As much as we may want to believe we live in a world of equality, that is unfortunately not always the case. There is no doubt that we have come a long way as a society even in the last decade or two, but there is unfortunately still a degree of inequity between different groups of people that clouds our society – a reality that is no different in the realm of finance and small business ownership.
To dive deeper into this idea, today’s blog will explain and highlight two potent issues that minority business owners face in modern society. We hope that this blog, whether you identify as a member of a minority or not, will be a gateway to understanding the unique issues that challenge and test minority business owners everywhere in order to give you an appreciation for what they deal with that may be different compared to the challenges you endure.
Let’s get right into it.
Minority business owners face a unique challenge when it comes to getting assistance with financing for their business ventures. In fact, according to data shared by benetrends.com, despite a 79% growth in minority business ownership between 2007 and 2017, there still exists several significant financing gaps for minority-owned businesses. Some of those gaps include, per the U.S. Commerce Department’s Minority Business Development Agency:
- A decreased likelihood with respect to receiving funding generally, when compared to white-owned businesses.
- Smaller loans than those received by white-owned businesses: average loan of $310,000 for non-minority businesses with over $500K in annual gross revenue. $149,000 for minority-owned businesses.
Access to Business Networks
It is hard for minority business owners to build the networks and social capital that is imperative to proper and effective business growth. There is indescribable value to having a potent network of powerful and prominent advisors, peers, supporters and colleagues when you are in the entrepreneurship space. It is hard enough for anyone to build a business on their own, which speaks to how important such assistance and support can be to finding entrepreneurial success. Attaining this success has historically been (and still continues to be) harder for minority business owners due to the comparative lack of institutions designed to assist them in this goal, as many of the existing supports in this space cater more to the general population and less so to the specific challenges and nuances of minority business ownership.
We know that this blog is significantly more gloomy and negative than our usual content, but we strongly believe in the importance of talking about entrepreneurship from all angles, so we hope that you appreciate the need for content like this on top of our typical blogs.
With that said, we hope this blog was able to shine a bigger light on the realities of entrepreneurship, because we trust and believe that more and more people will be driven towards entrepreneurship as an income source in the future.
If you believe in that trend as we do and you are the parent of a child in grades one through nine who wants to get them a jumpstart on learning about entrepreneurship from a young age, we encourage you to check out Explorer Hop’s entrepreneurship programs. In these programs, we take kids through our nationally and internationally-acclaimed lessons and courses on topics spanning from operations and marketing to finance and sales, laying the groundwork for future success in entrepreneurship. On top of that, our programs have also helped launch 40+ real kid-businesses to date, which have raised over $45,000 for various charities.
If this interests you and your child, visit our website and sign up today!