Traditionally, people of color and women have been in the minority as business owners. Now, the number of minority-owned small businesses has skyrocketed. Research shows more black women are starting businesses than white women or white men; and throughout the past decade, minority businesses accounted for more than half of the 2 million new U.S. ventures started.
As minority-owned businesses start to angle their way into representing a large swath of the American economy, there are ways for people of color and women to capitalize on this momentum and move from strength to strength. Building a robust toolkit to both strategically run and fund their businesses can help minority business owners not only succeed but also thrive and continue to grow.
Tap into the growth mindset
Minority business owners usually have to overcome more hurdles in their paths to building their small ventures. This has never been more clear than during the Covid-19 global health crisis, as minority business owners were disproportionately affected.
Although this has been trying, many successful women and entrepreneurs of color have tapped into their resilience and growth mindsets. Now, as the economy stabilizes, keeping this grit and determination at the forefront can help minority business owners thrive.
What is the growth mindset? As opposed to those with a fixed mindset — people who believe they are naturally gifted and know the way forward — entrepreneurs with a growth mindset believe they can enrich their talents through development, feedback and strategy. These growth-minded entrepreneurs tend to accomplish more. They are resilient leaders, and research shows they often run organizations with happier employees.
Even as minority business owners encounter setbacks or challenges, focusing on resilience and tapping into a growth mindset can help them thrive.
Learn from community
Networking is extremely important for all business owners but can be especially beneficial for minority business owners. Communities of like-minded entrepreneurs who have faced similar challenges or roadblocks can help others with similar experiences and identities share ways to overcome difficulties and succeed. Luckily, these communities are more robust and visible than ever.
As a first step, minority business owners can connect with their local governments or business-owner associations to find out what kind of resources are available. It may also be beneficial to directly reach out to other minority business owners in their communities with shared identities. Although it may be a little nerve-wracking to take initiative, forging one-on-one relationships can help you share valuable experiences, and may even inspire you to create your own local organization to benefit other entrepreneurs in your community.
Seek out targeted programs
The number of resources created specifically for minority business owners is growing. Women and people of color have options for different kinds of business support to find guidance as entrepreneurs, and also secure their financial futures.
Resources range from the local to the national. Many town and city governments have grant programs for minority business owners, especially in economic development areas. On a broader level, national programs include minority-focused business accelerators and grants as well as identity-specific professional development and networking organizations, such as the Black Business Association. The U.S. Small Business Administration and U.S. Department of Commerce also offer resources, such as SCORE, the SBA 8(a) Business Development Program, and the Minority Business Development Agency.
Plan for future financial success
Short-term stability is important for day-to-day operations, but planning for the long-term is vital to viability, success and growth. Part of this is understanding your options for obtaining capital.
Small business loans, such as term loans and lines of credit, can be a good option. Minority business owners may also want to consider SBA loans and community lending programs, which often have special programs designed to help bolster minority-owned small businesses and help them secure their financial futures. There are often additional resources for minority businesses operating in economically disadvantaged neighborhoods.
With additional funding, minority-owned businesses can plan their futures. Obtaining the capital itself is only one part of the process. The first step for many is to build a relationship with a bank, who can help business owners of all stripes locate the right resources for them, and guide them through the process of applying for funds.
The impact of minority-owned businesses in the U.S. can’t be overstated. They’re vital not only to the overall economy and growing personal wealth among marginalized groups but also to the individual communities they serve. Minority-owned business owners can set themselves up to thrive by engaging with their communities, sharing resources and looking for the best strategic routes to financially succeed.