COVID-19 posed more than one challenge to businesses, and the pandemic put an even greater toll on minority business owners.
As minority business owners experience a cash crisis, many were unable to obtain loans to keep the door open.
In 2020 400,000 small businesses decided to close permanently due to the consequences of the pandemic – many of them were in deprived communities. Whether you are in the idea phase or have already developed one, this guide will help you start your own minority business.
Please read this guide before diving in this blog how to start a business if you are still in the idea phase.
Once you’ve finished reading this piece, you’ll have everything you need (and more) to thrive in a minority business, from getting certified as a minority to funding opportunities and growth resources.
You will receive a certificate from a minority-owned company
Once you’ve set up your business idea, planned and registered your business, it’s time to become a minority certificate. This certificate is not required, but it will help inform consumers and potential partners about running your business.
You may also need this certificate if you want to apply for government-funded minority grants and loans or other programs.
Illinois, Ohio, Californiaand New York have local authorities to be certified as a minority-owned enterprise at national level. There are several ways to get certified from local government and business agencies, so it may be better to consult them directly based on where your business is registered.
Here are some more high-level agencies that are considering certifying a minority business:
- National Council for the Development of National Minority Suppliers (NMSDC): Headquartered in New York, NMSDC manages 22 regional liaison councils around the United States. NMSDC provides minority-owned business certificates and business development programs. The Council has a network of more than 1,750 corporate members and has matched more than 12,000 minority companies with their member corporations. The certification process includes an online application, a fee, an interview, and a site visit upon confirmation.
- Small Business Administration 8 (a) Business Development Program: The federal government has committed to allocating five percent of all federal contract dollars to disadvantaged small businesses each year with an 8 (a) symbol. This is an SBA-specific minority-owned company certificate that is required if your company intends to compete better for federal government contracts.
These same organizations and agencies may also offer business certificates to women and LGBTQs.
Apply for minority grants
The founders of minority institutions often start up, start co-financing campaigns or try to raise initial funding through family and friends.
You can use different paths to finance your start-up, but if you are on your own in terms of financing, finding a government grant is a great start. Grants.gov distributes more than 1,000 small business grants for open search, and here all federal government agencies post their grant opportunities.
Here are some ways to support entrepreneurship for minority founders:
- Coalition to Support Black Businesses: This initiative was set up to help black small businesses struggling with a pandemic. The coalition will award 300 grants in the amount of $ 5,000.
- US Department of Agriculture (USDA): This agency runs a rural business support program for businesses in rural areas with less than 50,000 inhabitants. The program offers grants to minority small businesses ranging from $ 10,000 to $ 50,000.
- Restore block (RTB): Under its Small Business Assistance Fund, RTB provides annual grants to owners of black businesses affected by the pandemic. Not every grant has a specific monetary value, and it is recommended to apply for freelancers and other advertisements.
- First National Development Institute (FNDI): Deadlines and opportunities vary, but this nonprofit provides financial and technical support to Native American organizations. FNDI has provided 2,150 grants to local projects in 40 phases and in the region for a total of $ 43 million.
- National Black MBA Association: Starting in 2017, the association will be running the Scale-Up Pitch competition, which will provide grants to black business owners ranging from $ 1,000 to $ 50,000. To apply for this opportunity, someone from the company must be a member of the association.
- Asian Women’s Circle (AWGC): This support is exclusive to American American women-owned businesses. The AWGC awarded 11 grants between $ 2,500 and $ 10,000 in 2020, and this year the maximum grant is $ 15,000.
- SoGali Foundation: This current program provides $ 5,000 and $ 10,000 to black women founders and black non-binary entrepreneurs.
- FedEx: Every year, FedEx runs a nationwide competition for small business grants, and while it’s not just for minority businesses, many past winners have been minority founders. Winners will receive grants ranging from $ 15,000 to $ 50,000, plus funds for FedEx printing services.
Each organization sends a monthly newsletter with updated grants and funding opportunities for minority founders.
Apply for minority loans
Another financing option could be to apply for loans. Historically, minority institutions have fought to secure business loans credit inequality and discrimination, but there are still reasonable loan options.
Here are some business loan options for minority founders:
- Check the capital: Specially designed to support immigrants, refugees and women entrepreneurs, Accompany Capital offers $ 500-50,000 microloans with repayment terms ranging from six months to three years.
- US Small Business Administration (SBA): The SBA manages some credit facilities, including this Microcredit program and Community Benefit Loan Program. The microcredit program, open to all small businesses, offers loans of up to $ 50,000, an average of $ 13,000. For the Community Advantage loan program, the SBA encourages community lenders, primarily nonprofits, to provide loans to minorities, women, veterans, and other underage founders of up to $ 250,000.
- Business Consortium Fund: The fund, offered to NMSDC-certified companies, offers loans and credit limits ranging from $ 250,000 to $ 750,000, with repayment terms of up to five years.
- USDA: Under the Enterprise and Industry Loan Guarantee Program, the USDA provides loan guarantees of up to $ 1 billion to local banks and direct lenders in rural areas with less than 50,000 residents. Minority businesses can also apply directly for a US Department of Agriculture loan, ranging from $ 200,000 to $ 5 million, up to a maximum of $ 10 million.
Use additional minority programs and resources
Even if you may think you have it all invented, a little extra instruction won’t hurt.
Here are ten accelerators, startup programs, and other resources for minority founders:
- The Visible hands the scholarship runs a 14-week virtual program to provide underrepresented entrepreneurs with business start-up services and investments of up to $ 200,000. The initial cohort will receive more than 30 scholarships.
- Dedicated to the diversity of technology, Black founders offers programs and organizes events for black technology entrepreneurs.
- Operation HOPE runs an eight – week entrepreneurship training program designed to help entrepreneurs in low – income communities.
- SBA Business Development Program helps minority business owners get better SBA credit. Your company must be registered with the SBA as a small business to participate.
- Agency for the Development of Minority EnterprisesThe USD Department of Commerce agency was established to provide minority founders with better access to capital and resources. The agency manages business centers throughout the country and organizes business development programs.
- 1863 ventures– The Business Development Organization, which promotes people of color, women, immigrants, LGBTQs, veterans and business owners with physical disabilities, runs two acceleration programs. Its Pipeline program is designed for pre-growth companies and that Acceler8 program is growth to expand businesses.
- Y Combinator startup assembly contains a wealth of resources lasting 15 years.
- National Council for Minority Enterprises offers minority business owners educational opportunities, entrepreneurial start-up camps, seminars, business assistance and more. Membership is recommended.
- U.S. House of Congress Minority is a non-profit organization that promotes the rights of small businesses. The organization has chapters throughout the United States that organize networking events and provide local business resources.
- Founder Institute assembled Black American Startup Resource List full of 742 resources for concept stage entrepreneurs. If you are looking for accelerators, investors or even events, this list is a great place to start.
Give yourself motivational advice from other founders of minority founders
Starting a business from scratch is difficult, but making a minority can be more challenging.
Minority business owners prevent many differences, but hopefully these opportunities and resources will alleviate some of the effort. Although the establishment of a minority-owned company may be the same as the establishment of any other company, there are some opportunities to take advantage of the unique opportunities created for minorities, such as obtaining a certificate.
I turned to some minority companies that have worked hard and are still trying to expand their businesses. Here are some tips if you feel discouraged:
- “Understand that starting a busy job is hard and ten times harder for minority founders. If you are committed to your dream, work, go deeper and let your work speak for itself.” – Stephanie Cummings, Founder and CEO please help me.
- “Just do it – one of my favorite phrases. As minorities, we don’t often see similar faces on the cover of Forbes or anywhere else. It changes slowly. But that doesn’t mean you can’t do it. What matters at the end of the day is whether your company helps others in fact. “- Nhon Ma, founder and CEO of the company Numbered.
- “Don’t commit too much to ideas. Spend your time attaching to your values and know what you’re standing for as a person – your values will be the guiding light, not the ideas.” – Ronnie Kwesi Coleman, Founder and CEO Meaningful concerts.
- “Use your networks to grow brand awareness organically, but don’t forget who helped you get there when you gain momentum.” – Leela Bhatia-Newman and Mariana Magala, founders DistrictlyLocal.