4 Tips for Minority-Owned Businesses
Starting your own company is not easy task, especially for minority-owned businesses. This is because you will have all the challenges inherent in making a business plan and securing funding, locations and equipment, as well as institutional biases which can make the whole process more difficult. There are four things that you should do to make opening a business easier on yourself; acknowledge that discrimination exists, find networks which matter, address lags in funding and find programs to help.
It is an unfortunate reality, but minorities owning businesses will face both subtle and overt discrimination in many different areas. Sometimes it is through lenders and sometimes it is through potential customers. By offering exceptional service and products, however, you can counter some of the discrimination you face from customers. Other times you may need to push harder and in different ways to get the financing and even licensing that you need to thrive as a business, so it is a good idea to consult an attorney if you are struggling.
For minority-owned businesses, finding the right networks of peers and mentors can make all the difference in how you thrive in the marketplace. With online social and business networking sites this process is much easier than it has been in the past and you may find that the best advice comes from someone in a similar situation half a world away.
Studies show that the funding for minority and majority-owned businesses are not equal. Many minority owners receive less funding, have a higher fear of rejection and pay higher interest rates than majority owners in the same fields. One way that you can help to close that gap is to ask for funding when needed and research comparable amounts and interest rates before you go into apply for loans. The Small Business Administration can also help you be more confident in choosing a lender and receiving the funds that you need.
In addition to the SBA loans many business owners are familiar with, there are other resources such as HUBZone, Microloans and Community Advantage loans. Each of these programs and a couple of others are designed to help businesses in areas considered underserved or to help companies determined to be disadvantaged in other ways. You can also look for state or local programs along with privately run associations dedicated to helping minority business owners succeed.
Minority-owned businesses can face some disadvantages and discrimination not seen in majority-owned companies. With the right tools and tips, however, you can ensure that your start-up succeeds now and far into the future.