Out from Under the Table

An enterpreneurial training program in Detroit has an unexpected side benefit—legitimizing existing but unofficial businesses, and poising them for growth.

Photo courtesy of Southwest Solutions

Rubbie McCoy (rt), a ProsperUs student, and her twin sister, featuring McCoy's balloon art at ProsperUs's 2014 annual convening.

Bobbie Ousley and his wife woke up one day in 2002 to a pool of water—water so high it kissed their knees. Panicked, Ousley immediately rushed to his studio, which housed five sewing machines, fabric, thread, and every other tool one would find in a tailor’s studio. “My first thought was going in there and trying to get my cloths up off the racks, and to put them up to higher places,” he says. He was too late.

The storm left his fabric and thread soaked and unsalvagable and three sewing machines were beyond repair. As he tossed out his supplies, Ousley was reminded of one thing owners of unregistered businesses like his have to do without: insurance. He had none to fall back upon.

That was over 10 years ago, and though he no longer operates out of the same Detroit basement apartment he did in 2002, Ousley continues to work as a tailor under the table. He still has not registered, or obtained insurance for, his business—not that he doesn’t see the value in it, or doesn’t want to. He says he just “never got around to it.”

Like Ousley, many Detroit residents in low-income neighborhoods run unofficial, and therefore uninsured, business. These businesses stay unregistered for a variety of reasons, such as the owner’s immigration status or overdue child support. Others remain unregistered simply because the owners don’t know how to begin the legal process. “The simplest things possible could be a problem,” says Laura Chapman, a trainer at ProsperUS, a Detroit-based entrepreneurial training program. “Some of them are afraid of having insurance or paying taxes. They don’t know what would be required of a [registered] business owner, and if they can actually afford it. They think being legal has a lot of liability.”

Whatever their reasoning, these business owners occupy a peculiar place in the world. In their communities they are bakers, landscapers, and hairstylists; yet to outsiders unaware of their local status, they are just members of another poor community. Far too often, hardworking people like Ousley are dismissed and deemed invaluable, while the economic contributions they make to their communities go unnoticed. Sudhir Venkatesh highlighted this in his book Off the Books: The Underground Economy of the Urban Poor, in which he noticed the same trend happening in Chicago. “I soon discovered that the seemingly random collection of men and women in the community—young and old, professional and destitute—were nearly all linked together in a vast, often invisible web that girded their neighborhood. This web was the underground economy,” he wrote.

While business has been good to him over the years, Ousley no longer wants to be a part of Detroit’s “underground economy.” He’s been able to sustain Osoli, his tailoring business, by solidifying himself as a tailor to his community by word of mouth and years of cultivating relationships, but he’s ready to make his designs available online to reach a wider audience. Most of all, he’s looking forward to the stability (and peace of mind) that a legal business brings as he has so much riding on this venture. “This is it for me,” Ousley says of Osoli. “So it has to be successful.”

After a few nudges from his wife earlier this year, Ousley decided to receive entrepreneurial training from ProsperUS. Started in 2012, the program aims to help entrepeurial-minded Detroit residents in medium to low income neighborhoods do exactly what its name says: prosper. It was based on the Neighborhood Development Center’s Neighborhood Revitalization Plan in Minneapolis. Chapman estimates that about 50 percent of the program’s participants already have unregistered businesses. There is so much “untapped potential,” in these neighborhoods, says Judith Williams, the manager of Focus:HOPE, a nonprofit partner of ProsperUs that hosts its entrepreneurial training on their campus sites.

Through 12 training sessions spread out over 20 weeks, ProsperUS educates students on the fundamentals of starting and owning their own business. “We want our students to recognize that they can be a part of the solution, instead of only being able to identify the problem,” says Kimberly Faison, director of ProsperUS. Sessions are two hours long and focus on various topics—from business planning to market research to budgeting. Each class holds a maximum of 12 students , and trainers are chosen based on their cultural competence, entrepreneurial background, and ability to teach adult learners.

In operation for nearly three years now, ProsperUs appears to be planting and nurturing the idea that Detroit residents can gain more control over their communities as business owners. Chapman has noted that the recent spike in business development in downtown Detroit has inspired underground workers. “They see many people are falling on top of people [downtown],” she says. “All of the theaters are maxed out, and all of the parking complexes are full.” This inspires existing businessowners to strive to be a part of that growth.

Bringing their businesses above ground will not only drive more income, but it will allow owners to employ others in their community and take their businesses to a larger scale. “This is our neighborhood, and we need to depend on ourselves by working together and supporting locally owned businesses,” says Steven Bunnell, an entrepreneur at ProsperUS.

Many of ProsperUS’s participants, especially those for whom English is not their first language, struggle to be as confident as Bunnell as they begin the program. “They’re unsure of their abilities and the value of their work,” says Gabriela Ramirez-Darris, another trainer at ProsperUS. But they get there. Ramirez-Darris says once they begin using their perceived disadvantages, such as speaking Spanish, to their advantage they build enough confidence to publicize their trades.

Because of ProsperUs, it seems certain that Detroit’s latent economy is ready to sprout. These hardworking business owners are ready to be valued, seen, and leave a legacy. “Sewing is a dying art; they don’t even teach it at school anymore, so I want to teach the younger kids in my community,” says Ousley.

This article was made possible by a grant from the Surdna Foundation to allow Shelterforce to increase its focus on economic development topics.

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