A Cooperative Business Model That Works

By Nancy Harmon

The angular structure of the South Valley Economic Development Center (SVEDC) stands out against the vivid blue Albuquerque sky. Located in the South Valley of Albuquerque, a traditionally poor and Hispanic section of the city (see our last blog article), the SVEDC’s new building has a bright, modern design. Together with the flamboyantly colorful mural celebrating valley agriculture that greets visitors, that design signals that this part of the city has been feeling optimistic about its future. Denise and I, as part of our “good news Albuquerque” efforts, set out to discover what it was that was inspiring that optimism. We made two visits and interviewed the director, Josue Olivares.

1 Josue Olivares

Josue Olivares

SVEDC has evolved over several decades from an organization designed to tackle local challenges—such as drainage in the South Valley—to one with the role of economic catalyst for the community, a role that is now extending into the county and the state. Its strategy for growth is a community-centered one that began with Josue, the new director, who came from Monterrey, Mexico. To get things going, he walked the streets of the South Valley, talking with more than 80 people about what they thought the community needed. 2From there, SVEDC programs grew from one new client a year to 75, with a waiting list of more.

To Be, To Build, To Give

The motto of SVEDC is: “To Be, To Build, To Give.” In order to make that happen, they have a well-planned program, whose purpose is to revitalize the economy of the community through supporting and nurturing small-business entrepreneurs. The program comprises three steps.

The first step is called Virtual Incubation, which is a program to help selected entrepreneurs verify a viable business model. To begin, entrepreneurs fill out a comprehensive assessment, through which their skill level is assessed by trained staff members. Each individual is charged an $80 fee for the assessment and evaluation, although prospective low-income entrepreneurs are subsidized for half of that. The goal is to empower people with sound entrepreneurial ideas with the self-confidence and skills to carry them to success.3

Once an entrepreneur’s skill level has been evaluated, he or she is channeled into different programs in order to reach competency in skills such as marketing, accounting, food safety, or distribution. There are different milestones that each individual must achieve before graduating to another skill level.

At the second step, entrepreneurs apply for registrations and permits and fine-tune their business plans. They continue to be guided by business consultants, who aid them in their training. Through all these steps, they can use computers and printers, meeting rooms, copy machines, and other equipment at the SVEDC site.

The Mixing Bowl

One of the most popular programs at SVEDC is a food-industry business incubation program called the Mixing Bowl, a third-step program. The SVEDC building houses one of the largest commercial kitchens in the country. Currently there are 40 Mixing Bowl entrepreneurs, who are at different levels of their training. Different niches in the food industry are represented, ranging from potential caterers to food truck operators, coffee shop owners, vendors at farmer’s markets, and future restaurateurs. Their ideas range from grandma’s salsa recipe to farm-to-table products. Participants pay a $25 membership fee and reasonable usage fees for the equipment in the commercial kitchen. 4 industrial kitchen.JPG

A professional food consultant assists and advises the entrepreneurs through all the milestones of their development. Typically it takes two to eight months to reach the third step, but since many of the clients have full-time jobs and families, it may take a little longer.

Graduating from the Mixing Bowl program may take up to five years, because product development is a lengthy process. Health inspectors regularly make inspections, and it’s not unusual to have to go back to square one in the development of a food item. The cost of the Mixing Bowl program is subsidized at 50% the first year but only 10% the fifth year, motivating the move to independence. Once the entrepreneurs are finished with the program, they are well on their way to entrepreneurial success—without heavy debt to burden their future success. Examples of success that can be seen all over the state—and nationally in some cases—include Heidi’s raspberry products, the New Mexico Pie Company, and Jardines de Moctezuma, a small farm that now sells its products from a storefront. 5 Heidi's jam

SVEDC businesses will soon have a downtown store to showcase their products and are moving ahead into e-commerce. SVEDC support and expertise in packaging and distribution have been crucial as these businesses grow.

A Supportive Business Community

SVEDC has an expensive mission, but it doesn’t have a huge budget. While it gets support from the Kellogg Foundation and the McCune Foundation, it has had to be innovative with staffing to keep costs low. Josue decided to approach business and nonprofit leaders to ask them to volunteer one or two hours a week to mentor these new entrepreneurs. These leaders have been so enthusiastic about the SVEDC mission and its programs that they now contribute many more hours than they were originally asked to give. SVEDC entrepreneurs also get support from a national program called One Million Cups, where local business leaders gather regularly over cups of coffee and tea to share ideas and help one another.

As Denise and I learned more about SVEDC, our admiration grew for the mission of the organization and its community-based approach to making it happen. Not only are carefully planned businesses being created by well-trained owners, but the business community surrounding them now has a stake in their success because of the mentoring process. It is not the cutthroat, competitive business model we often hear about, and it is a beacon of hope in transforming the economy of Albuquerque’s South Valley. 6 SVEDC.JPG

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