Letter to KCMO City Council from the entrepreneur, small biz community (via Eze Redwood)

Editor’s note: The following letter was sent to Kansas City, Missouri, city council members March 11 by serial entrepreneur Eze Redwood, advocating for $11 million in funding for entrepreneur support from KCMO in its 2022-2023 budget. The city council is set to vote on the budget by March 24. The opinions expressed in this commentary are those of the author and signatories alone.

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Greetings City Council Members,

We as the Entrepreneur & Small Business Council, as well as the broader small business community of Kansas City, would like to thank you for listening to us this past weekend. 

As some of you may already be aware, any investment in small business is truly an investment back in the city. Every $1 that is invested in small businesses returns at least $4 back to the city…often in the same budget year. This is because small businesses have to pay taxes quarterly. That 4-to-1 ROI increases to 10-to-1 when considering Economic Activity Taxes and neighborhood impact. 

At the same time, there was 30 percent unemployment in many parts of our East Side where crime has been most prevalent even before the pandemic. We absolutely will not be successful in reducing crime without investing in the small businesses who create neighborhood jobs and work with the unique challenges many in those neighborhoods face. There are countless stories in the Northland, Eastside, and South of small businesses fronting the money for employees to get cars, helping them with rent so they don’t become homeless, picking them up so they can get to work, or making childcare arrangements for them. In many of these cases, larger employers would have just fired them.

Even more important than the 70 percent of net new jobs we create, is the fact that we are often one of the few hiring formerly incarcerated citizens. Whether for DUI, marijuana, or something more significant, we take chances on returning citizens, and work with them when very few others will. If we don’t help them, they often have few choices but to turn to illegal activities to survive. 

Now We Need Your Help! 

Kansas City was ranked one of the worst places to start a business in the entire country. We have one of the highest business start rates, as evidenced by our creating almost 100,000 jobs from 2016-2020, but also one of the highest business closing rates, meaning a significant portion of those jobs went away. If we invest in supporting those small businesses, and the organizations that support them, then we will have an abundance of neighborhood-building jobs. 

Use of funds for $11M

We want to do what Topeka, Overland Park, Nashville, Buffalo, Chattanooga, Austin, and so many of our sister cities have already done: (1) set up grants for those neighborhood job creators most impacted by COVID (many of whom couldn’t get PPP or had the big banks deny them even though they qualified), and (2) invest in supporting the Entrepreneur Support Organizations who get in the weeds with small businesses to mentor them, work through challenges, put in processes for them, and help them reach success. 

• $4.5M — Grants to small businesses impacted by COVID
• $1M — Loan loss reserve fund to enable $6M in loans to small businesses for job creation
• $1M — Small business back office support (leveraging economies of scale)
• $4.5M — Grants to Entrepreneur Support Organizations helping to build small businesses

It is important to note that even at $11m we will still be far behind our sister cities who are dedicating $25–$125M to small business support and growth

Background

The conversation started under Troy Schulte. We then had a series of meetings following the finance/budget office’s initial recommendation of $11M that were supportive of our efforts, however we were told that we would have to wait a year since the first round of ARP funding was going to go to stabilizing city accounts. Our view is that small businesses CANNOT wait any longer. Every day we wait, more small businesses are shutting their doors. We took the city at its word, and if the city does not follow through when they are getting $200M FREE, and when we are contributing hundreds of millions to a budget that is spent on absolutely everything EXCEPT us, hiring citizens no one else will, working with neighborhoods, and returning 4-to-1 return on investment, then that presents a major violation of trust and a defunding of our sector. 

Thank you,
Entrepreneur & Small Business Community
via Eze Redwood