Trustee: La Cocina
San Francisco, CA
Why are you interested in becoming a Trustee?
La Cocina's mission is to provide resources and opportunities to entrepreneurs so that they can make a living doing what they love to do. We want to be a trustee on Kiva Zip so that we can expand the ways that we are able to connect entrepreneurs to the resources they need to launch and grow their food businesses.
What is the mission of your organization?
The mission of La Cocina is to cultivate low-income food entrepreneurs as they formalize and grow their businesses by providing affordable commercial kitchen space, industry-specific technical assistance and access to market opportunities. We focus primarily on women from communities of color and immigrant communities. Our vision is that entrepreneurs will become economically self-sufficient and contribute to a vibrant economy doing what they love to do.
What indicators/metrics do you use to evaluate and monitor your impact?
We measure our success by the success of the small businesses in our incubator program. Businesses are in our incubator program until they achieve economic or operational self sufficiency at which point they graduate. We measure economic impact by the sales revenue the businesses generate.
How have you performed in the past, according to these indicators/metrics?
Over the past 6 years, we have graduated 10 businesses, and this past year, the businesses in our incubator program sold over $1.1 million dollars.
How will you determine whether or not the business plans of the Borrower(s) you endorse are sound?
Every business in La Cocina's incubator program must submit a business plan with their application. The plan is evaluated by staff as well as by our Advisory Committee. Advisory Committee members are professionals in the food industry, small business owners, or have a strong background and understanding of finances. Business plans must demonstrate a viable concept and be accompanied with financial documents that show that the business will be able to attain profitability. In addition to the initial screening, during pre-incubation, all businesses that are accepted into the program spend six months further refining their plans. While working through a curriculum that covers marketing, product development, operations, and finances, each business owner is paired with volunteers that are experts in their fields each of whom works with the business owner to strengthen their business plan. At the end of pre-incubation, each entrepreneur presents their expanded and improved-upon business plan to a group of Advisory Committee members who provide further recommendations for launch and growth within incubation.
How will you know whether the Borrower(s) you endorse will have the character to repay a loan?
La Cocina's program incubator program is quite selective. We are only able to provide space and resources to a limited number of entrepreneurs so we choose them very carefully. A significant factor in our decision to accept someone is their character - we look for people who are natural born entrepreneurs and who we know will do what it takes to make their business successful. Our incubator is an intensive program based on one on one meetings with each entrepreneur. During pre-incubation, business owners spend 3-5 hours per week working on their business with staff. We know all of the business owners in our program, and personally see the time and energy that they put into making their dreams a reality. In addition to getting to know the entrepreneurs personally, La Cocina works closely with every business, from day one, on the financial aspect of the business. Our finance curriculum covers both small business accounting as well as big-picture financial strategy and we require complete financial transparency. At least once a month a staff person sits down with every entrepreneur in the program to review their expenses and revenues and to create goals for sales in the following month. Whenever a business in our incubator looks for a loan, we work with them closely to figure out how much money they need and, most importantly, how they will be able to pay that money back. We will only endorse businesses who we know have a viable repayment plan for their loan. Lastly, La Cocina charges a monthly fee to all program participants, as well as hourly rental fees for use of the kitchen and storage. We know first-hand the businesses' ability to repay debts because they pay bills to us every month. We will only endorse businesses who have a record of paying their monthly bills in full and on time.
Please describe what type of business, financial, technical or other support you plan on providing to the Borrower(s) you endorse:
La Cocina provides technical assistance to all of the businesses in its incubator program. The majority of assistance is one on one with either staff or industry expert volunteers. For example, businesses are all paired with marketing volunteers who help them create a marketing and promotions plan as well as understand how to use social media to promote their businesses. La Cocina also provides referrals to business owners - we work closely with a number of nonprofits in the city that provide resources including IDA matched savings accounts, low-cost Quickbooks and accounting classes, free tax preparation, etc.
How will you establish whether the Borrower(s) you endorse are in debt, or have a history of debt? How will what you find affect your endorsement of their loan application?
La Cocina program participants all sign a contract in order to rent our kitchen space. One of the conditions within the contract is that businesses must be willing to be fully transparent about their finances (both business and personal). In order to help businesses get started, we must have a complete understanding of how much money they need each month for personal expenses and how much capital they have available. Any personal debts are taken into accounts when making these calculations.
Why can't the Borrower(s) you endorse access traditional loans?
There are usually multiple reasons why La Cocina's program participants can't access loans. Because every entrepreneur in our program is low income, many of them lack assets to use as collateral that is required for most loans (even from nonprofit lenders.) Also, it is very difficult to get a loan for a start up business. Most lenders require 1-2 years of business records to give out a business loan.
Please describe how you could help us to ensure that the loans you endorse on Kiva Zip have a significant and positive social impact:
Kiva Zip allows people get get loans based on their character and the strength of their business plan rather than on traditional factors such as credit scores and collateral. Traditional lenders are often, due to regulations, unable to provide capital to really talented entrepreneurs who need small amounts of money in order to grow their business idea. La Cocina's mission is to provide resources to entrepreneurs so that they are able to make a living doing what they love to do. The loans we endorse will further our mission and further low income entrepreneurs' ability to build businesses that will create assets for them, their families, and our community.
About La Cocina
- Trustee Type:
- Nonprofit Business Incubator for Food Businesses
- Third Tier trustee
- On Zip Since:
- Feb 22, 2012
- Loans Endorsed:
- Total Value:
- Paying on Time:
- Paying Back Late:
- Repaid in Full:
- Repayment Rate: