6 Ways You Can Support Black Businesses Long-Term
Want to see lasting diversity and equality in your entrepreneurial community? Here are some ways to put your time, money, leadership and know-how to work on evening the playing field for minority-owned businesses.
In the months since George Floyd's death, the country has been reckoning with our legacy of racial inequities. Many people have been taking a good hard look at themselves, and many are trying to figure out how they can help. Black History Month begins today, and this year — perhaps more than any in recent history — people are looking for genuinely impactful ways to celebrate. Entrepreneurs tend to be hands-on doers and problem-solvers, so when a deep systemic issue has been identified, business leaders look for solutions. And according to Connie Evans, the CEO and president of the Association for Enterprise Opportunity, that's what makes entrepreneurs so valuable to the cause of racial equity. "Business owners can help their local government leaders think more creatively and more entrepreneurially to solve some of the problems that they're seeing in their communities," Evans told Entrepreneur.
Evans has been advising governments, business owners and nonprofits — from presidential administrations to the World Bank to the Senate Small Business Committee — for 25 years. She was the first black woman to be elected to the Board of the Federal Reserve Bank of Chicago and has also served on the U.S. Treasury Department's CDFI Advisory Board. When we asked her how the entrepreneurial community can translate their convictions into actions, she had six suggestions.
1. Use your buying power to support minority-owned businesses.
Evans says, "Your readers should think about looking to find and support black-owned and Latinx-owned businesses with their consumer dollars. That's a very important thing that any reader can do. If you're in a community where there aren't many minority-owned businesses, or you're not sure where they are, there are black directories out there and organizations that can link them to black businesses."
We have listed a number of them here.
2. Write letters to your national and local representatives.
"Your readers can also use their voices and their pens to write to their representatives," Evans says. "And I don't just mean to Federal congressional representatives. There are lots of regulations and laws at the state and local level that represent real barriers for minority businesses."
For example, at the local level:
"Business owners and businesses of color have more difficulty accessing new markets," Evans says. "And all governments, whether you're local or state, have contracting opportunities. Oftentimes those contract opportunities go to very, very, very large businesses. So, you could petition your local or state government to break up these big bundle contracting programs so that smaller and black-owned businesses can have access. That's a very important one, and it's something that can be done easily if there is will and demand. And there are examples out there of cities that have done this."
Evans continues, "Another thing at the state and local level is removing the barriers for how businesses get licensed. In many places, you have to jump through 50 different hoops and go to three different places and all of those things. Those are just barriers to people without as many resources."
At the national level:
It's generally important to let your representatives in Congress know you care about how the Small Business Administration decides which businesses get capital, but that's especially true when it comes to future rounds of stimulus funding.
"We must prioritize businesses with no more than 10 employees, period," Evans says. "Businesses owned by people of color overwhelmingly — we're talking more than 90 percent — have 10 or fewer employees. So, the SBA needs to eliminate regulations that allow first-come, first-serve funding [that goes primarily to bigger "small' companies]."
Entrepreneurs can also let their federal representatives know they don't approve of the SBA discriminating against small business owners with criminal records, which disproportionately affects entrepreneurs of color.
3. Take stock of diversity in your own business operations.
"By nature, entrepreneurs are leaders," Evans says. "They can be community leaders, and use their voices. But entrepreneurs are also business owners. And if we're really going to change society, you shouldn't do the first two actions I mentioned without also working for inclusivity inside your own business operation. Look at your supplier list. Is it diverse? Look at your employees. Are they diverse? Try to have alignment in your actions. Don't be outraged at the injustice you're discovering without taking on these issues seriously and valuing diversity and inclusiveness in your own operations."
4. Donate your company's services
"If anyone had any doubt, it's now clear that the whole global economy is moving to a much more digital marketplace," says Evans. "And some of these smaller businesses owned by people of color have been much slower to get up to speed on having a digital presence and developing expertise there.
"AEO has created what we believe to be a comprehensive, relatively sophisticated solution to reach small business owners, including black business owners," Evans continues. "Through our program called Main Street Rise, we've pulled together partners like GoDaddy and Bench and Fanbank, who all have world-class technology solutions to help small businesses get up to speed quickly. With Main Street Rise, our partners are offering these products and services free to small business owners in need.
"For example, Bench provides accounting services for entrepreneurs. Small business owners have lost so much revenue during shelter-in-place, and many don't know if they can afford to take out PPP loans or any other kinds of loans. They need help with accounting and getting their books in order, and some of these businesses just can't afford that.
"We can help with that. We're also able to give them a way to generate revenue through Fanbank in a program where they can sell credits to their customers, so when they're able to open, their customers can go in and start shopping with them. We also have mentors who can help you figure out how to pivot in this environment and in the recession we're entering. So, if your entrepreneurial readership has solutions that they think can help small businesses, we will be happy to talk with them about joining our partnership."
5. Put on your entrepreneur hat to find community solutions
"Entrepreneurs are always thinking, "How do I solve problems?' And they can use that mindset to help their local government leaders think more creatively and more entrepreneurially to solve some of the problems that they're seeing in their communities," Evans says. "For example, during the lockdown, you might think, "Okay you have restaurants that are closed, and can only do takeout and curbside delivery, and you have entire communities where people are unemployed and don't have food. They're standing in food lines that are wrapping around blocks. Why not take state government dollars and give those restaurants grants to open up and feed the community? That way, the restaurants are able to hire people back while also filling a real need to get nutritious food back into communities. We need to get more entrepreneurial about how we are using government resources and how they can be used to solve multiple problems and challenges all at one time."
6. Get strategic with your charitable donations
"Oftentimes people think of charity as helping the homeless, education, social services — and that's all great, of course," Evans says. "But your readers might not realize that an important part of the entrepreneurial ecosystem for communities of color and business owners of color are these nonprofit organizations that are set up to provide capital and trusted guidance to businesses in underserved communities. Those nonprofits need support, and there are different creative ways of doing that."
Grants. "Reopening for many small businesses will require grants — capital without the burden of loans and payback. How are they going to pay for all the new retrofitting that will be required to reopen? Where's that money coming from? You can't take out a loan for that because your revenue is reduced, and even when you open with the retrofit, you can only have 50 percent or 25 percent of the occupancy that you used to. So people need grants for that.
"You can come to Main Street Rise if you want to make a grant to a particular business in your neighborhood — or just to any businesses working with AEO," Evans says. "We're a national organization, and we have over 1,700 members so if any of your readers say, 'I want to support businesses within my state or within my big city or within my little town,' we can do that.
"We can direct the resources to any geographic or socio-demographic parameters that someone may really want to see their resources support. Grants are a really important way the entrepreneurial ecosystem can get engaged in supporting black-owned businesses, women-owned businesses, entrepreneurs with records, entrepreneurs in rural communities, Native American communities and immigrant communities."
Donor-Advised Funds. "Some of your readers may have their own trusts, family foundations or what's called a Donor-Advised Fund (DAF). When the new tax policy went into effect under this administration, there were more opportunities for people of wealth to use that money in charitable ways that allow them tax advantages. One of those "products,' if you will, is a DAF that they have set up — oftentimes with Fidelity. And you can think about using your DAF in ways that can support minority business ownership.
"For example, through Fidelity, AEO just received a $10,000 contribution from a business owner in California who wanted to support Main Street Rise. They took this money from their DAF and said specifically, 'This is to help small businesses.'
"There is a program in Chicago called the Chicago Community Trust, which directs your money to help support businesses or black-owned businesses in the community. That would be a charitable contribution your readers could get a tax write-off for. So, it's just another way of thinking about what you have, generally, that can help."
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