BAK USA sign among their east side neighborhood <span class='image-credits'>Nancy J. Parisi</span>

New business startups help lift Buffalo’s residents out of poverty

Business incubators including the Buffalo Niagara Medical Campus, Invest Buffalo Niagara, Buffalo Manufacturing Works, and other organizations have helped jump start this area’s once lagging local economy. New York state’s Buffalo Billion program has invested $1 billion into economic development projects in Western New York. Business competitions such as 43North have made the Buffalo region more attractive to potential investors and entrepreneurs. The Bureau of Economic Analysis estimated that Buffalo produced more than $58 billion in goods and services in 2016. Based on this data, Buffalo is fast becoming one of the nation’s economic powerhouses.

At the same time, the City of Buffalo continues to see a gap between high and low-income residents. According to the U.S. Census Bureau’s American Community survey of 2016, Buffalo has 43,348 households with incomes lower than $25,000 per year, and only 5,952 making more than $150,000 a year. While downtown is filled with new and rehabbed lofts and buildings, major sections of the city such as the East Side struggle with a large concentration of poverty, abandoned homes, and disinvestment.

New business startups can play a role in helping residents climb out of poverty. By training new employees and providing jobs to previously unemployed or underemployed workers, these companies can help ensure that Buffalo’s recent renaissance reaches all corners of the city. There are, in fact, new firms that are locating in Buffalo’s long-neglected neighborhoods and giving hope to residents often ignored by the area’s economic decision makers.

One such company is Bak USA. Danish immigrants JP and Ulla Bak started this social enterprise that builds mobile computers in downtown Buffalo in 2014. The couple came to Buffalo after building a business in Haiti that hired local people to manufacture tablets for customers in Africa. The Baks were looking for another underserved area where they could replicate the model they used in the Caribbean. New York state’s START-UP NY program brought them to the Queen City. Bak USA opened in the Compass East Building on Buffalo’s East Side in January 2015.

Since then, Bak USA has filled the entire fourth floor of the Compass East Building and hired 96 people, including many immigrants and refugees. Each worker assembles a mobile computers at their workstation, and Bak USA sells these computers to customers at an affordable price. The company’s business model combines advanced manufacturing with social responsibility. Employees learn productive skills, and they also make a living wage. Bak USA has proven that Buffalo’s revival can include those left out of the area’s recent economic upswing.

Another organization helping to reduce Buffalo’s income gap is The Foundry, a business incubator and creative space where people build things. The Foundry, like Bak USA, is located on Buffalo’s East Side. Megan McNally, executive director of The Foundry, became interested in carpentry after she graduated from college and decided that a white-collar career wasn’t for her. She learned woodworking techniques and worked at different sites around the country before coming to Buffalo.

McNally saw a need for a business incubator that provides space for growing manufacturers and teaches students valuable skills in the construction and building trades. The Foundry aims to stem the high dropout rate among students in the city of Buffalo by training them in woodworking, metalworking, welding, and other skills. McNally points out that educators often try to convince students that everyone needs to become a doctor or lawyer.

Students can come to The Foundry and take classes where they learn to create things. It gives them the opportunity to learn something they didn’t know and consider a different career path they hadn’t thought of. According to McNally, the Foundry “exposes them just that one time … a light bulb goes off, and maybe it changes their mindset … when they formerly weren’t interested in that kind of stuff.”

This can be an eye-opener for many young adults who are poor and racial or ethnic minorities. McNally maintains that “It doesn’t matter who you are; it’s the skill set you can provide.” The Foundry trains about 400-500 students per year in the building trades and crafts. Not all of them will stay with the program, but the incubator produces a steady supply of graduates with in-demand skills.

Small manufacturing startups can also find a place to grow their business in a supportive environment. Foundry manufacturers have built benches for Buffalo’s Outer Harbor and created an Adirondack chair out of driftwood. Other partners made hockey pucks, beauty products, and bicycle frames. The Foundry teaches young adults from disadvantaged backgrounds valuable skills that employers need.

A third economic development incubator working to reduce Buffalo’s poverty rate is the Westminster Economic Development Initiative. Located on the West Side of Buffalo, Westminster Presbyterian Church founded WEDI in 2006 to improve the quality of life for West Side residents. WEDI helps refugees, immigrants, and other low-income residents overcome economic barriers by offering education programs, microloans, and business training.

Since its founding, WEDI has provided more than 110 microloans, totaling more than $600,000 to small businesses in Buffalo. In a one-year period from 2015-2016, WEDI clients created 96 new jobs and retained 127. After seven years of lending, 88% of the new businesses WEDI financed still operate, and most turn a profit after three years.

From 2012 to 2016, more than 800 entrepreneurs took advantage of WEDI’s business counseling services. One of the organization’s most visible success stories is the West Side Bazaar. A market and business incubator that specializes in immigrant entrepreneurs, the Bazaar helps first-time business owners establish a foothold in their new home. The Bazaar has hosted 44 small businesses, and created and retained more than 50 jobs.

Business startup incubators and organizations including Bak USA, The Foundry, and the Westminster Economic Development Initiative are all making it easier for Buffalo’s low-income residents to learn new skills, get new jobs, and start new companies. They’ve shown that business startups can create an economic powerhouse within all the neighborhoods of the city.

Read more articles by Jeff Dahlberg.

Jeff Dahlberg is a freelance writer and the author of “Not Just Snow and Chicken Wings: Positive Stories About Buffalo’s Rebirth.” He was born and raised in Western New York. A University at Buffalo and Second City graduate, he longs for the day when both the Bills win a Super Bowl and the Sabres win a Stanley Cup.
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