Propel, a business accelerator for existing minority-owned businesses, is launching its next cohort in the midst of several new city-backed initiatives intended to boost the wealth and diversity of the Memphis economy.
In late May, Mayor Jim Strickland announced support for The 800 Initiative, an intensive effort to grow minority-owned businesses with targeted grants, loans and technical assistance.
Propel, an accelerator housed at Start Co., is part of the City's overall strategy. The 12-week minority business accelerator builds capacity of existing minority companies by offering a series of hands-on programming, mentor opportunities, technical resources and more.
“With Propel, as we saw the tangible benefits for business owners in increasing their capacity on the revenue side, hiring more people, and being able to take on contracting opportunities in the public and private sectors, we had the thought of putting Propel on steroids where we could impact even more businesses,” said said Joann Massey, director of the City of Memphis Office of Business Diversity and Compliance.
Related: "Start Co. launches first cohort of minority-owned businesses"
The accelerator is now taking its final applications for its fourth cohort of minority-owned businesses. The deadline to apply for the Propel program’s next cohort is July 30, and programming will begin in August. Previous cohorts consisted of eight to ten teams with annual revenue ranging from $250,000 to $2 million.
“We’re really trying to think through more of the continuum of support, and this is where we came up with The 800 Initiative,” said Andre Fowles, president of Start Co. “Through our work with Propel, we saw other challenges.”
The goal of The 800 Initiative is to grow the revenue of 800 local minority-owned firms by $50 million over the next five years.
Fowlkes pointed out that only two percent of Memphis' 39,800 African-American owned businesses have paid employees.
Those concentrated efforts include doubling the revenue of 500 minority-owned firms with employees and increasing the revenue of 200 minority-owned businesses without paid employees by $100,000.
Through collaboration with Epicenter's executives-in-residence program, companies that have completed the Propel accelerator will be able to work with later-stage business leaders after Propel's programming wraps.
“It’s about surrounding more resources around more minority firms,” said Fowlkes of The 800 Initiative.
Another partner of The 800 Initiative is Christian Brothers University, which later this year will offer courses like Entrepreneurship 101, Organizational Leadership, Business Law and Marketing, as well as tuition assistance to budding entrepreneurs.
“Christian Brothers graduate students will be able to intern within those minority-owned businesses doing things like marketing and accounting and that will be free of charge to those businesses,” said Massey. “Then our initiative will pay those students an hourly wage to compensate for their services.”
Over the first two years of Memphis Mayor Jim Strickland's tenure, the City has grown its share of spending with minority- and women-owned businesses by 98 percent, increasing from 11.9 percent of its contracting dollars in 2014 to 2015 to 23.6 percent in 2017 to 2018, according to data released July 25.
“To truly boost our economy and realize our vision of a more prosperous and equitable third century, we must do everything we can to empower locally-owned, minority-owned, and women-owned businesses,” said Strickland in a statement. “Improving our economy like this will have a long-term positive impact on our challenges, such as crime and poverty. Our work continues, but the results to date speak for themselves.”
Funding for The 800 Initiative includes $1 million from FedEx over four years that will go to a loan fund, and the City of Memphis and Shelby County government each have committed $500,000 for the first year. Fowlkes is hoping to re-up each year with the city and county.
“One of our priorities is looking at the system as a whole and how we can break down barriers and how we can relieve some of the burden of business in general for those that have a historical disadvantage or those that experience systemic racism and discrimination,” said Massey.