Enactus Helps Entrepreneurs in Wrangling Success
Ranching is in the blood of brothers Ricardo and Alfredo Ortiz. Generations of their family have worked the rugged land and raised beef in their home state of Jalisco, Mexico. These two men have dreamed of continuing that family tradition for years now, by building their own cattle ranch in the Yakima Valley. But too many barriers have stood in their way—a lack of financing, the language gap, and few Spanish-speaking mentors to help them learn and tackle all the complicated issuesthat come with managing a business.
Today, however, the Ortiz brothers are finally a step closer to fulfilling their dreams. Heritage Enactus students are helping them through ADENTRO, a 10-session program for aspiring entrepreneurs that teaches basic business skills and connects them to potential funding sources. Developed by the Office of Rural and Farmworker Housing (ORFH) in Yakima, the ADENTRO program is geared toward helping rural low-income and underserved individuals who want to achieve financial independence by owning their own businesses, particularly agriculture-based businesses.
“Starting a new business is difficult for anyone,” said Lizbet Lopez, a sophomore majoring in Business Administration and one of the developers of the ADENTRO curriculum. “But when there are added barriers like language or unfamiliarity with the American banking system, it becomes much more difficult.”
ADENTRO leads participants through the information they need to build a solid business plan. They are introduced to computer basics using Microsoft Word and Excel, and they learn about banking and credit, taxes, insurance, human resources, marketing their products, and business and social etiquette. After participants write their business plans, Enactus students and volunteers from various industries critique the plans, challenging the future business owners to think how they would handle any number of unforeseen circumstances. All this, says Professor Len Black, chair of the Business Department at Heritage and Enactus advisor, is to give the future entrepreneurs a solid foundation for success.
“Seventy-five to 80% of all businesses fail in the first five years,” he said. “The main reasons are a lack of capital and a lack of planning. Businesses don’t run in a smooth, straight line. Unexpected rough patches will occur and failure to plan for these causes businesses to fail.”
After graduating, participants can qualify for funding assistance through ADENTRO’s loan products and services. These include down payment assistance for up to 10% of the purchase price for land, term loans to help finance machinery and other farm investments, and a revolving line of credit for working capital for operations.
ADENTRO got its start in 2010 when the U.S. Treasury Department approved ORFH’s application to become a Community Development Finance Institution (CDFI). According to program manager Juan Aguilar, these institutions are typically housed in low-income, blighted areas. They function as rural and urban renewal projects—educating, empowering and funding local entrepreneurs to build successful businesses that improve the economic conditions of the community. Aguilar contacted Black to enlist Heritage students in the development of the educational side of the program. “We know from experience that education and training are paramount for programs like this. If we didn’t build it into the system, we would be setting the participants up for failure,” said Aguilar. Heritage and the Enactus program have good reputations and a proven track record for building and facilitating these kinds of trainings. Partnering with them made a whole lot of sense.
Aguilar developed the list of the ten module topics that needed to be covered and turned it over to Enactus to build the training curriculum. The students also took on the role of leading the training sessions, filling in with guest speakers to cover technical aspects of the topics, such as the USDA Risk Management specialist who talked about the difference between crop insurance and crop revenue insurance.
Seven participants graduated in the first ADENTRO class. Of these, three, including the Ortiz brothers, have started the process of securing financing for their businesses. Since that first class, Enactus has led two more classes: an English language class geared toward members of the Yakama Nation in March, and a second Spanish-language course in April.
Black foresees Enactus leading several ADENTRO classes annually. While the trainings are geared toward agricultural based businesses, it does not exclude future entrepreneurs looking to enter other fields. The program is free and open to anyone in the Yakima Valley.
The Ortiz brothers’ dream of leaving their jobs in the fruit industry and starting their own cattle ranch seems closer than ever. They have found a “move-in ready” ranch that they are trying to purchase and are only weeks away from closing on the loan that will make it happen.
“ADENTRO helped us feel so much more confident and gave us the knowledge we needed to build a working plan and get financing,” said Ricardo Ortiz. “We really appreciate all the help we received from ADENTRO and the Enactus students. These kids are amazing.”