Feature of the Week

December 10, 2012 12:00 am

Prisoners with an eye for profit learn lessons from behind bars

American Prison©Alamy

Different perspectives: MBA volunteers are helping some prisoners learn how to start their own ventures

Growing up in a poor family in Texas, Harvey Mai used to watch food trucks in his neighbourhood selling Mexican fare and dreamt that one day he too would start a food truck business.

Last month Mr Mai, 26, got his wish: his first food truck, BanhMi Express, which specialises in traditional Vietnamese sandwiches, opened for business. He obtained loans of $30,000 to start the venture and projects revenue of almost $100,000 in the first year. It may sound like the standard bootstrapping of any would-be small business owner, but Mr Mai’s entrepreneurial tale is anything but typical. At the age of 20, Mr Mai spent three years behind bars for aggravated assault.

Determined to make the most of his prison time, he enrolled on the Prison Entrepreneurship Program, a six-month course run by volunteer executives and MBA students that teaches inmates how to develop and launch their own enterprises. MBA students work one-on-one with participants helping them hone their business plans by providing feedback via email.

Founded in 2004, the programme has helped hundreds of inmates such as Mr Mai to find stable employment and start their own businesses.

“I made a lot of mistakes when I was younger,” says Mr Mai. “When people my age were going off to college, I was going to prison. PEP has given me a huge opportunity.”

More than 800 inmates have graduated from PEP. Every one found a steady job within 90 days of being released from prison and 106 have started their own ventures. Most of these are in the service industry, such as construction and home repair.

One graduate started an online speciality car parts company based in Irving, Texas, that last year made more than $1m in profit. Another started a print shop in Houston that made $500,000 last year.

The programme also helps curb government spending on prisoners, according to Jeremy Gregg, the programme’s chief development officer. The programme’s recidivism rate has held firm at less than 5 per cent, while that in Texas is 25 per cent.

“This programme is not just about charity,” says Mr Gregg. “Texas spends $21,000 per year per inmate. If we graduate 100 guys, we are saving the state of Texas $5m-$7m in future incarceration costs [because graduates are less likely to reoffend.]”

Several states, including Virginia, have begun pilots based on the Texas programme. Virginia’s programme enlists more than a dozen MBA students from UVA’s Darden School of Business as volunteer coaches.

“Students learn about the many obstacles that ex-offenders face upon release – social, institutional and economic,” says Gregory Fairchild, associate professor of business administration at Darden. “And they also overcome their own fears and stereotypes. Let’s face it: teaching behind bars is intimidating.”

The programme includes courses on finance, accounting and operations. Students debate Harvard Business School cases and take a Toastmaster workshop to hone their public speaking skills. Dostoevsky’s Crime and Punishment is required reading. At the end of the programme, inmates create a business plan with a 12-month operating budget. Volunteer MBA student coaches receive sections of an inmates’ business plan weekly via email. They edit the business plan and provide market research.

Graduates receive a college Certificate in Entrepreneurship from Baylor University’s Hankamer School of Business. “It’s a real college certificate that doesn’t say ‘prison’ anywhere on it so that it is most useful in job searches,” adds Mr Gregg.

Competition to enter PEP is stiff. With 2,500 applications for about 150 places each year, Mr Gregg recruits prisoners who were hardened criminals – those who were gang leaders, or who had run a drugs ring.

“They have already shown leadership potential: they understand how to retain customers and they understand profit margins ... We’re trying to take those natural instincts and shift them into something good.”

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