For Carol Bliss Furr (left) and Donna Wilmarth, entrepreneurial partners and owners of MV Escapes Concierge in Massachusetts, staying in business during the pandemic required flexibility. (Photo courtesy of Next Avenue/MV Escapes Concierge)
There is no doubt that the pandemic has had a significant effect on America’s small businesses. But minority entrepreneurs – and especially minority entrepreneurs over the age of 50 – have faced unique challenges, as well as some opportunities.
Overall, people of color make up about 32% of the U.S. population, but only 18% of business owners. The racial difference in entrepreneurship is especially true among older owners. A recent survey by Guidant Financial and the Small Business Trends Alliance showed that while 46% of white small business owners are baby boomers (ages 57 to 75), only 28% of minority business owners are are.
Minority ownership was hit hard during the height of the COVID-19 crisis, according to the Federal Reserve Bank of New York. From February to April 2020, the number of Black-owned small businesses fell by 41%, Latinx small businesses by 32%, and Asian-owned small businesses by 26%, while the number of white businesses only decreased by 17%.
Minority entrepreneurship and the pandemic
However, over the past decade, Latino entrepreneurs “have launched small businesses at a higher rate than any other demographic,” Time magazine recently noted.
The news for black entrepreneurs has been both positive and negative lately.
According to the Ewing Marion Kaufman Foundation – which studies entrepreneurship in the United States – 2020 brought an increase in the creation of Black-owned businesses; about one in 250 Black adults started a new business during this pandemic year.
However, the New York Fed found that the decline in income and employment between 2019 and 2020 was more severe for small businesses owned by people of color. And, according to the US Census Bureau, Black Americans own only 2% of small businesses with more than one employee.
For Carol Bliss Furr and Donna Wilmarth, Black entrepreneur partners over 65, staying in business during the pandemic required flexibility. They own MV Escapes Concierge, specializing in event planning, rental property planning and weddings in Martha’s Vineyard, Massachusetts.
“Some of the corporate events we were thinking of doing were pushed back by clients until 2023 due to COVID,” Furr said.
Raising awareness of Black-owned businesses
Networking through local social organizations and word of mouth helped MV Escapes Concierge build and grow a customer base. Being listed in the 2021 Martha’s Vineyard Black-Owned Business Directory, developed by local entrepreneur India Rose, has also helped MV Escapes Concierge stay afloat.
All retailers listed in Rose’s directory were given a sticker to put in their windows, indicating that they were black-owned businesses. Rose said: “After the Black Lives Matter marches, everyone wanted to seek out and support black businesses, and that continued. »
Furr, a former dean and fundraiser at Roxbury Community College, said she and Wilmarth — a former program coordinator at Harvard Business School — started their business with their own savings. “We didn’t want to borrow a lot of money,” Furr said.
Rose, an entrepreneur and business consultant, says access to capital is “the biggest barrier” for most Black-owned businesses.
Rose found that the pandemic provided an opening for some minority entrepreneurs like herself. In 2020, she opened what she calls a motivational sports clothing and accessories company, Sideline Sports.
“Due to the pandemic, many businesses closed their doors, but it also created an opportunity for online and brick-and-mortar businesses as retail space became available,” Rose noted.
Hilary Mason King, the 60-something Black founder of the six-year-old Cleveland company Creative Moves (which helps seniors move and downsize), says the diminishing dangers of the coronavirus have recently been a blow thumbs up for companies like his.
“We have grown over the last year. I think initially people were afraid to move because of COVID,” Mason King said. “Now people are moving again, either to assisted living or to condominiums.”
Like Furr and Wilmarth, Mason King started his own business. “I did not ask for any capital loan,” she stressed.
Helping People Find Black-Owned Businesses
Brothers Michael and Bryan Sadler plan to launch minority-owned businesses in January 2022. They hope to create a free national electronic platform to find, share and review Black-owned or Black-allied businesses.
“We want to be a one-stop solution provider for people who want to find Black businesses through our platform – the Black Business Co. or BBCO,” said Michael Sadler, 31.
He thinks the platform could be particularly useful for older minority entrepreneurs.
“What I found is that there is a ton of passion among people over fifty when it comes to starting a business,” he noted.
The future for minority-owned small businesses is hardly bleak, but experts say there are several obstacles to their success.
A 2021 report from the New York Fed puts it this way: “Businesses of color continue to face structural barriers to acquiring the capital, knowledge, and market access needed to grow. According to the researchers, these small businesses “tend to have weaker banking relationships, perform worse on credit applications, and rely more on personal funds,” noting that minority entrepreneurs face disproportionate challenges compared to white business owners.
“When we think about the loans and capital needed, many minority-led businesses are simply not in the same situation as businesses run by white-identifying owners,” said Nakeisha S. Lewis, associate dean and diversity, actions. and inclusion ambassador at the Opus College of Business, University of St. Thomas in St. Paul, Minnesota (EIX, the Entrepreneurship Innovation Exchange of the university’s Schulze School of Entrepreneurship, is one of the backers funds from Next Avenue.)
And, Lewis added, “the people who get the venture capital (funding) are generally not women, black or Hispanic.”
According to the Minority Business Development Agency (MBDA), over the past 20 years, minority-owned businesses have received an average of $3,379 in new equity investments, less than half the $7,858 for minority-owned businesses. Whites. And a McKinsey & Company report found that only 29% of Black small business owners get a bank loan, compared to 60% of white entrepreneurs.
Advice for minority entrepreneurs over 50
Lewis gave this advice to entrepreneurs of color aged 50 or older (which could also apply to older white entrepreneurs): Stay on top of how customers prefer to pay and what matters to them when they choose where to spend their money.
“What happens if a customer doesn’t use cash or credit card, but wants to use Apple Pay or Google Pay? ” she says. It is important to be able to serve him.
Additionally, Lewis said, “these days, millennial or Gen Z consumers want to know about a company’s social conscience and what’s going on behind the scenes.” So, she noted, older entrepreneurs need to ask themselves: “What are the levers they need to pull to engage with these customers?”
If a company uses recycled materials or volunteers for a nonprofit, for example, that’s something they should communicate to potential customers, Lewis said, because it could add value to their business .
Lewis urged more than 50 minority entrepreneurs to also work on how they communicate their branding. “You have to understand what you’re bringing to the market,” she said.
Finally, Lewis advised people of color who hope to become entrepreneurs to take advantage of local and national resources that can help them start and grow a business. “Especially after the killing of George Floyd, more institutions are making a greater effort to help minority entrepreneurs,” she said.
See if there is a chamber of commerce targeted to local minority businesses, Lewis said. And, she recommended, get free mentoring from SCORE, the national organization of retired business executives affiliated with the U.S. Small Business Administration.
Mason King attributes part of her company’s success to the time she spent using the Cleveland Chamber of Commerce and SCORE mentors.
But she also credits referrals with helping her business grow.
“Word of mouth is still very important in Eastern Ohio, especially when family members are trying to help elderly relatives who may be frail,” Mason King said. “They want someone they can trust. They are happy to see a minority and women-owned business.
Editor’s Note: This article is part of America’s Entrepreneurs, a Next Avenue initiative made possible by the Richard M. Schulze Family Foundation and EIX, the Entrepreneur Innovation Exchange.