Molly Rose Murphy opened Queen City Music Studios with $500 in savings and a $4,000 grant.

Five years ago, Molly Rose Murphy walked into the door of the Staunton Creative Community Fund with an idea for a business but a less than perfect credit score. She was a professional musician who’d played up and down the East Coast; like many creative professionals, she’d been cobbling together an income for years.

“She was really, really nervous,” remembers Debbie Irwin, the Fund’s creative director. “She didn’t even want to talk to us about it.”

A business boot camp taught Murphy the basics and helped her save $500; a state program gave her a grant of $4,000 on completion. From that tiny investment, which purchased laptops and instruments for kids to practice on, Queen City Music Studios was born.

“I’ve got a lot of good people in my corner,” Murphy says.

She works with nine people on a part-time basis, and just expanded the hours for three of them to cope with the increased demands in a COVID-19 world. And Queen City is working with a local investor on a plan to expand.

Murphy’s story illustrates how little money it takes to start or save a small business, and how meaningful the action is. “When you give someone the tools of entrepreneurship – they empower themselves,” says Irwin.

A Long Climb Back

The economic toll of the pandemic on small businesses is disastrous: The number of active business owners in the United States plummeted by 3.3 million from February to April, or 22%, according to the National Bureau of Economic Research, with the damage worst among businesses owned by people of color and women. As the virus continues to surge, the capital crisis for small businesses is likely to get worse, as banks tighten their lending standards and the effects of the stimulus fade.

But I’ve also found in my reporting – lately across the Mid-South – that saving small business is possible, and even easier than we think. Small businesses are eminently flexible; indeed many of those that are closed during the pandemic may return, or the owners may restart other enterprises.

It’s a question of getting them what they need. The dollars involved are not nearly as big an obstacle as changing our mindset, so that the heroes we appreciate aren’t the cowboys of the tech world or the billionaires who seek glossy magazine covers, but the other entrepreneurs building communities like Staunton/Waynesboro.

The new narrative is rising. Communities, acting together and with the support of the federal government, can do a great deal to save their own small businesses, and therefore, themselves.

Among the initiatives that helped Staunton/Waynesboro renew its small business community over the past decade are a revolving loan fund to help entrepreneurs, an angel investment network that has put $8 million into 20 businesses, and a dedicated core of community lovers who shop, build and invest locally. The population, the most basic measure of a community’s health, grew 5% in Staunton between 2019 and 2010.

This week, Irwin’s organization was awarded $1 million by the state of Virginia to promote entrepreneurship throughout the region.

No Business Left Behind

“That’s the beauty of communities like the Shenandoah Valley,” said Irwin. “We have high-tech growth startups … we have game makers who sell millions of units of their games. We also have the Main Street entrepreneurs. Every single one of those entrepreneurs is pivotal to creating the community where I want to raise my kids.

The beauty is in recognizing that all of those people have importance.”

Staunton/Waynesboro is one of the communities highlighted in a book I’ve been working on with venture capitalist and philanthropist Seth Levine, which is a collective call to action to save entrepreneurship. Even before COVID, entrepreneurship in America was declining – in part because our focus on tech entrepreneurship distracted us from the real work of building an economy that enabled people to start businesses.

The startup rate in America, the share of companies 0-2 years old, fell from more than 12% in 1980 to about 8% in 2015[1]. That’s one way to measure entrepreneurship, though probably an incomplete one. The number of people employed by small businesses — while still more than 40% of the workforce — fell by one-third between 1987 and 2015.

A Different Narrative, Not Tech Focused

Seth and I believe, and write in our book, that part of the reason is that we’ve been distracted by the narrative that dominates the business press – a billionaire here, a $40 million A round there. We’ve forgotten that the vast majority of businesses are started with tiny investments, and need community support to thrive. Venture capital funds a vanishingly small percentage of companies in the United States: Only about .5%, according to research by the Kauffman Foundation (also a sponsor of Times of Entrepreneurship). The largest sources of finance are personal/family savings of the entrepreneur (64.4 percent), business loans from banks or financial institutions (16.5 percent), and personal credit cards (9.1 percent). You can see from these numbers why people of color and women are so under-capitalized as business owners. They have been shut out of family wealth accumulation for generations.

There are many good ideas for how to renew entrepreneurship, a movement that seems likely to win a new sense of urgency now. Two advocacy organizations that I’ve found helpful:

Chamber of Commerce’s Save Small Business Initiative

Main Street America

Right To Start

I believe three levels of action are required for any of these initiatives to make a difference:

• Individual action. Buy local does make a difference – we’ve learned that now. The flip side is that it’s really shitty to walk into a small business, pick out what you want and order the item from Amazon to save a few dollars.

• Big efforts to change policy and, especially, funding infrastructure. Those will need to happen at the level of big foundations, the federal government and states. The PPP system revealed the cracks in our lending system for small businesses. Big banks flubbed. Small banks and community lenders, which had been hammered over the past few decades, shined. Their deeper knowledge of customers and accessibility meant that they were able to implement the federal aid programs faster.

“The PPP crisis gave them a second life,” said Rohit Aurora, CEO of Biz2credit.

Now the question is whether they have the resources and mindset to acquire new fintech risk management tools. Meanwhile, fintech players stepped up, but can they adapt fully to the needs of the small business community? Aurora says they can.

“Facebook and other players know more about you than your family and your neighbors,” he said. “Using that data, fintech players can create a fully customized experience that doesn’t require a lot of hand-holding.”

Reshaping Small Business Finance

• Communal action. This is the most important, and, possibly, neglected kind of action. Grassroots campaigns to save small business have the power to shape both individual actions and large-scale policy. Getting involved in a local organization or being part of an initiative like an angel network doesn’t have the instant gratification of an action you take as an individual. It also doesn’t offer the same kind of ego pump that that comes from working on projects and companies that scale in terms of dollars and numbers.

But the lasting change, and the richest rewards, come from the work like what’s happening on the streets of Staunton/Waynesboro.

When I reached Debbie Irwin yesterday, she was, she told me, walking on air, because of the new $1 million grant. That’s not a lot compared with the trillion dollar sums I’ve been writing about lately. (In fact, $1 million ought to be doable sum even for cash-strapped state and local governments. But it will likely seed dozens or hundreds of businesses. Some of the money will go to building co-working and maker spaces. Some will pay for acceleration and training for rural entrepreneurs, and a portion will hire ecosystem builders.

The changes that are made through entrepreneurship and small business are lasting. Not all the businesses will survive, but the sense of agency and empowerment will.

Murphy has become a community leader in Staunton. Tuesday, she was approached by a local organizer to headline a campaign – Staunton Busks — asking local musicians to play outdoors, where restaurants have moved their seating.

“We’re building a community of musicians to play outside,” Murphy said. “That feels really rewarding, all these entities working together for a common goal.”

This story and others on New Builders Dispatch are made possible by a sponsorship from the Ewing Marion Kauffman Foundation. The Ewing Marion Kauffman Foundation is a private, nonpartisan foundation that provides access to opportunities that help people achieve financial stability, upward mobility, and economic prosperity – regardless of race, gender, or geography. The Kansas City, Mo.-based foundation uses its grantmaking, research, programs, and initiatives to support the start and growth of new businesses, a more prepared workforce, and stronger communities. For more information, visit and connect with and