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Minorities are majorly driving the growth of entrepreneurship in this country. According to Census Bureau data, the number of minority-owned firms doubled over the last decade. These businesses employ 6.3 million workers and generate $1.8 trillion in revenue each year. And those numbers are expected to increase over the next few decades as more minorities turn to entrepreneurship as a path to financial independence.
Although more minorities are carving out a successful niche in business, starting a company still poses unique challenges if you’re a minority business owner. Minority-owned businesses tend to be smaller and generate lower profits than businesses owned by white people. Minority entrepreneurs are also less likely to get access to credit, which is a key predictor of a business’s future success.
The path to entrepreneurship is certainly harder for people of color, but there are resources that can help. These can be invaluable for businesses seeking specialized advice or assistance on getting started, finances, networking, and education. Make sure you’re taking advantage of all the opportunities available to you: See our roundup of the 25 best minority business grants and other resources aimed toward minority entrepreneurs.
In order to qualify for some government benefits, you will need to officially certify your business’s minority status. Certification can help your business gain access to minority business grants and government contracts and help you become a supplier for large companies. Several government agencies at the local, state, or federal level offer certification, although some charge a fee (ranging from $300 to $1,200) for certification.
Grants are another excellent resource for minority entrepreneurs. Grants are great because they are essentially free money. Unlike a business loan, you don’t have to pay back a grant or pay interest. Several small business grants are available specifically for minority-owned businesses—but don’t miss out on some of the general grant opportunities either. Grants come from the federal government, state and local governments, and private organizations.
If you’re not able to qualify for a minority-owned business grant, then a business loan is the next best thing. You can also use business loans to supplement funding from a minority business grant. Although 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. Remember, before committing to any loan, you should make sure you fully understand the cost and other terms.
Although there are no direct tax incentives for minority-owned businesses, understanding business tax breaks and assistance programs might help your 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.
If you’re interested in learning about business news, educational tools, and minority business trends, check out Black Enterprise, an online small business magazine. They publish articles on career advice, how to build wealth, and profiles of African American business success stories.
Ever wish you could pick the brain of a successful small business owner? Here, they confess all their secrets. Making It TV is packed with information pertaining to minority enterprises. 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. The site also hosts events or workshops on topics from finding small business grants, getting government contracts, and starting a business.
Leonard Greenhalgh and James Lowry, the authors of “Minority Business Success: Refocusing on the American Dream,“ chart a path for the full participation of minority businesses in the U.S. economy. The book summarizes demographic changes in America and shows why it’s in the country’s interest to foster the success of minority-owned businesses. The authors also suggest 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. This book is less about practical advice and more a forward-looking analysis of the importance of minority-owned businesses.
Edward Lewis, co-founder of Essence Magazine, shares his journey to success in “The Man From Essence“. What started as a small publishing platform with three partners grew into a multi-million dollar company. Lewis explains his view on management, startup strategy, and perseverance through the inevitable ups and downs of running a small business.
Tapping into more than 33 years of small business expertise, the staff at Entrepreneur Media takes entrepreneurs beyond opening their doors and through the first three years of ownership. The revised edition of “Start Your Own Business: The Only Startup Book You’ll Ever Need” features updated 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—25 resources to start, grow, and manage your minority-owned business. Things can be an uphill climb for minority small business owners, but with the right resources, you can overcome these challenges and find a way to launch your business. And the good news is that once your business is up and running and exits the “startup phase,” securing resources and business financing becomes a lot easier.