While 30% of the 100 most valuable brands in the world were developed by the year 1900, entrepreneurs are constantly starting new businesses that may one day become part of that list. Unfortunately, starting a business can be difficult, especially for women and other minorities. One obstacle faced by minority business owners is lack of government support.
In 2012, the average gross receipts for non-minority owned businesses were $439,000. To contrast, average gross receipts for minority-owned firms were $167,000 for the same year. The National Association for the Advancement of Colored People (NAACP) released an Economic Development Report Card analyzing the records of cities, school districts, and other organizations in Florida. In spite of having a state population that is 60% minority and/or women, local governments were found to spend less than 2% on women or minority-owned businesses. Many of the governments lack Small Business Programs and Minority and Women Owned Business Enterprise (MWBE) Programs to increase opportunities for entrepreneurs of those businesses. Instituting these programs would improve the local economy by expanding the tax base and increasing cash flow to local businesses.
Of course, government programs can be an obstacle unto themselves. Companies receive credit for contracting small businesses as vendors. Once a business grows, however, they may be considered too large to be a small business, and lose those contracts, while still being far too small to compete with larger corporations. Because of this, many essential businesses in minority areas are being forced to downsize or even close. Even banks present an obstacle to minority business, as minority entrepreneurs are more likely to be denied credit and pay higher interest rates on loans than non-minority business owners.
Expanding and improving small business support programs and developing increased incentives for minority entrepreneurs will help bring businesses to the neighborhoods that need them, as well as giving them the resources they need to succeed. Future generations of entrepreneurs will be inspired by the successful businesses in their neighborhoods, and the economy will continue to benefit.
