If you have a small Black-owned business, having toolkits and access to grants can help you fix problems and propel you forward. Check our recommended resources below.
When you think of a toolkit, you think of a bag containing a set of tools for a particular job or a range of careers.
In the business sense of the word, a toolkit is a collection of authoritative and adaptable resources that enables you to learn about an issue and identify the best approach to address them.
For small black businesses to break boundaries and make a profit, they need useful resources. This powerful toolkit can help them navigate through every stage of their business growth and development.
Why Do Small Black-owned Businesses Need a Toolkit?
If you must navigate your business from the statistical threshold of the 50% of companies that fail in the first five years of operation, you need reliable resources. Unfortunately, this is not something you can get quickly as a Black entrepreneur.
According to research by the University of California, Santa Cruz, minority-owned startups have access to less capital than their white counterparts. Even when you get finance to start up your business
from investors, you need mentorship and the right employees to grow.
Without considering the Brookings Institute report that only 4.3% of America’s 22.2 million business owners are Black, only 1% of black businesses get a loan in their first year of business compared to 7% for White business.
The situation is more aggravated by the current Covid- 19 pandemic, with Black firms, hit the hardest. Analysis by the Federal Reserve Bank of New York shows that Black firms have been almost twice as likely to shutter from the pandemic as firms overall.
Just 20% of the Paycheck Protection Program (PPP) loans went to areas with the highest concentration of Black-owned businesses.
You see that many small Black-owned businesses’ survival in this era would greatly depend on how much resources are available to them in financing, growth, and development.
What Can Small Black-owned Businesses Do to Remain in Business?
In the face of all these challenges, small black businesses need to stay in business to survive and grow.
Here are things they need to do:
- Take advantage of equity crowdfunding. Equity crowdfunding is quite similar to crowdfunding like GoFundMe only that, in this case, it allows nontraditional investors to support businesses and receive equity. WeFunder and LocalStake are platforms to try out.
- Enroll in mentorship programs. At the early stage of business, mentorship programs like NewMe, Black Girl Venture, and DoD Mentor-Protége ́́́́ program can help navigate small businesses through pitfalls that inhibit growth.
- Become 8(a) certified. Small businesses with 51% ownership and control from U.S. citizens who are economically and socially disadvantaged and whose owner’s adjusted gross income for three years are $250,000 or less are qualified under 8(a). Being certified as 8(a) means that you stand a chance of being rewarded 5% of all federal contracting dollars.
- Take advantage of small business administration resources like that found on SBA.gov.
- Identify supportive bankers who are interested in your company and not just your account number. These kinds of bankers will alert you when there are opportunities for your business and advocate for you when you need them.
Resources for Small Black-owned Business
You have seen the things to do to keep your business alive. Now, you need readily available resources to help you accomplish these things.
The following are resources that can help small black businesses grow financially and achieve their goals amidst the current challenges of the Covid-19 pandemic.
Lemon-Aid Foundation is the creation of Marcus and Bobbi Lemonis. These passionate businessmen created the foundation to provide more significant opportunities to women and minorities by investing in underserved communities and small businesses.
The foundation does not aid small Black-Owned businesses by handing out their dollars to every needy company. No, you have to know the ins and outs of your business, be prepared to share numbers, and prove why you qualify for Lemon-AID before you are eligible for a Lemon-AID foundation funding.
Grants.gov is one of the top resources for small black businesses. It is a Federal government website that provides businesses in the USA with grants. Through this website, you can view over 1,000 federal grant programs, conduct an in-depth search on available grants, learn about the application process, and apply for a grant that suits your business.
The Minority Business Development Agency (MBDA)
As the name suggests, the Minority Business Development Agency (MBDA) is a resource specific to businesses by blacks and other minority groups in the USA. It is an agency of the U.S. Department of Commerce dedicated to assisting minority-owned businesses across the country.
The agency provides several grants and loans for minority-owned firms. Popular funding opportunities you can get from MBDA are the Entrepreneurship Education Program for Formerly Incarcerated Persons Grant, the Enterprising Women of Color Grant, and the Minority Business Enterprise Inner City Innovation Hub Grant.
Local Initiatives Support Corporation (LISC)
The Local Initiatives Support Corporation (LISC) is a non-profit organization that revitalizes needy communities through its programs. This useful resource cares for small businesses.
It supports Black and minority-owned businesses across the country through its Small Business Relief grant program and offers State-by-state mentorship and support services.
Currently, LISC has just rolled out a $1 billion plan to tackle the racial inequality that involves raising and deploying capital to build a more broadly shared prosperity. Small black businesses would surely benefit from this.
National Minority Supplier Development Council (NMSDC)
Like LISC, the National Minority Supplier Development Council (NMSDC) is a non-profit corporate membership organization that supports minority-owned businesses. Through its grant program, the Business Consortium Fund, NMSDC supports certified minority-owned businesses, including Black-owned businesses.
You may know Accion as a microfinance bank, but it is more than that. It is a non-profit organization that provides loans, access to resources, and connections to diverse business owners and entrepreneurs.
It has a particular loan for minority-owned businesses, which you can apply for from their website.
Backstage Capital is another powerful resource for small black businesses, especially if their owners are from the LGBTQ community.
This venture capital fund, Backstage Capital, invests in women, people of color, and the LGBTQ community. Their Entrepreneur Investment application is viewed on a rolling basis.
Foundation for Business Equity (FBE)
The Foundation for Business Equity Initiative supports and provides funding for Black and Latino business owners, making it another powerful resource for black-owned businesses.
For the Covid-19 pandemic, FBE created a “Covid-19 emergency fund” to provide flexible loans and crisis response support teams to Massachusetts-based Black and Latino-owned businesses with revenues of at least $250,000.