental entities, including the city of Newark,  which has a poverty rate of about 25 percent and a median household income of $35,000, and other urban centers in New Jersey to improve the fortunes of small businesses and nonprofits. 

“We would like to see Newark turned around, with very low unemployment and have people come to Newark and have people who live in Newark gainfully employed and doing well,” says Dr. dt Ogilvie, an associate professor of business strategy at Rutgers and founding director of the center, of the center’s vision. “We would like to see that replicated throughout the country. If our cities don’t work, our country’s not going to work. We need to have an educated populace in our cities and vibrant businesses in our cities.”

A Rewarding Risk

The center’s flagship laboratory for this urban transformation may well be Halsey Street, a small collection of city blocks within walking distance of downtown Newark. Until a few years ago, the district was the prototypical blighted neighborhood of abandoned and vacant buildings. 

“When I first came here you were taking your life into your hands,” says Peter Learmont, who has owned a small printing and publishing firm in the Halsey district for 15 years. “Things really started to change two or three years ago with the entrepreneurship program, with micro loans and with classes for small business owners.”

Working with the city, with foundations and lenders, the center has helped attract businesses to the Halsey district.

“We targeted it because it is close to the campus,” says Dr. Jeffrey Robinson, the center’s assistant director and an assistant professor of management and entrepreneurship at Rutgers. “At the same time the city realized what we were doing and said they want to designate two blocks (within the Halsey district) as a demonstration area. We were meeting weekly at one point with officials. We provided the businesses that opened up technical assistance. We assisted foundations that wanted to put money into (selected) businesses. There are three businesses up and running on the streets because of those efforts. That added to the three already there. That has created momentum as three more businesses opened.”

Learmont credits the center with helping him get a small loan to buy some key equipment. Since purchasing that equipment, he says, his revenue soared by more than 30 percent.

Robinson says at the core of the center’s mission are three areas:  research, teaching and economic development.

The relationship with the businesses in the EPI, who pay a $200 fee, doesn’t end when they complete their nine months of training, Robinson says.

“We are following up with all of them,” he says. “One of my colleagues conducted surveys of their social networks to see how those networks changed. We are also tracking from a research perspective. We will follow them for four years from a research perspective. The academic survey part is looking at what changed. We don’t just drop them completely.”

Much of the teaching and economic development comes in the form of the classes developed and taught by professors at the center. The university’s business college now offers an entrepreneurship concentration for MBA students and a minor in entrepreneurship studies for undergraduates. Robinson says an entrepreneurship studies major is being proposed for the fall.

From time to time, Robinson assigns students from his urban entrepreneurship course to work with business owners in EPI. The students work with them on their business and marketing plans. In one case, the guidance of the students helped a business owner land a $60,000 contract.

Robinson says the center’s wide-ranging approach to helping businesses extends to nonprofits as well. He says students from his Social Entrepreneurship, Social Business and Venture Philanthropy courses are working with the local Goodwill store in Newark to improve its revenues. The new manager of the store has plans to set up a coffee shop inside the retail space that would sell high-quality coffee made by the people who receive Goodwill services.

“The revenues from that business would go into the debt they have to retire and the structure they want to renovate so they can help more people,” says Robinson, adding that his class is also exploring with Goodwill the best course for an unused parking lot that could generate considerable revenue.

“Should you lease it out or run it yourself?” says Robinson. “That’s using business to address social problems. That’s using technologies of business to support worthy causes.”

Dr. Arturo Osorio-Fernandez, another faculty member affiliated with the center, is attempting to inaugurate a novel idea that blends art and commerce.

In one aspect of his proposal, local artists would have their works exhibited and sold on the premises of the business college. The exhibited works would attract visitors and bring awareness of the city, says Osorio-Fernandez, an assistant professor of entrepreneurship.

“By opening these exhibits we raise the level of awareness and bring social consciousness to the workplace,” he says. “It opens a lens into the community. It brings the local voice into the university. The university stops being an ivory tower and becomes an integral part of the community. For many people art is an opportunity to bring people to the city, to buy art, to spend dollars in the local community, to start a conversation about who we are and who we want to become.”

Scott Butler, a graduate of EPI and proprietor of the Box Butler, a storage company, says the methods employed by Rutgers could be a blueprint for economic success for the rest of the country.

“Fifty percent of new jobs are coming from small businesses,” he says, adding that the center was instrumental in helping him get a loan that has boosted his revenues. “Small businesses are adding about 80 percent of net new jobs. What Rutgers is doing is just so smart and just so important. I have added over 15 jobs in the past year. They are primarily New Jersey-based residents. Part of this was a result of program and partnerships. The only way to get out of this slump is by supporting small businesses. Without the program, the loan and partnerships, I would not be in the position that I’m in right now.”