But starting, maintaining, and growing a small business is far from easy. One in five businesses \u2013 about 20% \u2013 will fail within the first year<\/a>. Thirty percent fail in the second year, and 50% fail by year five.<\/p>\n It\u2019s a vitally important but inherently risky proposition for anyone looking to strike out on their own and launch a new enterprise.<\/p>\n \u201cFor small businesses, sometimes they don’t have second chances,\u201d says Jeyaraj (Jay) Vadiveloo, a professor in residence with the Department of Mathematics in the UConn College of Liberal Arts and Sciences and director of the Janet and Mark L. Goldenson Center for Actuarial Research<\/a> at UConn.<\/p>\n \u201cIf something happens that they have not been able to foresee or prevent, that could be the end of the small business.\u201d<\/p>\n That\u2019s where Vadiveloo is hoping to help \u2013 first in Connecticut, but later across the country and even around the globe \u2013 and he\u2019s leveraging the talent and enthusiasm of UConn students to support vulnerable small businesses that are looking to manage their risks and pursue new rewards.<\/p>\n A Student-Driven Initiative<\/strong><\/p>\n Melonie Jackson \u201923 (CLAS) is an actuarial science student from Hartford. When she learned about the initiative Vadiveloo was launching to pair actuarial students with local small businesses to help them identify and manage risks \u2013 at no cost to the businesses \u2013 she thought about her own community.<\/p>\n \u201cI thought of my neighbors,\u201d she says. \u201cI thought of the many, many small businesses up and down the street that I know got brutalized a bit during COVID. When I saw that he was specifically targeting those, it was like, hopefully we can get more Hartford businesses involved with this. Give back to my neighborhood, in a sense.”<\/p>\n Jackson was among the first actuarial students to join Vadiveloo\u2019s initiative, called the Students for Workers Movement, or SWM<\/a>. The program is modeled after an experience Vadiveloo had in his youth, when American volunteers with the Peace Corps came to teach at his school in Malaysia.<\/p>\n \u201cI had a math teacher, an English teacher, and I was in secondary school \u2013 you\u2019d call it high school level \u2013 and it was like a breath of fresh air to interact with them,\u201d he recalls. \u201cThey were very good teachers, but there was also a camaraderie and friendship. They mingled with the students. I really loved what they were doing.<\/p>\n \u201cAll those people I met at the time when I was a kid, they seemed older, but they were like my students right now. That was the whole Peace Corps way. These were students. And how did they do these wonderful things?\u201d<\/p>\n Like the Peace Corps, the SWM is designed as a student-driven initiative. Its participants are all undergraduates, and so far have all been actuarial students, but Vadiveloo hopes to partner with other departments at UConn in the future to also build more interdisciplinary teams.<\/p>\n Formally launched last summer, the goal of the SWM is to provide risk-management services specifically to vulnerable small businesses, including businesses owned by members of historically marginalized communities, women, veterans, and people living with disabilities, and businesses that largely employ people living with disabilities.<\/p>\n \u201cGenuinely, these are businesses that need help,\u201d says Vadiveloo, but managing risk isn\u2019t always at the top of a small business owner\u2019s to-do list.<\/p>\n \u201cSmall businesses, obviously they have a high failure rate, but it’s wrong to think that the small businesses don’t know where are their risks and where are their opportunities,\u201d he says. \u201cThey know better than anyone else. They know the business. But knowing what risks are and knowing what to do about it are two separate things, and many times small business owners are completely swamped just running their business.\u201d<\/p>\n That where UConn students can enter the picture.<\/p>\n Identifying Risks \u2013 and Opportunities<\/strong><\/p>\n At no cost to the small businesses, teams of students from SWM come in to learn about how the business works, talk to the business owners and managers about their goals and their challenges, examine financial statements, conduct a formal risk assessment, identify opportunities for continuity and growth, and ultimately provide a final report of recommendations of how to mitigate the business\u2019s risks while capitalizing on it\u2019s potential.<\/p>\n Jackson and her initial cohort of fellow undergraduate actuarial science students started working on the SWM initiative during the fall semester, and while they had no shortage of enthusiasm for the project, they faced a big challenge right out of the gate \u2013 convincing small business owners to work with them.<\/p>\n \u201cThere was a high rejection rate,\u201d says Vadiveloo. \u201cThey pick up the phone and call a small business, which is in the middle of things, and say, \u2018Hey, look, we are students, we’re doing this, could you give us your data?\u2019 There was a lot of rejection.\u201d<\/p>\n \u201cWhen we would get together for meetings, I am the person who comes to mind as the person who cold-called and got rejected the<\/em> most<\/em>,\u201d says Jackson. \u201cI just emphasized that this is something that’s free. It doesn’t hurt to have a risk analysis done. It may open their eyes to something new, that they haven\u2019t thought of before. But still, they were just like, \u2018No.\u2019<\/p>\n \u201cAnother thing I heard was, \u2018There’s somebody else who wants your help more than us.\u2019 And you know what? You’re right. So, we just didn’t give up. I guess that’s how we got where we are \u00a0today.\u201d<\/p>\n Ultimately, the students convinced three small businesses to work with them from start to finish \u2013 a Chinese restaurant in Storrs, a bubble tea shop in Storrs, and a barbeque restaurant in Norwich. Six students worked in teams to do their assessments.<\/p>\n Jackson was on the team that evaluated the bubble tea shop, and she and her partner found the owners responsive and really engaged in the process. While a relatively new business in the area, the shop owners have big goals for expansion, which played a large role in how the SWM team approached their analysis.<\/p>\n \u201cI think a big sort of overarching theme that we tried to connect to was that, if this organization has this ambition, we should make sure everything is more controlled so that they can pursue that,\u201d she says, whether that means investing in new industrial-grade equipment, rather than kitchen-grade equipment that may be more prone to breaking down, or having a business interruption insurance policy to help mitigate the risk of a staffing shortage at multiple locations that might lead to a shutdown.<\/p>\n \u201cA lot of it wasn’t mapped out,\u201d Jackson says, \u201cbut it just came from thinking about how we needed to give the best suggestions for this business\u2019s health so that it can last even longer in this Storrs Center storefront.\u201d<\/p>\n Another student, Cathy Chang \u201924 (CLAS), came into the program later than Jackson, but was quickly paired with another student already working with a business she knew a little bit about \u2013 her family\u2019s Chinese restaurant.<\/p>\n But even with her close connection, she still faced challenges accessing and assessing information about the business.<\/p>\n \u201cRestaurants, especially small business restaurants, don’t have the time, and it’s not their number one priority for risk management,\u201d Chang says. \u201cNothing is given to you. You have to ask for it, or you have to find out ways to do it. For one of my data, I compared sit-in customers to take-out customers. That’s not something they\u2019re tracking every single time, so I actually just had to sit at the restaurant for a day and count myself. It’s a lot of work.\u201d<\/p>\n For the restaurant, the team identified potential competition as a risk \u2013 it\u2019s not the only restaurant serving Chinese or Asian cuisine in the area \u2013 but also identified some of the restaurant\u2019s unique dessert options as a potential opportunity to diversity their product offerings and stand out. They also identified labor force issues as potential risks, and suggested potentially using kiosks for check out as a way to reduce the need for a dedicated person running the front of the store.<\/p>\n \u201cThat’s the first step of risk analysis. You identify the risk, and as an actuary, I like to quantify the risk, actually project how much I think this will affect the restaurant\u2019s revenue,\u201d Chang explains. \u201cAfter you do that, the biggest thing is just hedging, or planning a safety measure.\u201d<\/p>\n Planning for the Future<\/strong><\/p>\n At the end of the process, the small businesses receive a detailed report, and the students don\u2019t follow where the businesses go from there \u2013 it\u2019s up to the owners and managers what they choose to do with the information and suggestions.<\/p>\n But in past iterations of the program that Vadiveloo has test run \u2013 he\u2019s been trying to launch a small business assistance program in some form for about 14 years \u2013 businesses that did follow recommendations saw some improvement to their operations.<\/p>\n \u201cIn a prior one-off trial, we did an analysis for a bagel chain, and they followed everything we did, to the letter,\u201d he says. \u201cThey have one branch right where I live in Vernon, and if you go there, they transformed the whole place, and they were so thrilled with our ideas.\u201d<\/p>\n This time around, he says, he\u2019s learned from his past efforts, which is why he\u2019s more optimistic than ever about the program\u2019s future. He\u2019s hoping to partner with local merchant associations, like the Metro-Hartford Alliance and the Hartford Chamber of Commerce, to ease the process of finding small businesses to work with. His goal is to build a pipeline of small businesses interested in the service and to have a team of 15 to 20 students working with two or three businesses each semester.<\/p>\n He\u2019s enlisted the help of the UConn Foundation to make the case for funding to support the students while they work \u2013 right now, the students are all unpaid volunteers, but he wants to change that.<\/p>\n Vadiveloo is also hoping to partner with corporate sponsors, who he says have a lot to gain from learning about how they can meet the needs of a new customer base: the small businesses themselves.<\/p>\n \u201cWhat we are proposing is that we’re going to create a database of all these completed risk management projects for all the small businesses we analyze,\u201d he says. \u201cIf you are a company, you are The Hartford or Prudential or whatever, you want to sell your products and services, a very large, untapped market are small businesses.\u201d<\/p>\n![\"Professor](\"https:\/\/today.uconn.edu\/wp-content\/uploads\/2023\/04\/Jay-Vadiveloo-picture.jpg\")