COVID-19 has brought more challenges to businesses than challenges, and the pandemic has caused greater losses to minority business owners.
As minority business owners face a cash crunch, not many people can get loans to keep their doors open.
In 2020, 400,000 small businesses decided to close permanently Due to the impact of the pandemic-many of them are in underserved communities. Whether you are in the creative stage or already established, this guide will help you start a minority business.
Before you dive into this guide, please review This blog on how to start a business If you are still in the thinking stage.
By the time you finish reading this article, you will have everything (and more) needed to thrive as a minority business owner-from how to obtain minority business certification, to funding options and growth resources.
Obtained minority corporate certification
After you have determined your business philosophy, plan, and registered your company, it is time to obtain the certification of an ethnic minority business. This certification is not required, but it helps consumers and potential partners understand your company’s leadership position.
If you want to apply for government-sponsored minority corporate grants and loans or other programs, you may also need this certification.
Illinois, Ohio, California, with new York Get local institutions to be certified as minority businesses at the state level. There are multiple ways to obtain certification from local states and commercial agencies, so it is best to consult them directly based on where your business is registered.
The following are some other high-level organizations that can be considered for obtaining minority business certification from:
- National Minority Supplier Development Council (NMSDC): NMSDC is headquartered in New York and manages 22 regional affiliate committees in the United States. NMSDC provides minority-owned business certification and business development plans. The committee has a network of more than 1,750 company members and matches more than 12,000 minority companies with these member companies. The certification process includes online application, fees, interviews, and site visits after approval.
- 8(a) Enterprise Development Plan of the Small Business Administration: The federal government promises to award 5% of all federal contract funds to small and disadvantaged companies with 8(a) designations every year. If your company plans to better compete for federal government contracts, this SBA specific minority business certification is required.
These organizations and institutions may also offer female-owned and LGBTQ-owned business certifications.
Apply for minority business grants
Minority founders are often self-reliant, launch crowdfunding activities, and even try to raise initial funds through family and friends.
You can fund your startup in various ways, but if you rely on your own financing, seeking grant funding is a good start. Grants.gov Distribute more than 1,000 small business grants for public search, and all federal government agencies post grant opportunities here.
For more insights and suggestions as a start-up capital for a few companies, check out our video on how ShearShare succeeded.
Here are some business funding opportunities for minority founders:
- Coalition to Support Black Enterprise Fund: This program aims to help small black businesses struggling in the pandemic. The alliance will award 300 grants, each with a grant amount of US$5,000.
- United States Department of Agriculture (USDA): This organization carries out a rural business development subsidy program for enterprises operating in rural areas with a population of less than 50,000. The program provides grants ranging from US$10,000 to US$50,000 to minority small businesses.
- Reconstruction block (RTB): As part of its small business relief fund, RTB provides 15 monthly grants to black business owners affected by the pandemic. Each grant has no specific monetary value, and freelancers and other creatives are encouraged to apply.
- First Nations Development Institute (FNDI): Deadlines and opportunities vary, but this non-profit organization provides financial and technical support to Native American organizations. FNDI has provided 2,150 grants to Native projects in 40 stages and regions, totaling USD 43 million.
- National Black MBA Association: Since 2017, the association has been holding scale-up competitions, offering grants ranging from US$1,000 to US$50,000 to black business owners. Company personnel must be members of the association to apply for this opportunity.
- Asian Women’s Donation Circle (AWGC): This grant is exclusively for businesses owned by Asian American women. AWGC awarded 11 grants in 2020, each ranging from US$2,500 to US$10,000. This year, the maximum grant amount is US$15,000.
- SoGal Foundation: This rolling plan awards $5,000 and $10,000 to black female founders and black non-binary entrepreneurs.
- Federal Express: Every year, FedEx holds a national small business funding competition. Although it is not only for minority small businesses, many of the past winners are minority founders. Winners will receive grants ranging from US$15,000 to US$50,000, as well as funding for FedEx printing services.
Each organization sends a monthly newsletter that contains the latest grants and funding opportunities specifically for minority founders.
Apply for minority business loans
Another financing option may be to apply for a loan.Historically, minority founders have been having difficulty obtaining commercial loans for the following reasons Credit inequality and discrimination, But there are still reasonable loan options.
Here are some business loan opportunities for minority founders:
- Accompanying capital: In order to specifically support immigrants, refugees and women entrepreneurs, Accompany Capital provides microloans ranging from 500 to 50,000 US dollars, with repayment periods ranging from six months to three years.
- U.S. Small Business Administration (SBA): SBA manages some loan opportunities, including their Micro loan program with Community Advantage Loan ProgramThe small loan program is open to all small businesses and provides loans up to 50,000 US dollars, with an average of 13,000 US dollars per loan. For the Community Advantage Loan Program, SBA encourages community lenders, mainly non-profit financial entities, to provide loans of up to $250,000 to minorities, women, veterans, and other underserved founders.
- Commercial Joint Fund: The fund is provided to NMSDC-certified companies, providing loans and credit lines ranging from US$250,000 to US$750,000, with a repayment period of up to five years.
- U.S. Department of Agriculture: As part of its industrial and commercial loan guarantee program, the USDA provides loan guarantees of up to $1 billion to local banks and direct lenders operating in rural areas with a population of less than 50,000 inhabitants. Minority companies can also directly apply for USDA loans, ranging from US$200,000 to US$5 million, with a maximum limit of US$10 million.
Utilize other minority programs and resources
Even if you may think you have figured it all out, a little extra guidance will not help.
Here are ten accelerators, entrepreneurial plans, and other resources for minority founders:
- This Visible hand The scholarship runs a 14-week virtual project, providing company construction services and up to US$200,000 in investment for underrepresented entrepreneurs. More than 30 researchers will be welcomed in the first session.
- Committed to the diversity of technology, Black founder Provide programs and organize events for black technology entrepreneurs.
- Hope action An eight-week entrepreneurship training program was launched to help entrepreneurs in low-income communities.
- SBA’s business development plan Help minority business owners to better qualify for SBA loans. Your company must be registered as a small business with SBA to participate.
- Minority Business Development BureauIt is an organization within the U.S. Department of Commerce that aims to provide minority founders with more opportunities to obtain capital and resources. The agency manages business centers across the country and presides over business development plans.
- 1863 Venture Capital– A business development organization dedicated to promoting people of color, women, immigrants, LGBTQ people, veterans, and business owners with physical disabilities – runs two accelerator programs.its Pipeline program Applicable to companies in the pre-growth stage, whose Acceler8 program It is to expand the scale of business.
- Y Combinator’s startup library Including rich resources spanning 15 years.
- National Minority Business Council Provide educational opportunities, entrepreneurship training camps, seminars, business assistance, etc. for minority business owners. Encourage to join.
- U.S. Congress Minority It is a non-profit organization advocating the rights of small businesses. The organization has chapters throughout the United States, responsible for organizing social events and providing local entrepreneurial resources.
- Founder Research Institute put it together List of African American Entrepreneurship Resources Provided 742 resources for entrepreneurs in the creative stage. If you are looking for accelerators, investors or even events, this list is a good place to start.
Indulge in inspirational tips from other minority founders
It’s difficult to start a business from scratch, but doing so as a minority can bring more challenges.
Many differences hinder minority business owners, but hope that these opportunities and resources can ease some troubles. Although starting a minority business may be the same as starting any other company, there are additional things you can do—such as obtaining certification—to take advantage of some unique opportunities created specifically for minorities.
I contacted some minority business owners who are working hard and still working hard to develop their own businesses. If you feel discouraged, here are some tips:
- “Understand that getting busy is difficult, and for minority founders, it is 10 times more difficult. If you are committed to realizing your dreams, then work hard and dig deeper to make your work self-evident. “— Stephanie Cummings, co-founder and CEO please help me.
- “Just do it-one of my favorite slogans. As a minority, we often don’t see similar faces on the cover of Forbes or elsewhere. This situation is slowly changing. But that doesn’t mean You can’t do this. What’s important is, in the final analysis, whether your business is really helping others.” — Nhon Ma, Co-founder and CEO Numbering.
- “Don’t be too obsessed with ideas. Take time to cling to your values and understand your position as a person-your values will be your guiding light, not your ideas.” — Ronnie Kwesi Coleman, co-founder and Chief Executive Officer Meaningful performance.
- “Use your network to build brand awareness organically, but don’t forget who will help you achieve your goals once you gain some momentum.” — Leela Bhatia-Newman and Mariana Magala, co-founders Regional local.