While all small business owners face challenges, minorities seem to have several that are unique. It may not seem fair, but that is the way it is and you need to know this information to help you avoid the common pitfalls associated with it. There are misconceptions in society still that minorities don’t have the skills to run a small business but you can show them otherwise.
Getting funding for your business can be one of the toughest challenges you will face. You may have a wonderful concept for products or services, but you need money to get results. The world isn’t fair, and unfortunately, bias and discrimination are still taking place at every turn. Finding a network for support and resources is very important. There is more help out there for minorities than you may realize. Such knowledge and assistance can make the difference between your small business failing or thriving.
All small business owners can benefit from finding mentors that will help them to overcome challenges. Learning the right way to forge the business forward is essential. Too many mistakes can cost you all of your money. It can also tarnish the business reputation, making it harder to gain new sales. With a plan of action that is reality, you can lay a solid foundation that allows you to continue to build onward and outward. This can help you to make your dreams of a successful small business to become reality!
It is upsetting that minorities in small business still have to deal with discrimination. It can be in your face or it may be very subtle, but it is still taking place. It can affect your funding, your suppliers, potential customers, and even your employees. While many of these scenarios are illegal, they continue to fall through the cracks. They can be hard to confirm and prosecute, allowing those involved to get away with it.
Such behavior isn’t ethical and it certainly won’t help you to move your small business concepts in the right direction. Put your foot down where you can to show you won’t put up or ignore such discrimination. In spite of such concerns, hold your head high, have confidence in yourself, and stay determined to make this work for you.
Networking and Support
It shouldn’t be you against the world when you try to operate a successful small business. Networking and finding support is essential for your own well-being. Minority business owners need to seek out others who also own businesses and who are doing well. They will know the challenges you are facing and they may have some insight to help you cope as well as to overcome such concerns.
They can be both an inspiration and a mentor to you along the way. It can be difficult to find such resources and connections. However, they are out there and you need to make it a priority to find them. Keep in mind, the relationships need to be a two way street. There isn’t room for you to take and give nothing in return. Take your time to build solid relationships with those you can trust. Don’t forget to do your part for new minority businesses down the road too.
There are plenty of studies that indicate minority businesses tend to struggle to secure financing for small business in the USA. Some facts to take into consideration include:
- 17% of small businesses owned by minorities that gross less than $500,000 annually receive loans. However, the same income section for non-minorities is about 23%.
- 1/3 of minority owned businesses grossing less than $500,000 annually don’t apply for any loans. They feel they are going to have them denied due to what they have heard from others so they don’t even bother to fill out the paperwork.
- Small businesses owned by minorities receive about $149,000 on average when they do get a business loan. This is compared to about $310,000 for a non-minority business loan.
- Businesses owned by minorities who do get loans tend to have a higher interest rate, around 7.8%. This is compared to non-minority business loans with an average interest rate of about 6.4%.
There are many resources though for minority small business owners to look into. Many of them are offered by the United States Small Business Administration. It is a good idea to look into them and see what your business may qualify for. Make sure you fully understand the terms and conditions of any business loan offer. Such programs to check into include:
- 8(a) – This is a business development program that can help a disadvantaged business with assistance in the areas of contracts, management, and technical issues.
- Community Advantage – Such loans can offer up to $250,000 for a business that is in a poor economic region.
- HubZone – This program helps both rural and urban businesses to secure federal agency processing.
- Microloans – These are small loans, no more than $50,000.
- SCORE – This mentoring program matches up retired business leaders with new entrepreneurs.
There are grants available through local government agencies, federal agencies, and private companies to help minority business owners with their business endeavors. One of them is Bendetrends and they are committed to helping minority owned businesses secure the financing they need as well as the support they should have in place. There are many funding opportunities through Bendetrends to explore.