Microlending Opportunities

He recently also co-founded C’ville Central, a for profit organization whose goal is to ensure that small businesses, once established, will grow and continue as sustainable enterprises. After graduating from the Darden Business School he joined Carrier Corporation which is a division of United Technologies Corp. After leaving Carrier, he and his wife, Betsy Patrick, founded C’ville Coffee, a true community hub which has become the locust for everything from music and art offerings to business meetings and diverse political discussions on both sides of the aisle. Mr. Nguyen and his wife Betsy and their two children, Hattie and Annie, live in Charlottesville. In looking at census figures from 2008 it has been reported by the C’ville Weekly that approximately 97% of the Thomas Jefferson planning districts’ 27,528 businesses are considered small enterprises and of that percentage, the so-called micro businesses, that is businesses with five employees or less, comprise approximately 75% of that number. As many of us are aware, securing financing for these small business endeavors can be a frustrating, daunting and disheartening experience. Banks are more than a little reluctant to take on budding entrepreneurs with little or no credit history which is often the position in which women, immigrants and minorities find themselves. Innovative ideas are always searching out that fertile ground in which to take root. But this requires the initial cash infusion and a thorough going understanding of those structural underpinnings which can support innovation with firm, bedrock business plan. Our guest today has fostered creative, proactive solutions for aspiring entrepreneurs and we are delighted to have the opportunity to have him here with us to share his valuable ideas and future vision for business innovation which truly incorporates equality, social justice and wide-ranging community involvement. Welcome again, Toan.

Toan Nguyen: Thanks, Jan. Thanks for having me.

Jan Paynter: We are very excited about this and it is very timely today and I thought I would read this for all our viewers. The Daily Progress has an article which discusses your work and I thought it would be very important for people to hear this. “The Charlottesville Business Innovation Council on Thursday honored seven businesses and individuals for their positive contributions to the community through their entrepreneurship and technology-based economic development in Central Virginia. The Community Investment Collaborative—which we’ll be discussing at length today—won the community award for improving the quality of life in Central Virginia. Toan Ngyuen won the People’s Choice Navigator Award for leadership in local entrepreneurial high tech community.” Kudos, Toan.

Toan Nguyen: Thank you, Jan. That was a big surprise and I feel very honored to receive it.

Jan Paynter: Well, well-well deserved. Before we begin discussing your work with the Community Investment Collaborative and C’ville Central, share with us if you would a little about your family background in Vietnam, the role that your father played in shaping your convictions and ideals and the goals and philosophy which inform your concept of business development and some of the ways in which businesses can have a positive ripple effect on our wider world.

Toan Nguyen: Right. Jan, much what I do has really, really come from my father ideals like you say and he was a very, very fantastic man. He lived for his country. In 19—in the ‘50s he was sent by the French government to study at the Sarvan and he received a Master of Law and went back to Vietnam to lead his country and that was the plan. My grandfather was Ambassador to Japan from the French government because the French government colonized Vietnam for over 100 years. So he has this incredible idealism that was imparted upon me and I remember every day he talked about how you should live for your community and your job is to build community. And he did that with his life. He led by example. I remember vividly when we were living in Saigon and he had his own chauffeur because he worked for the president who was–he worked like the equivalent of the White House. But he would always care about the people, the everyday people. And I remember one time his chauffeur had had a baby and so he took me along with him to go visit the man’s new baby. And now, you have to understand, here’s a man who works in like the equivalent of the White House, very, very high up, to have that much care and conviction to go see a chauffeur’s baby. And so we went and—so we went there and we saw the deep poverty that they—their condition and I never forget that. The baby’s blanket was comprised of the rice sack that rice comes in.

Jan Paynter: Ah, I see.

Toan Nguyen: And that’s the level of poverty that these people live in. And I remember that he was very touched by that and I remember riding with him back to our house and he’s saying, ‘We have to do something about this’. And sure enough, the next year he ran for mayor of Saigon. So to have that much care and that much sensitivity and to bring me along. Now I think, now that I have my own kid, that’s the kind of lessons that he wants to impart on me and so that’s my mindset. Every family has their own ethos. Some family wants to be…wealth is the most important thing. Some family it’s about education. Some family it’s about the arts. Our family it’s about community building and so that’s where my background came from.

Jan Paynter: What an astonishing role modeling for you and inspiration. Toan, how do you envision the power business being used for purposes of implementing social change and in that regard, what do you see is the role of the small business entrepreneur?

Toan Nguyen: Well, I think the small entrepreneur is really—I’m very, very passionate about entrepreneurs and it’s because really it’s the manifestation of who you are. This is your idea, this is what your passion is all about and you see that–you see that and that’s what drives people when they wake up and they work 10 to 18 hours without stop and that’s because that’s their passion. It’s like having your own kid. I always compare it to that. If you have your own kid, you can be with that child for 18 to 20 hours and not even complain or feel the hardship of it. But if you work for somebody else, it’s like babysitting that kid.

Jan Paynter: I see.

Toan Nguyen: So it’s like after four hours you want to give that kid back and that’s the same dynamic. So—and everyone has a dream. I think everyone wants to say, ‘Gee, this is what I really want to do’. And—so the challenge is how do you make your dream level or sustainable so that you can live and then that’s a very, very hard thing to do and that’s why not everybody can do it because the security is or the lack of security is too much for someone to take that leap and that’s why the Community Investment Collaborative exists is to provide an environment—support system so that we can help people achieve their dream.

Jan Paynter: Yeah, let’s get into detail now about that, its mission and how it functions specifically.

Toan Nguyen: Sure. So the Community Investment Collaborative or we should call it CIC exists to encourage, to foster entrepreneurial idea by providing three core things. One is the education part of it and it’s a 16 weeks business course and basically you come to—each week to class with a very specific homework on your idea. So it’s not theoretical idea about micro economic or elasticity of demand and so on and so forth. It’s about your business and what you’re going to do to advance it whether in marketing, sales or legal or accounting. So by the end of the 16 weeks you will have basically a business plan ready to go. So that’s the first part because what we want to make sure is that you know what to do with the money that we’re going to lend you.

Jan Paynter: And they would be applying for loans between $5,000 up to $35,000, is that correct?

Toan Nguyen: Yes and how it works is that the first loan would be $5,000 and if they pay back on time, they’re eligible for $10,000.

Jan Paynter: I see. So you graduate up as you succeed.

Toan Nguyen: You graduate, yeah. And so the second part of that is—and you have to—and it’s not automatic. It’s not because you’ve taken the course that you automatically receive the loan. We have a loan review committee that’s comprised of two bankers, two business person and one community person who would be advocating for that person because if you think of it, if the bankers use the exact same metrics to approve a loan they would never get it because that’s why banks don’t approve loan because the metrics they use are too hard to meet. So that’s the lending part. And the third part that’s equally as important is the mentoring part and the mentoring part is very crucial because even if you have an idea and you launch that idea, you need to be very flexible, you need to be very realistic about how you’re going to proceed. And so often entrepreneurs, you have to be passionate and so you have to be hardheaded ‘cause when you think of it, what does an entrepreneur—so it’s like, ‘Listen, there’s—something is not happening in the marketplace so I’m going to fulfill that niche’. Well, everyone’s going to tell you it’s not going to work because…

Jan Paynter: Sure.

Toan Nguyen: And that the most common—common is that, ‘Listen, if it would work someone would have done it already’. So you really have to be a hardheaded person to pursue your dreams and launch that business. Well, that can be a liability also because once you launch that, you’re so determined to do that but sometime you have to be flexible.

Jan Paynter: Well, and I know also—and you’ve spoken about this—striking out on your own in a business can be very, very lonely and the support of mentors and successful business community members I can see would be invaluable to people.

Toan Nguyen: Right, right.

Jan Paynter: Let’s turn to C’ville Central. What is it and again how did you come to the idea for its creation, Toan?

Toan Nguyen: So C’ville Central, it’s really the next step of CIC. CIC we help put people in business. C’ville Central will keep them in business by going out and literally obtain the contracts and sub it out to them. I’ll give you an example. We have a painter that just graduated from CIC and his annual—last year income was $18,000. That’s what he made. Now, what C’ville Central have done is that in three weeks we were able to give him $8,000 right away because of my connection to the community that we can grab these contracts and sub it out to them and we expect to give him over $80,000 this coming year just based on our projected growth. So there you can see the tremendous difference that we’re making in his life because even if you start a business doesn’t mean that you’re going to be able to go out and get businesses.

Jan Paynter: Oh, of course, yeah. The failure rate is high.

Toan Nguyen: And what C’ville Central is–we are a general contracting company so it’s not a referral service. So, Jan, if you contact us to paint your house, we are responsible for that so we ensure the quality, the workmanship and we ensure that it’s done right. So if you have any problem, you deal with us.

Jan Paynter: So back up and follow through is very strong.

Toan Nguyen: Right, right. Exactly.

Jan Paynter: I see.

Toan Nguyen: And that’s always the weak side of a micro enterprise is that let’s say if a plumber comes to your house and does the work and it’s negligent. Who are you going to call? You’ll be chasing him or her down to have it redo but after awhile they know your number, they’re not going to answer it and then what? So basically what most people do is just call another plumber and never call that person again.

Jan Paynter: Oh, sure. Yeah.

Toan Nguyen: Rather than go through the legal process.

Jan Paynter: Toan, I know you have a long term ten year plan as well as you want a fix on a permanent location for some of these small businesses and I’m guessing perhaps in the future some mixed use of buildings incorporated into that as well. Talk about that a little bit if you would.

Toan Nguyen: Yeah, so I have a ten year plan of the CIC of the first two years. This phase we are in right now I call the virtual phase and basically we’re creating demand for later so in other words, have a head start. The next phase that we’re going to do is we’re going to rent a block of space and we’re going to serve that as an incubator space. So C’ville Central will talk to the landlord and rent let’s say three shops and there we can divide into like six shops, make it smaller and then like a graduate of CIC who’s interested in having a retail space or workshop can lease, sublease it from us and then it’s like incubator space because that will reduce the rent and also the paperwork because if they themselves go to landlord, most likely they’re not going to be able to get that space so we reduce the barrier to having a space. And there we’re going to foster different businesses. The next phase of that is like exactly what you say is have retail space and production space, hopefully like someplace like the next building and there we’re going to have childcare also.

Jan Paynter: That was my next question.

Toan Nguyen: Yes.

Jan Paynter: It’s a very important part, childcare.

Toan Nguyen: Exactly because if you think of it, there are two reasons why people don’t go back to work. One is transportation, they don’t have cars and it takes them an hour and a half just to get somewhere by bus. And then the second thing is childcare, where are you going to put your kids that’s affordable. So right there we have childcare also. And by that time we’ll be employing people also. Right now we are subbing to minority businesses but by that time we’re going to have a lot–we’re able to employ a lot of people.

Jan Paynter: To return to the beginning of our conversation, Toan, you discussed in your initial dream building businesses in Vietnam and thereby promoting inter-cooperation and cross cultural experiences between people and countries. In your work and experience with the CIC, C’ville Central and also C’ville Coffee, how would you characterize the potential benefits of promoting businesses owned and run by recent immigrants to this country?

Toan Nguyen: You know, Jan, if you look back historically, who started businesses are immigrants and here’s the reason why, because it’s backbreaking work, it’s so hard to start your own business because you have to work amazing hours to—just to get it off the ground. So—and let’s say someone from the Darden Business School, if he or she has an offer from McKenzie or Bank of America and to make this amazing amount first year or start a business where you work like crazy and you can lose it all, which one is he or she going to choose. Going with McKenzie would make more sense. So whereas an immigrant, they don’t have that luxury of Plan B or Plan C. For them they have to start a business because most likely they’re not very fluent in the language, they don’t know the inner workings of a town so really creating their own business is the only way they know how and that’s still true, that’s still true. If you look up the downtown mall, look at all the businesses. Café Cubano, it’s owned by Tony, he’s from Cuba. You look at Marco and Luca’s, that started by Dotson and Gorgona who’s a refugee from Bosnia and on and on so it’s a very natural thing but also it’s a very enriching thing for our community.

Jan Paynter: It’s incredibly important as we’ve said on previous programs, all of us have in our DNA—almost all of us—the issue of immigration and how to make it so to welcome people I think is critically important to our sense of who we are.

Toan Nguyen: Right, right.

Jan Paynter: Absolutely. What is so exciting to me, Toan, about these projects that we’ve been discussing is the very real potential you see here for addressing the problem of poverty in our city or any city while simultaneously extending and enhancing a sense of community. In an earlier interview with Paul Gaston who is Emeritus Professor of History at UVA we discussed his grandfather’s founding of the utopian community of Fair Hope, Alabama in the early 20th century. His grandfather’s concept, like yours, was that every member of the community has the opportunity to prosper and the entire society will benefit and thrive as a result. I wanted to ask you, are you actively working with other Virginia cities in and around the state discussing these programs and ideas?

Toan Nguyen: Absolutely. Last year Secretary James Chang, Secretary of Trade and Commerce, invite us to go to Richmond and meet with the staff of the governor, Gov. McDonnell to see if we can do—we can create an organization like CIC in like southwest Virginia where the condition—the economic condition is very dire and at that time we said we’re not ready because at that time we just get going but in two weeks we’re going back to meet with an incubator called Advance Tech to see if we can help them start something like CIC. So here’s a great story that something started in Charlottesville, that’s going to impact the whole state and as we get more success story and system in place for CIC we can—we’ll be in position to help other communities around Virginia.

Jan Paynter: Oh, this is very exciting. I know Secretary Chang mentioned that entrepreneurship accounts for approximately 65% to 75% of all new jobs in the Commonwealth and in fact he had an interesting quote when he said, ‘We need everybody in the community to be energized and mobilized to assist in economic recovery’. As we all know, we have the sequester bearing down on us. We need everybody thinking about new ways to innovate and according to an article in the August 4, ’12 Daily Progress, Secretary Chang championed the new program as an important community service.

Toan Nguyen: Yes and that was amazing. He was our keynote speaker for the first graduating class of CIC. So here’s–

Jan Paynter: Fantastic.

Toan Nguyen: He drove—it was a Saturday. He drove from Richmond, came down to give the keynote speech and then go back and that’s how much he believe in what CIC is doing and that’s how much he believe in what he said.

Jan Paynter: Oh, how wonderful to have that kind of support. Toan, thank you very much for making time to join us and lending your wisdom, your philosophy and your thoughts to our discussion today.

Toan Nguyen: Thank you, Jan.

Jan Paynter: Thank you at home for joining our conversation. If you would like more information concerning the issues under discussion today, we invite you to take a look at our website at politicsmatters.org. We will be posting a number of books, articles and relevant links on many of the issues under discussion there for you. You will also find there a complete archive of all prior Politics Matters programs which you may watch in their entirety at any time. We will be posting extended versions of the interviews online as well and will continue to be adding more content. As always, we are very interested in hearing from you with any and all questions, concerns and ideas for future programs. We encourage you to email us at jan@politicsmatters.org. We air on PBS WVPT on the last Sunday of every month at 11:30 am. Thank you again and until next we meet, I’m Jan Paynter and this is Politics Matters.