Minority-Owned Small Business Growth

The number of minority-owned small businesses continues to grow throughout the U.S. In its 2018 National Report, Kauff­man’s Indicators of Entrepre­neurship reported that the share of new entrepreneurs represent­ing minority groups is reaching 50 percent, almost double what it was 25 years ago.

This is good news for a num­ber of reasons. Black-owned busi­nesses strengthen local econo­mies, foster job creation, stabi­lize neighbor­hoods and help reduce pover­ty. Successful owners create generation­al wealth and provide educa­tion opportu­nities for their families. Black businesses are historically civ­ic-minded, helping create strong communities through partner­ships with churches, schools and neighborhood groups.

Unfortunately, studies also find that black-owned business­es face disproportionate chal­lenges in starting and sustaining their operations. Lack of capital, access to financing and capital readiness are hardships many minority entrepreneurs face. Be­cause of their urban locations, many black businesses have higher insurance premiums, are subject to city taxes, have a dif­ficult time retaining employees and lack the resources to develop a wide customer base.

For these reasons and more, it is critical that we all advocate for black businesses – both in our personal and professional lives. Consider minority businesses for all of your personal spending – everything from tax preparation and high fashion, to handmade goods and fine dining.

As business leaders, we must stand up programs that help mi­norities become business own­ers. I’m proud of DEGC’s Motor City Match, which has launched more than 100 brick-and-mor­tar businesses in the city, and another 300-plus home-based businesses in Detroit. With our partners, we’re relaunching a procurement program that cer­tifies Detroit businesses and connects them with local and na­tional buyers. Additionally, our philanthropic partners provide financial support for programs aimed at closing the gaps that impede business growth.

There is no overstating the importance of black-owned busi­ness to our continued develop­ment and growing the black mid­dle class in Detroit. While 35,000 Detroiter’s have moved out of poverty since 2013, Detroit Fu­ture City reports that the city’s middle-class population lags be­hind the region, state and all ma­jor U.S. cities.

Frederick Douglass once said, “Who you give your money to, is who you give your power to.”

In Detroit, the nation’s largest black-majority city, people of col­or must be represented at all lev­els – especially as business own­ers. We all have a role in making that happen.

Kevin Johnson is the Presi­dent and CEO of the Detroit Eco­nomic Growth Corporation

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