- November 26, 2019 7:00 am
Starting a small business is considered the American dream for many people. In fact, two-thirds of Americans dream of opening a small business, according to a 2018 survey. While this comes with inherent challenges for anyone, it can be especially daunting for minority entrepreneurs who might encounter difficulty obtaining startup capital, a lack of mentors, and social prejudices. Let’s take a look at the current state of minority small business in this country, and how to best support these enterprises.
Here are some key statistics that provide perspective on the number of businesses owned by minority individuals, as well as some overarching trends.
It’s clear that the number of businesses owned by minority individuals is on the rise, and this demographic is looking to start businesses all over the US. There’s been noticeable growth throughout the 21st century, and as the minority population continues to increase, they’re likely to be an even bigger force in the future.
Women account for a growing share of small business owners. And women of color are becoming increasingly interested in starting their own businesses. There’s also been significant growth in the number of African Americans and Hispanics becoming entrepreneurs. However, without proper support, many of these individuals face an uphill battle. Resources for female entrepreneurs are available at many stages of the business formation process, but community support and public education can still go further to fuel their success and swell their ranks.
Nearly a quarter of all Americans now work in the gig economy — meaning they are earning at least some share of their income through self-employment. However, it is one thing to work for yourself, but another thing entirely to get an employer identification number (EIN) and start providing jobs for others through your business. Minority entrepreneurs play a vital role in economic growth and community development not only because they are productive members of the economy, but because they help extend the same opportunity to others by creating jobs. These businesses often provide needed or wanted goods to their communities that may not exist otherwise.
New Americans, in particular, are behind this trend: immigrants are twice as likely as native-born Americans to start a business. This is especially critical in impoverished areas with high unemployment rates where amenities are lacking. These individuals can act as a catalyst for positive change that strengthens the local economy and creates a better quality of life for everyone.
Minority small business owners also have unique perspectives and experiences to bring to their businesses. They may come from a variety of different backgrounds, which is ideal for creating new processes and products and can help revitalize stagnating industries. Given that the U.S. is a nation of immigrants and a cultural melting pot, you could argue that diversity has been a big part of historical success. When minority entrepreneurs thrive, it trickles down and has a positive impact on the country as a whole.
Finally, they can help encourage other minority entrepreneurs. The experience that minority entrepreneurs gain tends to make them perfect mentors for others looking to pursue their own small business ventures.
It’s important, as an entrepreneur and as a patron, to support these businesses. Here are some specific ways you can encourage and empower minority business owners.
Getting started as an entrepreneur often comes with many challenges. Considering you’ve likely been in their shoes, providing these individuals with advice and guidance can be huge. Point them to useful resources that can facilitate growth during the initial stages of development. This might include places to obtain business funding, tools and software for staying organized, and marketing mediums. Or let them know about any mistakes you made when getting your start and what you would have done differently.
Getting direction from someone with experience can make a big difference for a fledgling startup. Having a mentor provides new entrepreneurs with the input they need when getting their business off the ground and ensures they have someone to turn to when they run into obstacles. Being willing to offer your own experiences as an entrepreneur and serving as a dependable resource is another excellent way to show your support.
When given the choice between making a purchase from a local minority-owned business and a major chain, when possible, opt for the former. Be sure to recommend positive experiences to friends and family to increase the number of word-of-mouth referrals. Make an effort to build rapport with minority entrepreneurs, as this can help strengthen relationships and build a tighter community.
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