More than ever before, minorities are seeing entrepreneurship as the path to financial independence. Between 1997 to 2002, the total number of U.S. businesses grew by 10%, while the number of black-owned businesses grew by an unprecedented 45%. The number of Hispanic-owned grew by 31%, and the number of Asian-owned businesses grew by 24%.
According to the most recent data available from the U.S. Census Bureau, between 2002 and 2007, the number of small businesses owned by minorities increased 46%, while small businesses owned by non-minorities only increased by 10% during the same time. Small businesses owned by minorities represent 15% of all small businesses in the United States and employ 5.9 million people. Some experts believe that minority-owned small businesses will become the majority within the next 5-10 years.
The truth is a number of minority entrepreneurs are both underrepresented and underserved when it comes to small businesses in Charlotte. There are several reasons why these discrepancies exist. For example, these are communities that typically don’t have a lot of generational wealth. So, when going down the initial friends and family realm to help get their businesses off the ground, minority entrepreneurs do not get the financial support they need. Without funding in the early stages, minority entrepreneurs end up going back to work before they can get angel investing or even to the next stage of development.
Minority entrepreneurs also have fewer business connections. Because there are so few minority-led high growth businesses, entrepreneurs from these minority groups don’t have access to mentors. In addition, the good-old-boy-system dominating the business world is less likely to mentor women and those who are of minority ethnicities.
More and more people have embraced entrepreneurship as a means to build wealth. Seemingly, entrepreneurship is about wealth creation, but that wealth can also be social, artistic, and not just financial. Consider people who are responsible for sports and social clubs are frequently entrepreneurial without ever getting such recognition, while people who establish charities are considered to be social entrepreneurs. What a city Charlotte would be if we could foster this entrepreneurial spirit in all of our citizens and how much socially and economically richer we would be if this was our culture?
Consider: appreciating the substantial difference in how these terms should be integrated can lead people to a greater enlightment about the unique challenges minority entrepreneurs endure. The majority of minority entrepreneurs are ‘push’ entrepreneurs, in other words they are pushed into starting a business because of the negative experiences they have suffered in the employment of others. Many have encountered issues such as racism, ageism, homophobia, or many of the other forms of prejudice that such groups are expected to tolerate. Minority entrepreneurs also face challenges that mainstream entrepreneurs are less likely to have to shoulder. They have particular difficulty in finding a mentor, an element of entrepreneurship that is highly underestimated. Research in other cities has highlighted that minority entrepreneurs also possess a greater lack of experience in managerial capacities and lower levels of educational achievement due to their social circumstance than mainstream entrepreneurs. Obstacles await these minorities at whatever turn they might take on the journey through life.
The bottom line: I encourage business leaders in Charlotte – especially African-American business owners to make a commitment to their community, their city, their state, and their country. It doesn’t matter whether its minority business growth or some other issue; as long as you are passionate about helping, you can make an impact. Black business owners are the foundation of any black community, and therefore, have a unique opportunity and responsibility to go beyond the quest to make a profit and seek wherever possible to make a difference.
That’s how business leaders need to think outside the box. We are all capable of doing great things if we have the opportunity and resources, and if we’re willing to work hard at it.