3 Ways to Support Minority-Owned Businesses
From #BuyBlack and #BankBlack to supplier diversity initiatives, here's how you can get involved and support minority-owned businesses.
Minority business owners are the lifeblood of American society. Although this group only owns about 20 percent of all small businesses in the U.S., they contribute much-needed diversity to the business landscape.
As a grandson of an entrepreneur, I understand what business ownership can do for a household. I learned that entrepreneurship empowers families for generations. After seeing how hard my grandmother worked and the life she created for myself and my mother, supporting minority- and women-owned businesses is an important matter to me personally.
The issue: Currently, there aren't enough minority-owned businesses out there. While white-owned firms account for 81 percent of businesses, black and Asian individuals own less than 10 percent of businesses — and Hispanic founders own just 5.8 percent.
Whether you're a consumer or member of a government agency, there are a whole host of ways for you to get involved and support minority-owned businesses.
Consumer Support: Buy Black
In the first episode of Trigger Warning with Killer Mike, Michael "Killer Mike" Render attempts to live exclusively on black-owned business's products and services, from shopping to eating to traveling. Killer Mike's struggle to find black-owned businesses points to a larger disparity between white business ownership and minority business ownership. "Business deserts" are created when there is an absence of black-, Latinx- and women-owned businesses. Even though minorities influence cultural needs and trends, these deserts remain when minorities don't own the businesses we need.
As a result, many black consumers are taking a stand and putting their dollars back into their communities by buying products and services from black-owned businesses. Trending hashtags like #BuyBlack and #BankBlack encourage people to buy from black-owned stores and use black-owned financial institutions, while online directories like Black Pages and We Buy Black connect consumers to black-owned companies locally and internationally.
The University of Georgia reported that black buying power is projected to reach $1.4 trillion by 2020. Latinx buying power is projected to top $1.9 trillion by 2023, and Asian-American buying power could increase 32 percent, to $1.1 trillion, by 2020.
For consumers, it's important to remember that where they spend their dollars can make a real difference. If black households spent $1 of every $10 at black-owned stores, between half a million and one million jobs could be created. Alongside the growth of these enterprises, consumers looking to #buyblack would then have a variety of options to spend their money where they see fit. Being intentional about shopping at black-, Latinx- and women-owned companies can help ensure that your favorite stores have the support they need to operate and grow within your community.
Private Support: Increase Workforce Diversity
Private institutions can also implement changes in their companies by creating initiatives that foster more diverse and inclusive work environments. Companies that establish diversity programming can expect a more innovative office, an increase in creativity and a higher retention rate.
Recently, Goldman Sachs has refused to take a company public unless there's at least one board candidate contributing to diversity — the financial institution is specifically looking for women board members. In focusing their audience on diverse populations, Goldman is attempting to normalize inclusive work environments. Gender diversity in the workplace can foster more productive companies, and diverse businesses can earn 19 percent more revenue.
As private companies look to increase their bottom line and advance workplace culture, they can begin with diversity. Supporting women and minority employees can champion innovative solutions to corporate problems that may not have been addressed otherwise.
Government Support: Diversify the Supplier Pool
Just as consumers and private companies can support minority businesses with their purchasing power, government offices can achieve better economies of scale and assist minority entrepreneurs through supplier diversity initiatives. Supplier diversity is also key to the success of minority- and women-owned businesses.
Supplier diversity is about enriching the vendor pool that provides critical goods and services to nonprofits, private companies and government offices. The more diverse these pools, the stronger supply chains and minority business communities can become. Minority-owned business enterprises (MBEs) and woman-owned business enterprises (WBEs) can expect significant financial rewards by participating in supplier diversity programs. These programs can drive an additional $3.6 million to an organization's bottom line for every $1 million spent in procurement operating costs.
The National Minority Supplier Development Council (NMSDC) seeks to connect minority business enterprises with procurement opportunities within its network. With 23 affiliate nationwide regional councils and over 1,450 corporate members, NMSDC matches more than 12,000 certified minority-owned businesses to an extensive network of corporate members looking to purchase their products, services and solutions.
Personally, in New York City, I've aimed to make sure SBS's Minority- and Women-owned Business Enterprise (M/WBE) Certification Program promotes fairness and equity in procurement processes by connecting certified businesses with opportunities to sell their products and services to city agencies. More than 9,000 of these businesses have been certified, and as they've won over $13 billion in contracts since 2016, these growing diverse businesses directly contribute to the city's economy.
Consumers, companies and governments support minorities by contributing their different resources to the larger ecosystem. Consumers can spend within their communities, private companies can adopt diverse hiring and partnership practices and governments can implement certification programming that bolsters economic success.
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