Laid off and low-wage workers explore business ownership

DENVER - Rob Smith says it doesn't take much money to start a small business, and some of the people who are best suited to start those businesses are ones who can barely afford to make ends meet.

"If you look at the great economic downturns that we've had... the entrepreneurial spirit has come forth from those time periods," Smith said.

Many of those would-be entrepreneurs have come to the Rocky Mountain MicroFinance Institute, a nonprofit organization that focuses on lending usually small amounts of money to people looking to start a business. Smith serves as the business's executive director.

"We really put people through the ringer in proving to us that their idea is viable and it can actually make money," Smith, who is a former banker and small business manager, said.

Smith says this latest business venture isn't about making large amounts of money. It's about empowering people who often don't make what he calls a "whole paycheck," or enough money to cover all of their expenses.

"This is about building local economies from local people," he said. "So if they do get laid off, they have another form of income that can help them support their monthly expenses."

Karen Megel is one of the business owners who have gotten advice from Smith. She was hurt while working as a roofer and has since found it difficult to get a good-paying job.

"You can sit and feel sorry for yourself or you can grit your teeth and go on," she said.

Megel started her company Alpha Goods and has begun to sell and market an all-natural bug spray called K².

"They have given me resources and information," Megel said of the workers at Rocky Mountain MicroFinance Institute.

The organization can help a business owner get his or her credit established by loaning as little as $100. That loan is usually part of the beginning phases, which Smith calls the "business curious" stage. That stage also includes free business counseling meetings, some being held at Denver Public Library

In what he calls the "business serious" stage, aspiring business owners can borrow up to $20,000 for up to four years at an interest rate of 8 percent to 12 percent. That stage also includes business counseling with prices that begin at $25.

"When they move from our program to other micro-lending programs or credit unions or banks, they can have a knowledgeable conversation with the loan officer about their needs and how it will help their business," Smith said.

A lot of the more than 200 people Smith's business has helped have started up landscaping, jewelry and cleaning businesses.

Successful stories include those that end with new business owners having enough money to cover all of their expenses.

"We see it all the time that the business becomes successful enough to fill that whole paycheck," he said.

Scholarships are available to cover fees associated with business counseling from the non-profit organization. For more information on Rocky Mountain MicroFinance Institute, log onto www.rmmfi.org.