By Tiffany Douglas
2020 was a challenging year. While small businesses nationwide faced obstacles brought on by the coronavirus, Black small business owners in particular have been disproportionally impacted by the pandemic, with one study showing that half of those businesses may not survive. While this is real and ongoing, Bank of America’s new research found Black business owners remained resilient and flexible as they navigated an evolving and uncertain business landscape. Our study found 48% of Black entrepreneurs retooled their operations – double that of the national average for all small businesses.
In Detroit, many Black owned businesses found creative ways to reinvent their enterprises by developing new products or services, and even more donated resources to support relief efforts in their local communities. While no one can predict what our path to economic recovery will look like, we know small businesses will play a significant role. To support this recovery, entrepreneurs can take three steps to reignite growth and plan for financial success this year.
Reevaluate your business plan given today’s environment. Flexibility is the name of the game. Changing environments require your business plan to evolve and address areas of need and growth, while identifying new or uncovered risks. Ask yourself, how did your business fair last year against the projections you made heading into 2020? Are there successes from the second half of 2020 on which you can build? What solutions worked best for your business as you managed the impact of the coronavirus? As we’re still in a time of uncertainty, err on the side of caution and ensure your plan allows room for continued evolution and adjustment.
Explore your financing options. Our team at Bank of America is taking steps to directly engage with small business owners to ensure you have access to the tools and resources you need to secure funding. Our small business bankers continue our support as you navigate the Paycheck Protection Program process and we are prepared to deliver traditional loan product options such as purchasing inventory, refinancing debt or financing account receivables. When exploring financing options, a few questions to consider may be: What goals have you identified in your business plan that require additional financing? Are you looking to boost your headcount? Did you have expansion plans that were held off? Are any structural or technological enhancements needed in the coming year? Once you identify your goals for 2021 and beyond, sit down with your banker to determine the right financing solution for you. You may also want to connect with a local Community Development Financial Institution (CDFI) for financing options as they work to increase access to capital for small, diverse and local start up and growing businesses.
Go digital. Businesses everywhere have adjusted aspects of their operations due to the public health crisis, including enhancing sanitation practices, changing primary revenue streams and shifting sales from brick-and-mortar to online. Because physical distancing may continue for some time it’s important to invest in digital banking tools that will limit in-person interactions, provide ease, expedite access and save time. Your banker can help you with the best digital options for your needs. For example, at Bank of America we offer a full suite of small business digital capabilities, including Cash Flow Monitor, a no-cost dashboard that provides an easy way to manage, track and project your business cash flow.
The pandemic created tremendous obstacles for small business and their owners, challenging you to find innovative ways to meet the needs of your business, employees, customers and communities. Following the steps outlined above may assist you with the opportunities and challenges 2021 is likely to bring. The news that is especially encouraging for the small business community is that our research found four-in-five Black entrepreneurs say that once we’re on the other side of the pandemic, they believe small business will return to being the backbone of the U.S. economy. We look forward to partnering with you and your business to make that a reality!
Tiffany Douglas is the Michigan Market Executive for Bank of America
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