Tuesday, 23 March 2021

Starting a new business is always a challenge. 

It's even more so if you're a member of an ethnic minority. A study by Groupon and the National Black Chamber of Commerce (NBCC) found that 80 percent of Black business owners say they've found starting a business difficult because of their race. Some of the key challenges they've faced include:

  • Lack of opportunities and capital investment (74 percent)
  • Racism and bias (59 percent)
  • Government obstruction (50 percent)

Benetrends adds that discriminatory lending practices, poor business locations, lower net worth and a lack of the networks non-minority-owned businesses take for granted can also make it more difficult for minority-owned businesses to succeed. They don't grow as fast, and they're often not as profitable as businesses not owned by ethnic minorities.

Despite the obstacles, many minority-owned businesses manage to thrive. Here are some of the ways minority business owners can overcome the main challenges.

Find a mentor

If you want to succeed in business, one of the best ways to do so is to get tips from someone who's already done it. In other words, get a mentor.

Various studies show that mentorship has a direct impact on business growth and success. The right mentor can help minority business owners navigate the complexities of government and state business regulations, finding investment and provide advice on day-to-day issues entrepreneurs face.

Here are a few places where minority business owners can find a mentor:

  • SCORE is a nonprofit that aims to help small businesses grow through education and mentorship. There's a special section of their site dedicated to mentoring for Black entrepreneurs.
  • Black Connect aims to reduce the racial wealth gap by helping Black-owned businesses succeed. That includes the Business & Entrepreneur Assessment (BEA) mentoring program, which guides entrepreneurs as they launch their businesses.
  • The Generation E Institute aims to support women- and minority-owned businesses through a mentoring program that matches them with mentors from a network of business professionals.

Access Targeted Funding

You can also check out our list of additional funding opportunities for minority businesses.

Build your own network

If minority business owners are left out of traditional networks that create opportunities for other business owners, one solution is to build your own networks.

If you attended a historically Black college or university (HBCU), you can start with your alumni associations, fraternities and sororities. Other options include:

Note that most of the organizations above also provide educational resources to help minority owners increase their business management skills, which is another way to reduce the challenges of entrepreneurship.

Minorities are playing a leading role in starting new businesses, opening 50 percent of all new businesses in the last 10 years. With the resources in this guide, you can ensure that your business is able to ride out its startup challenges and go on to make a significant contribution to the economy.

 


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