Most people may think Johanna Melamed might have been a little crazy to open a second location for her high-end consignment store, The Closet, which is based in Santa Barbara, during a time of contraction in retail. Even Melamed had her doubts after she opened her new store in Westlake Village last October. But after taking a crash course in business planning through the Santa Barbara and Ventura counties Women’s Economic Ventures (WEV), she felt she had the know-how to open the new store and see it become a success.
“WEV was a wonderful experience; they formalized the knowledge that I had accumulated, and gave me the tools that took my business to the next level,” she said.
Melamed bought The Closet in Santa Barbara in 2003, shortly after she graduated from the University of California, Santa Barbara. She said the store wasn’t much at the time, but its popularity grew, almost strictly by word of mouth, during the next five years. When inventory began coming in too fast to sell at her Santa Barbara store, she called WEV to figure out her next move. She enrolled in WEV’s 14-week 56-hour Self-Employment Training Course in late 2007. The objective for all students is to complete a business plan by the end of the course. Upon graduation, she had sharpened her business skills, made a feasible business plan and opened her new store 10 months later. Although success wasn’t immediate, she is still glad she took the risk.
“The first couple of months were really frustrating, even if [the resale] business is supposed to do well … in a down economy,” she said. “But the last two months have been really fantastic.”
Melamed isn’t the only person trying to make the most out of a dire situation in this economy. Thirty-five students graduated from WEV’s training course in December and are looking forward to opening or expanding their businesses in Ventura County. Since the course’s inception, more than 4,000 people have taken the course in the last 15 years. From that, 1,000 businesses in Ventura and Santa Barbara counties are now run by WEV graduates or those who obtained loans from the organization.
Although the news about the economy can make any optimist downtrodden, Marsha Bailey, CEO of WEV, believes that now is the time to run with small business ideas.
“I think it is really important to support small local businesses,” she said. “They are the backbone of our economy.”
She said there is a perception that most people work for Fortune 500 companies, but the reality is that small businesses employ more than 80 percent of the nation’s workforce.
Bailey, who founded WEV more than 20 years ago, has focused the organization’s efforts on teaching people how to put together a business plan as well as helping entrepreneurs open or expand their businesses, even with credit problems, through the loan program.
“The goal is to help every client figure out if their business idea is feasible and if so, to finish a business plan.” Bailey said. “There is a lot of skill building, financial training, management training, marketing, all those things you really need to know as a start-up business owner.”
WEV’s loan program, which loans up to $25,000 for start-up businesses and up to $50,000 to expand a business, requires every individual to have a business plan if the loan is more than $5,000. If less than $5,000, WEV requires loan applicants to complete a three-page questionnaire about their business models.
WEV will begin its Self-Employment Training Course in February. Anyone interested in the course must take a one-hour orientation before enrolling. Orientations will be held in Oxnard on January 28, from 11 a.m. to noon, and February 4 and 6, from 11 a.m. to noon. The class runs for 14 consecutive weeks, one night a week for 3 hours, and includes two full Saturdays. Classes are taught in Santa Maria, Santa Barbara, Oxnard, Thousand Oaks and Ventura.
With a business plan in hand, either through the course or done elsewhere, a person can be eligible for a loan through WEV. There is approximately $1 million available for start-ups or business expansions. Bailey hopes the organization will be able to obtain another $1 million through public and private entities for the loan program.
The interest rates on loans provided by WEV are typically a little higher than banks. Bailey encourages business owners and entrepreneurs to start at banks for loans, but if denied, WEV loans can be obtained more easily. Since WEV is an economic development group and doesn’t take deposits, it doesn’t have to be regulated as banks are and can loan money to applicants who wouldn’t necessarily qualify for business loans.
Although the training course isn’t free, fees are done on a sliding scale based upon an individual’s current income. The cost of enrollment can range between $200 and $2,500.
For locations and details about orientation, call WEV 604-9000.