Using Financial Coaching to Help South & West Side Entrepreneurs Build Wealth

Chicago entrepreneurs are known for their innovative ideas for bringing business to the city, but one common issue can often stand in the way of them bringing these ideas to life: their own personal finances.

For more than a decade LISC (Local Initiatives Support Corporation) Chicago’s network of Financial Opportunity Centers (FOCs) have been working to increase the financial well-being of individuals and families all over the city — particularly on Chicago’s West and South sides. These years of experience have demonstrated the power of financial coaching for job seekers and those entering the workforce. Now LISC is finding ways to promote coaching in new areas.

With funding from the Coleman Foundation, LISC facilitated a partnership, between the North Lawndale Employment Network (NLEN) and Sunshine Enterprises’ Community Business Academy (CBA) — a 12-week program that gives entrepreneurs the tools they need to make their businesses thrive. Each week of the program offers a new insight, such as marketing, bookkeeping, cash flow and more — with the third week focusing on personal finances and building individual credit.

That’s where Taneka Pernell, a financial coach from NLEN, comes in. Pernell speaks with Sunshine’s academy participants during Week 3, offering up a financial presentation that outlines the ways entrepreneurs can boost their personal credit — something Pernell said is key to getting started.

“We speak to them a lot about where they’re at, and where they want to be,” Pernell said. “You run into so many amazing people who know exactly what they want to do – but then they forget the personal credit part of it. Any large purchase, or getting any larger undertaking started — like running a business — is going to be harder without good credit. I think it’s important to remember any time you’re doing something that gets the bank involved, the first thing they’re going to do is look at your credit.”

After her part in the academy program is done, Pernell also stays in touch with the entrepreneurs — for free. They continue to meet in one-on-one appointments where Pernell assesses their personal finances, helps them set goals, and provides financial guidance all along the way.

“Taneka’s heart is so big,” said Loren Williams, a program manager with Sunshine Enterprises. “She’s right alongside our entrepreneurs. She’s empathetic, she’s determined, she’s passionate — and those are all things that you need in addition to your expertise as a financial coach because a lot of people come in there with a lot of shame and don’t necessarily want to talk about it.”

Sharing Expertise

The partnership between NLEN and Sunshine has built both organizations’ capacity and demonstrated the value of financial coaching to diverse populations. Students in the Sunshine academy range from idea-makers waiting to take the first step, to budding business owners and seasoned entrepreneurs.

“A lot of Sunshine CBA participants are opening businesses on the South and West sides of the city,” Pernell said. “Their businesses are bringing art — like a new art studio coming to North Lawndale — and we have others who are doing mentoring programs. And, all of this gets to stay in our community, which is wonderful.”

It’s all part of LISC’s bold goal of bringing 500 small businesses and entrepreneurs into a pipeline for support — including leveraging the coaching expertise in LISC’s FOC network to bring in-depth, one-on-one coaching to aspiring entrepreneurs. The support pipeline consists of a multi-layer approach to educate and empower business owners, such as:

• Lending;
• Technical assistance and leadership development for business support organizations;
• Quality-of-Life Plans that focus on corridor investments and neighborhood-driven small business strategies; and
• Growing financial coaching within business support organizations.

The small business Bold Goal is also in alignment with LISC’s Individual Impact Goal of building 6,000 people’s net worth by 2020 — an outcome that couldn’t be achieved without the partnership between LISC, NLEN and Sunshine Enterprises. Facilitating these impactful relationships between community organizations to build capacity and share ideas is a source of pride for LISC, said Program Officer Caroline Rendon.

So far, data shows the partnership is truly making a mark on its participants.

• 36 Sunshine CBA participants have attended at least one financial coaching session
• 28 (78%) have had at least five appointments with NLEN
• 14 (39%) have improved FICO credit score
• 12 (33%) have increased their monthly net income
• 11 (31%) have increased their net worth
• 12 (33%) have increased their financial well-being
• 16(44%) have made progress on a financial or business goal

Williams agreed, saying the partnership has allowed Sunshine to round-out its offerings in a key way.

“NLEN has been just truly amazing, because they have expertise that we don’t have but that our entrepreneurs need to even access capital,” Williams said. “With the support of LISC, it has provided one-on-one credit counseling, provided the tools to help entrepreneurs build their credit, and has given them this knowledge base and connection to resources that’s ongoing. We can’t be everything — it’s this partnership together that helps us make the entrepreneur successful.”

Building-Up Community, Capacity

Much of the knowledge Sunshine clients walk away with ends up reverberating around the community, Pernell said, with participants passing on what they learn to others.

“After they get the full work-up of information through Sunshine, they’re sharing what they learned with other people in the community,” Pernell said. “They’re sharing their experience of building their credit and creating a budget. They’re going on and teaching. I have one client who told me everything we show him, he goes home and shows his wife.”

Over at Sunshine, Williams said the relationship between NLEN and LISC to provide financial coaching to their students has been imperative. Pernell’s financial coaching offers Sunshine CBA participants vital expertise needed for entrepreneurs to access capital, and it gives students the tools they need to build personal wealth within their communities.

“That’s where my passion lies,” Williams said. “If we can build-up the local economy, we can build-up the community, so that’s really important right now.”

Ultimately, Rendon said LISC’s goal is to continue financially educating and empowering current and future entrepreneurs.

“This work is important to me because I really want to see everybody have their business growing; I want them to feel positive about going to the bank,” Pernell said. “It’s awesome to see.”