Opportunities for women and minority-owned small business

Did you know that 1 million—around 18.3%—of all U.S. businesses in 2018 were minority-owned? Did you know that women own or co-own 45% of all companies in the United States?

In 2020, because of federal support programs, minority businesses secured nearly $8 billion in contracts and financial transactions.

If you are a woman or a member of a minority group launching a small business, many opportunities are available to help you fulfill your business goals.

What kind of business are you planning to launch?

Before launching or expanding your small business, it’s a good idea to look at your business goals and think about how you will best serve your customer base and find the best funding opportunities.

There are two types of business models. One may fit your business better than the other. Let’s take a look at both.

Employer

An employer is a small business that has paid employees. A local restaurant or a fast-food franchise are examples of small employer businesses because they hire a staff to take orders, cook, and clean.

Non-employer

A non-employer is a small business that does not have paid employees. Most non-employers are self-employed individuals or independent contractors such as artists, for example.

According to the Small Business Administration [link: https://www.sba.gov/] (SBA), four in five small businesses are non-employer businesses. While non-employer businesses comprise industries like the performing arts, these businesses appear in almost every industry.

Deciding whether you can offer products and services without hiring employees will depend on your business. Either way, opportunities are available for your business.

What opportunities are available for my business?

There are various federal, state, local, and private programs designed to assist new and established women and minority employers and non-employer small business owners.

Some of these programs have been around for several years and have helped support new businesses across the United States.

Most recently, during the COVID-19 pandemic, federal agencies such as the Small Business Administration have taken additional steps to assist women and minority business owners via the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Small Business Administration (SBA) loans

The SBA offers loan programs for women-owned small businesses. SBA partners offer advice and counseling to help female entrepreneurs find the appropriate loan for their business.

The SBA recently announced grant funding and the historic launch of 20 news Women’s Business Centers (WBC) across America to serve rural, urban, and underserved communities alike.

In addition, the SBA’s Office of Small Business Development Centers makes special efforts to reach minority members of socially and economically disadvantaged groups, veterans, women, and the disabled.

Minority Business Development Agency (MBDA) grants

In October 2020, the MBDA awarded $5.1 million in grants to 11 organizations under three Agency initiatives – the Entrepreneurship Education for Formerly Incarcerated Persons, the MBDA Enterprising Women of Color Business Center, and the Inner-City Innovation Hub programs, which provides education to entrepreneurs and start-up businesses with innovative products or services in inner-city areas with high concentrations of minority persons and minority-owned businesses.

Private source capital and crowdfunding opportunities

Private companies are also making efforts to reach out to underserved small businesses owners. Depending on your sector, several venture capital and crowdfunding opportunities are available to new business owners. Some of these programs are designed to address current socio-economic challenges. Well-known companies have launched initiatives to provide funding and education to minority entrepreneurs, according to The Wall Street Journal.

Resources for specific minority subgroups

If you are part of a specific minority group, consider applying for opportunities designed to support your group, such as women veterans or Native Americans.

For example, the SBA’s Women Veteran Entrepreneurship Training Program (WVETP) provides entrepreneurial training to women veterans, women service members, and women spouses of service members and veterans as they start or grow a business. SBA funds these entrepreneurship training programs available exclusively to women veterans through grants.

The SBA’s Office of Native American Affairs aims to offer full access to business growth and expansion tools for small businesses owned by Native Americans. The Office, which has locations across the Unites States, engages in tribal consultations, produces promotional materials, and participates in national economic development conferences.

Resources in your community

Find a financial institution representative or expert in your community who can provide guidance and help you learn more about programs that target entrepreneurs who are women or are part of a minority group.

Should I become certified as a Minority Business Enterprise (MBE)?

In the United States, a minority business is defined as a company that is at least 51% owned and operated by an individual who is at least 25% African American, Asian, Hispanic, or Native American. If this describes your business, you may want to consider getting your small business certified as a Minority Business Enterprise (MBE).

Many times, organizations search specifically to work with minority-owned businesses to meet goals and federal mandates.

Other advantages to getting certified as a minority-owned business include the following:

• Access to federal contracts: Many times, federal agencies need to give a set number of contracts to certified minority-owned businesses, leading you to new opportunities.
• Tax incentives: Federal tax incentives are available to companies who use minority-owned businesses, which may put your company more in demand.
• Increased funding opportunities: Once you are certified as an MBE, you will be eligible for increased access to funding. You may be able to find additional programs for grants, loans, and mentorship.

What other steps can I take to find opportunities?

Selecting the best resources to help your business launch, expand or recover from an economic downturn requires an understanding of where your small business fits within your target market as well as your community.

As an entrepreneur, there are a few first steps you can take to find funding opportunities.

• Find educational resources. This could be a great time to enroll in an educational webinar or entrepreneurship training program for new business owners that could help you develop a strong business plan and outline your next steps.
• Reach out to your community. Reach out to your local Small Business Administration (SBA) office or community bank, or launch a crowdfunding campaign designed to generate interest in helping you grow your business.
• Seek out pandemic assistance resources, if applicable. Has your business been affected by the COVID-19 pandemic? If so, consider reaching out to your local SBA office or Chamber of Commerce for information regarding pandemic assistance programs designed specifically to help local small businesses recover from the pandemic.

Keep in mind: Different programs will list a variety of specific requirements to apply. Pay close attention to these prerequisites as you select the right program for your business. To best understand the terms, take time to carefully read the online and print literature provided by government agencies and organizations that may be able to provide you with funding and other support.

Key points

1. Do your research. Search both online and in your community for any up-and-coming grant programs or other funding opportunities for your small business.
2. Seek out new programs. New programs have been established specifically to assist women and minority-owned small businesses severely impacted by the pandemic.
3. Consider where your business fits. Various public and private programs target small business owners from specific, underrepresented groups such as women, veterans, and Native Americans to economically disadvantaged areas.

Next steps

Now that you understand how to find and decide on the best sources of educational and financial support for your small business, it is time to act.

• Familiarize yourself with available programs. Review your list of public and private programs as well as opportunities offered at local financial institutions that you and your small business may qualify for.
• Understand application requirements. Visit the websites for each of these programs to get a good understanding of their requirements or call the agencies or organizations to discuss the possibilities for your business.
• Provide the correct information. If you meet all the requirements for applying, collect all relevant documents and personal information.
• Be aware of deadlines. Pay close attention to application submission deadlines. If you are applying for a loan or grant, note the due date on your calendar. Make sure you have answered all the questions and met the requirements well in advance of the deadline.

The information in this article was obtained from various sources not associated with Adirondack Bank. While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. Adirondack Bank is not responsible for, and does not endorse or approve, either implicitly or explicitly, the information provided or the content of any third-party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. These suggestions are not a complete list of every loss control measure. Adirondack Bank makes no guarantees of results from use of this information.

Article written by EVERFI