Alumni Success StoriesDebra Esparza, M.B.A. '92
Business Expansion Network
What kind of business did the entrepreneur start?
Debra Esparza founded USC’s Business Expansion Network (BEN) in 1991. BEN provides management and technical assistance and entrepreneurial training to small and minority owned business operating in the Greater Los Angeles area. BEN’s mission is to enrich the "entrepreneurial spirit" and spark business growth and community economic development in Los Angeles. In addition to providing consulting services and training, BEN also assists fledgling businesses with loan development and financial packaging and provides access to educational and technical resources. Simply put, BEN aims to nurture business expansion and job creation.
Five major ways in which BEN provides business support are 1) Access to Capital: BEN maintains a comprehensive database of sources of business capital including detailed information about special loan programs and eligibility criteria. Business analysts at BEN will assess a business’s capital needs, develop a comprehensive loan package and aggressively target potential sources of funding. 2) Management and Technical Assistance: BEN boasts highly trained business analysts who are eager to share their years of experience in the business world. These experts cover the distinct functional areas, both line and staff. They also help businesses lay down goals and specify supporting objectives to meet these varied goals. 3) Government / Institutional Business Opportunities: BEN understands the specific rules and guidelines under which this sector (which entails government agencies and large corporations) operates. For small businesses wanting to target these entities as their primary clientele, BEN can assist them with getting on these institution’s vendor lists. 4) Entrepreneurial Training: BEN can cater to the varying needs of small businesses, from those starting up to those wanting to expand their ventures. BEN offers a practical, "nuts-and-bolts" approach and helps you achieve your desired level of profits and sales. Specifically, FastTrac Entrepreneurial Training runs for 9 weeks for start-up businesses and 12 weeks for existing business owners. 5) Disaster Recovery / Contingency Planning: BEN actively assists those businesses feeling the economic impact of civil disturbances or earthquakes by focusing on getting these business back on track after a disaster. BEN also helps develop operational procedures that minimize the impact of future disasters.
Under Ms. Esparza’s guidance, BEN has developed much needed resources for entrepreneurial training and support services. BEN’s impact on the Los Angeles community has been remarkable. More than 400 youth have received entrepreneurial training and encouragement. Over 2500 businesses have received in-depth management and technical assistance. An additional 200 businesses have benefited from workshops and seminars and close to 1000 entrepreneurs have received business plan training. More than 150 USC Business students have been involved in BEN activities and have assisted 50 businesses through their business / entrepreneur classes. Finally, nearly 75 non-profit organizations have participated in entrepreneurial / strategic planning workshops and services.
The documented results of these activities are even more impressive. More than 250 jobs have been added, 150 of these in low-income communities. Small business clients have received more than $8 million in loan approvals and have secured more than $4 million in procurement opportunities. Four youth entrepreneurial programs have become independent and self-sufficient. To sum up, small businesses have recorded dramatic increases in sales, profitability and management skills. BEN’s present looks very bright; the subsequent sections will focus on Ms. Esparza’s contributions and BEN’s past and future.
What is the background of the entrepreneur?
Ms. Esparza attributes much of her success to the immense support she has received from her family, a simple hard-working middle class family. Her father is an engineer and has worked for the same company for over 35 years. Ms. Esparza’s mother is a human-resource director and has had only 3 employers in her 35-year career. Debbie contrasts this with her theory that one will have at least five careers in a lifetime thereby implying that she may "indulge" in other fields in the future. Ms. Esparza has one younger brother as well as 28 aunts and uncles, 50 cousins and 6 second cousins that make Ms. Esparza’s extended family seem huge. What is important to note is that education has been greatly valued in the family, Debbie is one of the first in her extended family to earn a Bachelor’s Degree and the only one to date to have earned a Master’s Degree.
Debbie says she has learned much from her family in terms of values and ethics and hard work, honesty and humility are traits she has imbibed from her parents. These qualities, along with sound judgment, have been especially beneficial to Debbie in her current role as Director of BEN. Debbie says that balancing work and her personal life is often tough, but her value system helps her overcome this challenge.
Ms. Esparza has two degrees, both from the University of Southern California. She graduated in 1982 with a Bachelor of Science in Business Administration emphasizing in Finance and Business Economics. In 1992 Debbie finished her MBA with an emphasis Entrepreneurship and Venture Management. Education has been extremely important to Debbie and while she acknowledges the existence of the "paper-chase," it is the pursuit of knowledge that is important to her. USC’s Marshall School of Business has always emphasized both the academic and industrial dimensions and this has helped Debbie in her consulting work. She has a reputation for helping businesses come up with simple yet realistic solutions to their problems.
Ms. Esparza started part-time work in commercial banking at a clerical level in 1976 when she was in high school. She learned the numerous details about bank operations and went onto a management-training program emphasizing loan packaging. Ten years at Bank of America saw her rise to the Assistant Vice-President level. She accepted the position of Vice-President / Manager at Southern California Bank in April 1986. This experience in finance and specifically loan packaging gave Debbie a first-hand perspective of the financial constraints her clients face in the day-to-day running of their businesses. Debbie has been able to use her experience to help them maintain a stable financial position emphasizing the need to have liquid working capital at all times. Having achieved a prestigious rank at a young age, Ms. Esparza started to explore her inner self. She found she was living on a path paved by societal norms; in December 1989, Ms. Esparza decided to "explore" the world and understand the meaning of life.
Debbie quit her job and visited friends in Wyoming and Maine and camped in Mexico; she also indulged in philosophical thought. She wanted to "leave a legacy" and make a tangible contribution to society and she joined USC in 1990 to fulfill one of her re-defined goals of pursuing education. Debbie’s ability to deviate from this conventional path shows her immense courage, a trait that helps her overcome the toughest "dilemmas" and "situations" her clients often face in today’s competitive business environment. It was at USC that Debbie founded BEN; the next section will also cover BEN’s history.
How did the entrepreneur get the idea for starting this business?
BEN started in 1991 at the USC Entrepreneur Program as the University-Community Outreach Program (UCOP). The UCOP was a University-wide community service initiative to get involved with the surrounding communities of USC. It entailed different programs and services including educating businesses around USC and a middle school mentoring program. Ms. Esparza was a volunteer during her MBA course and later became the paid program coordinator. UCOP however was product driven; one of its programs was geared towards training high school teenagers to start and manage their micro business.
Debbie noticed that this UCOP program did not meet the entire needs of the community. She also noted that the UCOP was operating on the basis of a manual, which outlined how to implement different programs in a certain fashion. Debbie was clearly able to see that these programs did not meet the needs of the community and that a "twist" was needed. Debbie decided to go "outside the manual." In 1992 she instituted a "market-driven strategy" by expanding the services and programs of the UCOP (which was to later become BEN) to meet specific community needs. Following the civil disturbance in Los Angeles in 1992, which left businesses in the community "shattered", Ms. Esparza gathered a team of MBA students to help these businesses recover. She taught these volunteer students the fundamentals of loan packaging and literally began rebuilding one business at a time. This effort was known as the Community Enterprise Projects, and in 1993 won the University-wide Volunteerism Award.
1993 and 1994 were critical years for BEN as it successfully bid for public contracts to provide business services in Los Angeles. BEN’s budget jumped from $300,000 in 1992 to $1.2 million in 1994. Debbie’s dreams of "making a difference in a small way" were moving in a big manner.
What did the entrepreneur do to start this business?
In July 1992, Debbie "accidentally" learned about a Community Town Hall conference through a radio broadcast and decided to "gate-crash" the meeting at which she was able to meet many administrators of the City of Los Angeles. It was at this conference that Debbie learned about RFP’s (Request For Proposals) and came to know Ted Berkowitz, Program Monitor for the City of Los Angeles. Ted was very impressed with Debbie’s accomplishments and acted as a guide to Debbie and taught her how to seek funding. Ted’s most important contribution was that he was able to get Debbie on various lists, which would enable her to subsequently apply for funding through proposals. These proposals were somewhat similar to business plans; it had to present a concrete basis for requesting funds.
Debra submitted her first proposal to the City of Los Angeles Community Development Project in late 1992. She was awarded $240,242 to fund her "community initiatives" and this marked the "christening" of BEN. Debbie’s next steps were to bring BEN to an operationally-ready stage. She secured office space for BEN in the University Village Mall across from USC; she furnished the office, purchased supplies, hired assistants; in short Debbie put the "infrastructure" in place.
BEN became a household name in lower-income business homes and began enjoying tremendous growth especially in 1993 and 1994. To continue BEN’s history from the above section, Ms. Esparza was able to help BEN in the most important way possible. It is a well-known fact that businesses growing at an accelerating rate go "bust", Debbie protected BEN by controlling its external growth in 1995. She chose instead to focus on "re-creating" BEN by implementing measures to keep pace with information technology; database systems were put into place at BEN. This new infrastructure was reinforced in 1996 and 1997. It is important to note Debbie’s vision and experience in this matter, she was able to anticipate what actions would lead to BEN’s downfall. Debbie successfully controlled BEN’s growth; it is clear through her concerted efforts that BEN is a successful institution today.
What major problems did the entrepreneur encounter during the startup of this business?
As with every new business venture, BEN too wanted to establish its own identity. BEN wanted to be responsible to its mission and have access to capital to grow and develop. However, one of the major problems BEN faced was that it had its own mission, and yet it had to operate within the framework of USC. BEN’s mission was to cultivate the entrepreneurial spirit, however USC wanted it to "lean" towards "certain projects." In terms of capital requirements, BEN found itself competing with other units within USC. This was especially frustrating as BEN needed all the help it could get in this area. To make matters worse, Ben was competing for funding from both the public and private sectors against various community agencies. According to Debra, the tragedy here is that BEN is not able to stay "true to its mission" by competing against these agencies in the community. Funding serves as a continuing challenge for BEN even today.
Another critical issue that challenged Ms. Esparza was the fact that she had to deal with an overly bureaucratic system. As an entrepreneur, Debbie possesses a certain vision and her ideas needed to be acted upon in a timely fashion and yet USC is slow to respond. Sticking to formalities and rules and regulations was particularly challenging because Debbie felt restricted and limited. It appeared as though USC was preventing BEN from sticking to its mission. It is clear that BEN is able to function smoothly under Debra’s direction; however, USC still controls important decisions such as to whom and where BEN may submit proposals and who can sigh these proposals. This area is again challenging for BEN as Debbie feels that the USC administration needs to be more supportive of BEN and allow it a greater level of autonomy.
How were these problems solved?
Ms. Esparza was indeed challenged by the above-mentioned problems. However, she came out on top by "staying under the radar." Debbie managed to keep a low profile both of herself and also of BEN. She focused on her inner strengths and was successfully able to translate this concept to BEN and she deliberately controlled the number of contracts on which BEN would bid. This, in turn, allowed BEN to "grow" as an organization and not fail by expanding uncontrollably. Debbie aims to lead by example and hopes that by putting in her best, her staff will do the same which, in turn, will maintain BEN’s positive image in the community. The important implication here is that the corporate ego is kept under check while BEN maintains a positive self-image which was because of the good work it was doing. Debbie hopes that by setting and maintaining high standards, USC will recognize BEN’s many contributions and give it more autonomy and a possible increase in budget.
Who did the entrepreneur use for help and guidance during the startup of this business?
Jon P. Goodman, former director of USC’s Entrepreneur program was Debbie’s "mentor" when BEN was started. Jon was an invaluable source of help as she cut down huge amounts of "red-tape" that were to come Debbie’s way. Debbie drew much support from her family and close friends who were a great source of motivation for her. They kept her in balance, when she was elated and when she felt challenged, they successfully calmed her down. Debbie was able to turn to her colleagues in the USC Entrepreneur Department for guidance also.
An entrepreneur keeps needing "signals" from others around him or her to keep pushing the venture forward. Debbie says she has been very fortunate in this area; the above-mentioned people were able to provide support and guidance when they were needed.
What advice would the entrepreneur give to someone thinking about starting a business?
Debbie’s advice to prospective entrepreneurs is simple: "start with what matters most." Debbie says you need to first understand who you are; doing a personal SWOT analysis is very helpful here. According to Debbie, you have to enhance your strengths and work on your weaknesses; you have to make yourself strong, You have to be physically, mentally and morally tough. Understanding your family, the community you live in and broadly understanding society as a whole is very important. This is because you "build on these institutions." Of course, dollar signs are important to entrepreneurs, but according to Debbie, do what you love and the money will come automatically.
Self-confidence is critical; you need to stay motivated at all times. Debbie says that if homework is done before beginning business, one stands a much better chance of avoiding the common pitfalls commonly made by aspiring entrepreneurs. Turning to organizations, which support the entrepreneurship cause (like BEN) for guidance helps also. Debbie’s advice is simple: believe in yourself and remember that the best is yet to be.
Why was this entrepreneur successful at getting into business?
Ms. Esparza is a unique and special human being; a non-profit entrepreneur who set out with a mission and was able to realize her dream. Her success is directly linked to her method of search, her cognitive characteristics and her ability to deal with social institutions; i.e. the search, psychological and social elements described in The Effable Invention.
The search element looks at search as an effective search for ideas. Debbie’s style of search was again different in that she effectively analyzed herself and felt that there was something missing in her life. Quitting a job that paid more than $50,000 and exploring the country seemed irrational to most, if not all, of Debbie’s family and friends. However, Debbie used this time to discover that she could give something back to society through the University Community Outreach Program. Debbie was then able to realize that she could use her technical finance skills to help local entrepreneurs. Slowly, this paved the way for BEN to be born. Thus, we see "opportunity" being turned into a formal method to develop BEN. A continuum exists in this element of search; ranging from opportunity (gate-crashing the Community Town Hall meeting) to formal methods (growing and preparing BEN to advance further in the future). Debbie shows her genius here in operating on both the intuitive and sensing dimensions which is a rare quality that only the best of the best possess.
The psychological element analyzes what attributes equip and motivate searches. Debbie’s psyche is remarkably balanced. She was able to both visualize the proper direction for BEN and also take it there through a step by step process. She balanced her academic strengths and hands-on experience to give the gift of knowledge to those entrepreneurs who needed it most; those recovering from the 1992 civil disturbance in Los Angeles. Debbie Esparza clearly typifies a genius and portrays the cognitive characteristics of intelligence, ingenuity and articulateness. Debbie also approaches various issues from abstract perspectives. She is very persistent and also able to adapt to change. Managing the growth of BEN is most representative example of this element.
The social element deals with what social patterns and institutions support inventive search. In terms of this element of search, Debbie shows her flexibility. She was able to work alone when UCOP started, she then led volunteering students from the MBA program and now she heads a team of consultants and staff members at BEN. Debbie’s ability to adapt to changing social conditions and sticking to her beliefs shows her true strength of character.
On reading the journal article The Effable Invention, one notices that most geniuses exist at distinct parts of the continuum for all three forms of invention. Debbie Esparza is unique; she operates on different parts of this continuum depending on the situations and conditions she is facing at that time. She is able to effectively adapt to changes in both the micro and macro environments around her.
At this point in time, Debbie is considering various options for the future and the "third career" of her life. Some of these options might mean removing herself from BEN. One thing is certain, whether Debbie Esparza will be with BEN or not, it will survive and exceed its current success as Debbie Esparza has left a legacy and regardless of what she is doing, she will ensure the continuity and survival of BEN.
It was a pleasure to interview Debbie Esparza on two occasions. Talking to remarkable people like her and exchanging ideas with them is the best way to understand "The Entrepreneurial Imagination."
- Nikhil Aggarwal