In the wake of the COVID-19 pandemic, cities across the United States were faced with unprecedented challenges. As part of their pandemic relief efforts, the City of San Diego has taken strides towards supporting informal entrepreneurs by providing opportunities for childcare businesses to establish themselves more formally. With the help of the National League of Cities (NLC) City Inclusive Entrepreneurship (CIE) program they have been able to secure additional funding and resources to enhance this initiative. Through this program, they also receive technical assistance from Rising Tide Capital, a partner and program expert that gives advice on how to support cities in working with the many local business owners who run businesses that meet community needs but may not be licensed, also called “informal entrepreneurs.”
“I’ll never forget how it felt when small business owners were calling, wanting assistance. As much as we wanted to help them, we couldn’t because of their bookkeeping, records or they were sole proprietors. At the time, with the funding we had, we couldn’t assist,” said Monica Hardman, Deputy Director of the City of San Diego’s Economic Development Department. She shed light on the origins of this plan by explaining that the city’s response to COVID-19 exposed a painful reality: many small business owners, particularly in Black, Indigenous, and People of Color (BIPOC) communities, were unable to access resources due to a lack of knowledge on formal business practices. The economic turmoil highlighted the need to address these knowledge gaps.
How San Diego is Doing It: The Promise Zone
Emerging to address this challenge is the San Diego Promise Zone‘s initiative, which seeks to empower BIPOC childcare entrepreneurs by offering training, resources, and funding for permitting and licensing. The Promise Zone initiative was born out of a partnership with the Logan Heights Community Development Corporation, a trusted community partner already working diligently within the Promise Zone. In San Diego, the Promise Zone is a culturally rich area that has face challenges due to historical disinvestment. When the city originally approached Logan Heights about the initiative, they were delighted to find the partner was already building their own cohort of small business owners and had a group of applicants interested in childcare. By combining their resources, the city was able to focus on childcare givers allowing Logan Heights an opportunity to extend it’s resources to other small businesses.
This partnership focuses on empowering childcare entrepreneurs, who in San Diego are primarily women of color, to establish their small businesses and formalize their operations. This city-led initiative has the potential to help three major groups of San Diego stakeholders:
- Entrepreneurs, who are receiving access to the tools and resources they need for success and business formalization from experts.
- Residents, who have been impacted by the rising cost and lack of available childcare will see an increase in available caregivers.
- The City, which will have more caregivers available in the area and see better employee satisfaction as they too struggle with access to childcare.
This initiative aims to create a win-win scenario all parties by creating an inaugural cohort with five informal entrepreneurs. The City will utilize CIE grant funding to support these entrepreneurs and take them step by step through the process of formalizing their businesses.
When asked what success will look like as the program moves forward it was shared that success would be creating a training program that’s valuable to those within the cohort and establishing a path to success that can act as proof of concept for future growth.
Lessons Learned from San Diego
By proving that implementation of the initiative works to help informal entrepreneurs and families across San Diego they can create a bigger program and accept a larger cohort in the future. In the meantime, the City shared lessons learned fellow cities can consider when working to support formalization of local business owners:
- Collaboration with partners is key. It’s important for the Promise Zone initiative to show resilience in gathering additional funding from partners. Hardman iterated, “You have to learn to leverage funding not only from NLC, community partners, whether is philanthropic or private that figure out a way to help those most in need.” One of the most significant obstacles San Diego faces in this undertaking is capacity and staffing challenges. Luckily, the City’s partnership with the Logan Heights Community Development Corporation has allowed them to continue the initiative by dividing and conquering responsibilities.
- Listen to the community. Hardman and her team stressed the importance of people feeling comfortable working with the City and embracing learning the needs of informal entrepreneurs rather than inferring based on standardized practices. San Diego emphasizes the importance of listening to community’s needs, incorporating flexibility in program design, and embracing a mindset of empathy and understanding. Ensuring the program genuinely addresses the needs of the participants and the community is paramount.
- Be flexible. This sentiment resonates with the need to truly understand the challenges and barriers faced by informal entrepreneurs. This means that traditional approaches to engagement may not be sufficient, especially when dealing with BIPOC communities. Effective engagement requires stepping into the shoes of the participants and designing programs that cater to their unique circumstances. This could mean considering alternative or multiple meeting time options to account for the schedules of working parents, night or part-time jobs on top of other responsibilities informal entrepreneurs face.
- Keep an eye toward the future. Through the partnership with Logan Heights, the City has realized that fostering resilience among informal entrepreneurs is not just about providing immediate resources but building a launchpad for their long-term success.
The City of San Diego’s Promise Zone initiative is a commendable step towards addressing economic disparities and supporting underserved communities. By focusing on the needs of informal childcare entrepreneurs and leveraging the expertise of community partners, the City aims to create a more resilient and equitable local economy.
Want to learn more about CIE and programs like this you can join? You can meet with one of our Member Services representatives to discuss NLC membership by visiting our website here.
This blog is part of a series highlighting NLC’s City Inclusive Entrepreneurship (CIE) Network. Cities in the network have committed to implementing new policies, programs and practices that increase economic opportunity for residents through small business ownership and entrepreneurship. In May 2023, Mayor Todd Gloria of San Diego, CA, committed to prioritizing business support and financial empowerment for early childhood providers.