As our economy reopens, recovers and rebounds from the impact of the COVID-19 pandemic, we have learned much over the past year. From a global health crisis to civil unrest, social injustice and racial inequity, our experiences have shined a bright light on the unique challenges and opportunities facing Delaware’s minority-owned business sector.
Minority business owners face the same challenges as other entrepreneurs — developing a sustainable business plan, understanding the market and competition, and creating products and services that customers need. For Delaware’s Black and Brown entrepreneurs, there are more strains. When exploring difficulties and opportunities for minority business owners in 2021, several issues are evident. Minority entrepreneurs often face systemic racism, problems in securing funding and a lack of social capital on which to draw. However, there is hope in the form of support and resources becoming more accessible.
Whether overt or subtle, racism and discrimination are real issues for minority business owners who traditionally have less access to needed business and management skills. People of color have had lower credit scores, less access to capital and collateral, and may be charged higher interest rates or may be denied more frequently when applying for loans. Although starting businesses at the same rate as White entrepreneurs, there is a vast disparity in profitability, size and early survival rates.
Programs to increase access to capital for underserved populations and support business training and mentorship will increase the number of successful small businesses, while reducing ethnic income gaps.
The area of disparity most significant for minority entrepreneurs is the gap in business financing. While many small businesses have accessed pandemic federal relief and Paycheck Protection Program loans, some small-business owners struggled to navigate funding programs this past year. According to one report, minority-owned businesses were among the last to receive PPP loans.
We’ve observed four primary reasons why lending disparities exist: lower net worth, lack of collateral, poor or no credit, and lack of business planning and resources.
Lack of access to monetary capital is just one barrier facing minority business owners. Another is a lack of social capital. Having powerful networks of advisers, peers, colleagues and other business owners is essential for entrepreneurs wanting to market, seek advice and lean on others.
Further, many businesses are often, and understandably, consumed with serving customers, delivering products and services along with strategic planning and growth initiatives.
In 2020, the Delaware Black Chamber of Commerce (DEBCC) was launched to provide peer support ecosystems, networking opportunities, educational programming and other resources to foster deeper connections between Delaware minority and nonminority business owners.
Significant opportunities are coming to Delaware. The DEBCC has partnered with Interise, a national not-for-profit with award-winning small-business programs, to launch EnrichDelaware!
Beginning this fall, EnrichDelaware! will address barriers to entrepreneurship and empower minority business owners to add focus to working on their businesses, obtaining training and resources and achieving growth. This will strengthen the minority business community along with Delaware’s business sector at large.
The in-person program is designed for small-business owners who want to get out of isolation and get to the next level of growth. EnrichDelaware! is powered by StreetWise “MBA,” an award-winning, impact-driven business-growth program created by Interise.
Using a peer-based learning approach, industry experts, business peers and the instructor will provide insights, strategies, motivation and accountability. This work will includine how to compete for procurement opportunities and meet purchasing demands with anchor institutions. At the end of the program, participants walk away with an individualized Strategic Growth Action Plan, outlining the steps required to achieve their business goals.
The seven-month program requires no previous degree and will begin in fall 2021. This free initiative is provided by DEBCC with the support of TD Bank to empower business growth. Eligible business owners are located in Delaware, have a state license, have been in business for at least three years, have annual revenues of $125,000 to $10 million and have at least one employee besides the owner. Space is limited to 20 business owners.
Navigating today’s economic landscape requires business owners to focus on growth along with carrying out their mission statement. The key to growing your business is to focus on working on it at the same time as working in it.
Ayanna Khan is founder, president and CEO of Delaware Black Chamber of Commerce, which aims to help small businesses connect with larger companies and one another, provide business-development training and education, and raise awareness about Delaware’s Black business community.
