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Minority Business Ideas
Minority owned businesses make up roughly 30 percent of the economic landscape in the United States, and that number is set to rise dramatically over the next few years. Many minority groups are setting aside the notion of working for others, and are starting businesses for themselves and their communities. However, with many business ideas available to minorities, choosing the right one can be one of the biggest and most difficult decisions to make. We have put together a guide to help minorities find the business opportunities they want in order to ensure long-term success.
References:
https://www.census.gov/newsroom/press-releases/2015/cb15-209.html
https://www.entrepreneur.com/page/216027
https://www.cnbc.com/2016/04/14/rise-of-minority-businesses-in-the-us-survey.html
https://www.esa.doc.gov/economic-briefings/deep-dive-hispanic-business-ownership
https://www.nap.edu/read/9719/chapter/10
Look Around Your Community
“Think globally, act locally” is much more than a catchy phrase for a bumper sticker. Many minority owned businesses are created with the needs and desires of the immediate neighborhood in mind, while creating jobs within the community. For example, Hola Carolina was founded by a husband and wife team who saw that the Latino community had a consumer audience as well as businesses who were not connecting. Hola Carolina became their project to start a program to put Latino businesses in touch with their customers, which met with a resounding success. The opportunity for the minority owned business to go national is present, but the owners want to keep operations local, and inspire others in locations across the United States to do the same. Whether it is a local automotive repair shop, a tutoring business, or public relations, many minority business owners are finding success and fulfillment by starting companies that help their immediate communities and uplift the people who work for them.
Minority Owned Franchises
Over 20 percent of all franchises in the United States are minority owned and run businesses. Many franchises offer special discounts and rates to encourage minority groups to launch franchises. The reason is not about being politically correct, or out of generosity. Franchisors see a long-term return, and since franchises offer inexpensive goods and services, making the initial start up costs more affordable, they can increase their presence. For a long time, franchises felt that minority communities were too much of an investments risk, however, with minority owned franchises slated to overtake an entire quarter of the field over the next few years, the naysayers have been proven wrong by a long shot.
Why Franchises Are Great For Minority Business Ownership
Minority owned franchises offer a streamlined business model which is not only affordable, but franchises come with built-in benefits that most entrepreneurs do not get when starting from scratch. Franchises offer minorities training, branding, and existing and eager customer base, as well as support to overcome any obstacles. Franchises offer minorities more than just an opportunity at business ownership, they offer growth. Franchises provide upward mobility, giving minority owners room to expand their customer base and own multiple establishments in a geographic area. Many minority owned franchise businesses have grown into small empires, generating revenue from multiple locations.
References:
https://smallbusiness.chron.com/benefits-minority-owned-franchise-4359.html
https://www.sba.gov/starting-business/how-start-business/business-types/franchise-businesses
https://plrplr.com/5315/minority-owned-franchises-can-help-business-grow/
Minority Owned Businesses Have A Larger Impact Than Most People Think
When minorities launch businesses, they are not just carving out a share of the market for themselves. Minority owned businesses usually employ local people, which helps the immediate community and economy. In the case of minority owned franchises, most hire young people in the neighborhood which not only forges tighter bonds with local households, but they also teach people new skills and pass on business strategies which encourages the youth in the community to strive to better themselves, while also giving back. Minority commercial real estate investors are breathing new life into their communities by renovating homes and giving places for people to live and grow their families. Minority businesses are doing more to uplift entire communities than many other businesses.
References:
https://www.nmsdc.org/minority-owned-businesses-critical-measure-nations-economic-health/
https://www.nwbc.gov/research/economic-impact-women-owned-businesses-united-states
https://www.ssoe.com/expert-articles/the-big-business-of-minority-business/
Starting From Scratch
Some minority entrepreneurs want to do something revolutionary that falls outside of the franchise model. The best place to start is by looking around to see what the community needs, or what aspects of life can be improved. The most successful business ventures fill in gaps that are being overlooked by everyone else. In many cities, there are entire neighborhoods that are classified as “food deserts.” People cannot get nutritious food at affordable prices, or without traveling really far from home. As a response to this need, minority owned grocery stores have been on the rise, to fill in the gaps that the larger chains deem to be a fiscal risk. When public schools are lacking and private schools are too expensive, there has been a rise in minority tutoring businesses, to help student meet and exceed standards, improve their grades, and achieve the higher education they deserve. With so many businesses focused on luxury goods, many minority entrepreneurs are rising to the top by providing goods and services that improve their immediate infrastructure, which opens the way for a brighter future for everyone.
Financing Minority Businesses
Finding financing for minority owned businesses can be challenging. While there is a lot of funding out there, the entire process can usually require a lot of research, legwork, and paperwork. We have already done some of that to help you get started.
Everything Starts With A Plan
While funding sources for minority owned businesses can vary greatly, almost every single lender or organization will want to see a business plan. A business plan contains everything from what your company intends to do, to projections, forecasts, the start up costs, an analysis of immediate competition, how long it will take to pay off debts and generate a profit, who the target customers are, and much more. The process can seem overwhelming, but all is not lost. There are a number of free resources that not only provide templates for business plans, but will assist in compiling information to make things understandable and attractive to increase the odds of approval for loans, grants, and other forms of financing for minority businesses.
Resources:
https://core.score.org/resources/business-planning-financial-statements-template-gallery
https://www.sba.gov/starting-business/write-your-business-plan
https://www.scu.edu/mobi/business-plans/
https://www.lawdepot.com/contracts/business-plan/?ldcn=partnership-and-joint-venture#.WQpZytLyuUn
https://get.morebusiness.com/documents/business-plan-book.pdf
https://www.commbank.com.au/business/pds/Business-plan-toolkit.pdf
https://www.mohave.edu/documents/sbdc/resources/fill_in_business_plan.pdf
Loans For Minority Businesses
The Small Business Administration (SBA) has a wealth of resources for funding minority owned businesses. From instructional articles to loan programs, the SBA has been nurturing minority owned businesses for a long time. The SBA also has an 8(a) loan program. The SBA 8(a) is designed specifically for minority and economically disadvantaged entrepreneurs who need a boost in financing to get operations up and running. On top of that, the SBA 7a and 504 loan programs help minority businesses get the working capital, equipment, fixed assets, and even property they need.
References:
https://www.sba.gov/contracting/government-contracting-programs/8a-business-development-program
https://www.sba.gov/tools/local-assistance/districtoffices
https://www.microenterpriseworks.org/
Alternative Lending For Minority Businesses
SBA and bank loans are not the only methods available for funding minority businesses. Alternative lending sources such as crowdfunding, angel investors, peer-to-peer lending and other sources are bringing business into the 21st century. With digital campaigns and transactions, minority owned businesses can get up and running much faster than waiting on the red tape of traditional banks.
Grant programs
There are a number of grant programs available for minority entrepreneurs. Some are for general funding, others offer grants for specific industries and business sizes. We have included a few links for grants for minority businesses, but there may be more available, specific to your state.
References:
https://www.businessgrants.org
https://www.transportation.gov/civil-rights/disadvantaged-business-enterprise
https://www.rd.usda.gov/programs-services/rural-business-development-grants
https://www.mbda.gov/page/grant-competitions
https://sbir.nih.gov/apply/application-types
https://smallbusinessgrant.fedex.com/
Take Control Of Your Dreams
Whether you want to start a franchise, open a family business, build up your community, or launch a robust niche industry start up, minority entrepreneurship allows people to make their dreams into realities, and create a better world, without the uncertainty of working for someone else. With minority businesses on the rise, there is no better time to launch your own enterprise.