How Minority-Owned Businesses Can Be Better Supported: Recommendations for Minority Business Support Organisations

Figure 21. Four Action Framework for Minority Business Support Organisations

Build Better Ecosystems

Cities across the country need to develop ecosystems that specifically support minority entrepreneurs. It is not enough creating one business development program, hosting one pitch competition or giving away one grant. It is also not enough just creating an ecosystem for all startups. Minority business owners need their own networks, agencies, programs, and funds that focus on them and understand their struggles, challenges and experiences, while also allowing them to connect and engage with the rest of the community. You start with reaching out to individuals who are investors or who might be interested in becoming angel investors, those with disposable income, who want to give back. Then you work on getting the support of local governments, academic institutions, and other businesses. Investors and governments can provide funding for the minority-owned businesses. Universities and colleges serve as knowledge partners and other businesses can become guest speakers, mentors, advisors, and much-needed role models.

Listen to Minority-Owned Businesses

Stop building for the sake of building something. Within my conversations with minority business owners, they expressed that it feels like minority business development programs exist for PR reasons or to tick off a box. In participating in these programs, they feel like there is no substance and that they do not actually help their businesses. Eric Ries tells us that we must build, measure and learn, a framework for quickly and cost-effectively establishing and constantly improving the effectiveness of new products, services and ideas (Ries, 2011). Start by listening to minority-owned businesses and stop doing what you think they want. Build and co-develop your products, programs, initiatives, and events with minority entrepreneurs and after piloting them, measure whether or not they are successful. In speaking to business owners for an hour at a time, I learned that they need help with their finances, that they want professional development, and want to learn how to run the day-to-day operations of their businesses. In listening to them, we work toward not only supporting minority-owned businesses but in also helping them scale. 

Diversify Your Offerings and Partner with Other Organisations

There is a lot of duplicative work happening; a lot of organisations doing the same things and serving the same groups of people. As a community, you should work together to map out your ecosystem and understand where your gaps are. Because resources are limited and finite, you should spread out your resources instead of all doing the same work. One of my favourite tools is the Business Model Canvas because it allows you to describe, design and pivot your business model. The canvas puts forth nine building blocks to build a better business model. Two of these blocks are for key activities and for key partners, which ask you to think about what you are good at and what you are going to focus on, while key partners ask you to consider who to partner with to fill in the gaps. Using the Business Model Canvas could be useful for minority business support organisations so that they can figure out what their areas of expertise are and who they can refer minority-owned businesses to for other services.

Have a Presence and Be Relatable

Look at opening several locations across the country so that you can have a presence in the community. Having outreach centres that are not fully staffed may be a good option for larger organisations so that you can be close and also make it easier for business owners to come in for help, while also building brand recognition. For smaller organisations, make sure to have an online presence so that you can build a community and possibly host ongoing events within cities and areas of interest to increase engagement.

Likewise, make sure that your staffs mirror the populations you are working with, ensuring that different groups are represented so that clients can feel welcome and comfortable.  Representation and diversity and inclusion are hot topics at the moment, which a lot of companies have gotten wrong. Customers want to feel like they are being thought of and like they are included. In my conversations with minority business owners, they communicated that they do not feel like they have role models who look like them and that more often than not, guest speakers and successful business owners are brought in to conferences or events to talk to them about their journeys to success but those business owners often started at different levels and have access to resources that most minority business owners do not have access to.  

Look to Other Examples

The city of Philadelphia in the United States, a majority-minority city, for instance, is really paving the way in how they support minority-owned businesses in their own backyard. They are currently working on passing policies and initiatives that help encourage minority business development and change how the city does business. For example, since implementing the Philadelphia Beverage Tax in 2017, which places a 1.5 cent per ounce tax on sugary, artificially sweetened drinks, they have been able to raise over $130 million, which has gone to Pre-K programs, community schools and what they call ‘Rebuild.’ The Rebuild project focuses on promoting equity and fairness throughout the city, making improvements to public places and promoting diversity and economic inclusion. Through this on-going project, minority-owned businesses will be able to easily take advantage of government contracts. Best of all, they have increased the Request for Proposal (RFP) threshold, meaning if products or services are under a certain amount, business owners do not need to go through the formal RFP process, which most minority entrepreneurs agree is slow, rigorous and complicated. This will make it easier for minority-owned businesses to work with the government. Philadelphia is also raising the percentage of contracts that are set-aside for minorities to 25% or more and through Rebuild Ready, minority entrepreneurs will be trained and supported throughout the entire contract process.