Today, minority groups are well on their way to becoming the majority of our workforce and a large part of the nation’s entrepreneurial endeavors.
According to the Minority Business Development Agency (MBDA), the number of U.S. minority business enterprises more than doubled between 2002 and 2012, totaling around 8 million.
But starting and running a business can sometimes seem particularly challenging if you’re a minority business owner.
A Forbes study shows minority business owners “typically encounter higher borrowing costs, receive smaller loans, and see their loan applications rejected more often,” and the MBDA claims that though minority-owned businesses make up 29% of the market, only 11% have paid employees.
But that should never stop you in your tracks. Fortunately, there is a great wealth of resources for minority-owned businesses seeking specialized advice or assistance on getting started, finances, networking, and education.
We’ve collected many of those resources right here. Make sure you’re taking advantage of all the opportunities available to you: See below for our monster guide of 22 resources for minority-owned businesses.
Resources for Getting Started
- U.S. Small Business Administration: The SBA is the perfect starting place for any business—with resources for building a business plan, educational resources, and information on government contracting, loans, and grants—some of which are specifically tailored to minority businesses.
- Minority Business Development Agency: Don’t miss out on the tools and opportunities available from this government agency specifically designed to enhance the growth of minority businesses in the U.S. Ripe with educational and business resources, including financial and globalization information, the MBDA’s mission is to expand economic opportunity for all Americans.
Resources for Certification
In order to qualify for many of the benefits of being a minority business owner, you might need to officially certify your business’s minority status. According to the MBDA, certification can significantly help your business gain access to government contracts—whether you are just starting a business or your company is already established, you can drastically benefit from these “set aside” contracts.
Several government agencies at the local, state, or federal level offer certification:
- The NMSDC’s (National Minority Supplier Development Council) has 24 regional councils. If your business wants to connect with private-sector buyers, NMSDC can get you through a standard application process.
- State agencies provide additional information on minority-owned business enterprises (MBEs) and disadvantaged enterprises.
- Department of Transportation Disadvantage Business Certification program provides a vehicle for increasing the participation by MBEs in state and local procurement.
Small Business Grants for Minority Entrepreneurs
You can do a search on Businessgrants.com or Grants.gov using keywords for your business, including “minority owned,” to find grants tailored toward funding your type of business. See a few of the suggestions below.
- The National Association for the Self-Employed (NASE) Growth Grants Program lets business owners apply for financing a particular small business need. Past recipients used funds to purchase computers, hire part-time help, and create marketing materials.
- The Dare to Dream Grant Program encourages students to move through the business creation process by offering business development seminars and up to $10,000 in funding.
- The Miller Lite Tap the Future Business Plan Competition (formerly known as the MillerCoors Urban Entrepreneur Series) is an annual competition for minority business owners sponsored by Miller Lite. Designed to economically empower minority businesses, the program continues to invest in entrepreneurial dreams to build up urban communities.
- The DOT Disadvantaged Business Enterprise (DBE) program is intended to ensure nondiscrimination in the award and administration of Department of Transportation-assisted contracts in the department’s highway, transit, airport, and highway safety financial assistance programs.
- The FedEx Small Business Grant Contest is a nationwide competition that awards $50,000 in total to six deserving U.S.-based entrepreneurs and business owners.
- Check out the MBDA’s grant competitions here.
Resources for Minority Business Loans
Though there isn’t a particular lender you can go to that specializes in minority business loans, there are federal, state, local, and private loan programs tailored to address some of the challenges that minority small business owners often face, like seeking small business loans, starting businesses in underserved communities, or being economically disadvantaged.
A few options of the many minority business loans available are the following:
- The Community Advantage loan program works to meet the financial needs of small businesses in underserved markets. The program encourages local, mission-based lenders such as nonprofit organizations to make loans of up to $250,000 by guaranteeing up to 85% of the loan amount. The program is designed to service small business owners who might not qualify for traditional financing, so it is a great option if you are looking for minority business loans. For details, contact your local SBA district office.
- International microloan organization Accion has a U.S. microlending program targeting low- to moderate-income business owners who have difficulty accessing capital through traditional channels, making it a great option for loans for a minority small business. While not minority-specific, Accion’s U.S. member organizations offer loans from $200 up to $300,000 in all 50 states.
- The National African American Small Business Loan Fund is a joint effort of JP Morgan Chase and the Valley Economic Development Centers (VEDC). The fund serves minority-owned small businesses in low- or medium-income communities in New York, Los Angeles, and Chicago, providing access to capital, financial consulting, and technical help.
Resources for Networking
The SBA 8(a) Business Development Program
The SBA 8(a) Business Development Program can help qualifying minority-owned firms develop and grow their businesses through one-to-one counseling, training workshops, and management and technical guidance. The program also provides access to government contracting opportunities, letting these businesses become solid competitors in the federal marketplace.
SCORE is a non-profit organization composed of volunteer business mentors who offer mentorship and educational opportunities, often working one-on-one or in small groups with entrepreneurs seeking assistance. The organization serves all small-business owners, but they do have a focus on minority entrepreneurs, including offering classes, seminars, and resources that provide assistance in setting up and operating your minority business.
The Minority Chamber of Commerce is a nonprofit that provides members with educational opportunities, financing information, and assistance with contract bids. According to OPEN Forum, many local chambers of commerce, like the Dayton Area Chamber of Commerce or NYC’s Corporate Alliance Program, also have their own programs for minorities that offer advice and financial assistance, so it’s a good idea to give your local chamber a call and inquire.
Affinity Groups might be a good entry point for meeting other business owners in your industry or area. According to OPEN Forum, business owners have found “success gaining valuable business information and assistance by participating in a variety of affinity groups.” Most groups are localized or industry specific, so do an online search for affinity groups tailored to your business type and location.
Resources for Handling Small Business Taxes
Though there are no direct tax incentives for minority-owned businesses, understanding these tax breaks and assistance programs may help your minority-owned business.
A number of tax incentives at the local, state, and federal level are designed to encourage businesses to operate in locations that are economically distressed.
These are not only for minority-owned businesses but for any businesses that qualify—it’s worth a search to see if your business runs in a qualified area. See below:
- The new-markets tax credit program through the U.S. Community Development Financial Institutions Fund (CDFI) “incentivizes community development and economic growth through the use of tax credits that attract private investment” to low-income communities.
- Tax breaks for businesses in Empowerment Zones—“empowerment zones” are designated by the Department of Housing and Urban Development for urban areas and by the Department of Agriculture for rural areas. Businesses operating in this zone qualify for these special tax breaks:
- Empowerment-zone employment credit: For hiring workers in these locations: $3,000 per eligible employee.
- Special capital-gain exclusion: For small-business stock in corporations within the zone that is held for more than five years.
- Additional first-year expensing write-off: Up to $35,000 for purchases of equipment and machinery, in addition to the basic write-off amount.
Note that the credits have expired for 2016 but may be renewed.
Media Resources and Books
Black Enterprise is an online magazine that provides business news, educational tools, and minority business trends, as well as networking opportunities for African Americans. They also publish articles on career advice, how to build wealth, and profiles of African American business success stories.
Making It TV
Making It TV is packed with information pertaining to minority enterprises. According to QuickBooks, you can watch lively discussions on the site’s DirecTV show or check out video clips available online to learn the secrets of entrepreneurial success. Ever wish you could pick the brain of a successful business owner? Here, they confess all their secrets. The site also hosts events or workshops on topics from finding small business grants, getting government contracts, and starting a business.
Minority Business Success: Refocusing on The American Dream
Minority Business Success: Refocusing on The American Dream by Leonard Greenhalgh and James Lowry charts a path for the full participation of minority businesses in the U.S. economy. According to Amazon, the book “summarizes demographic changes in America and shows why it’s in the national interest to foster the survival, prosperity, and growth of minority-owned businesses.” The book also suggests what minority firms must do to take their place in major value chains and examines how governments, corporations, and support organizations can foster minority inclusion.
Start Your Own Business
Start Your Own Business, Sixth Edition: The Only Startup Book You’ll Ever Need: Tapping into more than 33 years of small business expertise, says Amazon, the staff at Entrepreneur Media takes entrepreneurs beyond opening their doors and through the first three years of ownership.
This revised edition features amended chapters on choosing a business, adding partners, getting funded, and managing the business structure and employees, and also includes help understanding the latest tax and healthcare reform information and legalities.
There you have it—22 resources to start, grow, and manage your minority-owned business. While we still need to find more resources for minority entrepreneurs, this list of 22 are great places to get started!
What’s the best resource for minority-owned businesses that you’ve used? Share it in the comments!
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from Fundera Ledger https://www.fundera.com/blog/minority-owned-business