|Race remains major barrier to state’s entrepreneurs of color|
|Business owners struggle to access capital, technology|
|Published Wednesday, December 5, 2018 11:15 am|
|PHOTO | ASHLEY MAHONEY
|Jeff and Cheryl Tuning at Coppa Coffee and Tea in their SouthPark Mall location. A report by the Budget & Tax Center found entrepreneurs of color in North still lack access to capital and technology that could grow their businesses and economies in their communities.|
Growing entrepreneurship in North Carolina communities of color is a daunting task, according to a new report.
The study from the Budget & Tax Center found accelerating businesses owned by people of color has great potential to spur local economic growth and drive wealth, which has just started to grow in recent years. Between 2007-12, the number of businesses owned by people of color grew by 40 percent according to BTC, a project of the Raleigh-based North Carolina Justice Center.
“Businesses across North Carolina boost local economies by bringing goods and services to their communities, adding jobs and building wealth,” said Patrick McHugh, a BTC senior economic analyst and co-author of the report. “There is a lot of untapped potential in businesses owned by people of color that could help communities across the state thrive.”
The report also highlights historical barriers – primarily based on race – that limit access to capital, technical expertise and large public and private sector contracts, its impact on the state economy and how business accelerators can help. For instance:
• Bringing sales for business of color equal to their white-owned peers through policies and investment would mean $36 billion in annual sales, an increase of nearly $20 billion. Developing employment parity would mean an increase of nearly 200,000 jobs for businesses of color, up from 145,000.
• Only 18 percent of all businesses in the state have reached a scale that includes employees, but only 10 percent of companies owned by people of color are on that level. White-owned businesses with employees average sales of just over $2 million compared to less than $1 million for companies owned by people of color.
• In Eastern North Carolina, a primarily rural area where communities of color are proportionally larger, business ownership remains skewed toward white entrepreneurs.
As a result, there’s economic disparity in the Northeast, Southeast and the Sandhills regions, where people of color represent nearly 36 percent of the total population and own 24 percent of total businesses, but earn about 2.7 percent of total sales.
• So-called “minority” business accelerators, such as a program in Greensboro that has generated $2.1 million in revenue and new jobs are springing up across the country to provide eligible firms with the technical and financial support needed to compete for larger contracts while connecting to anchor institutions.
“We have seen what accelerators can do to help businesses of color thrive in North Carolina,” said William Munn, co-author of the report and a Budget & Tax Center policy analyst. “An effort to expand accelerators should be paired with intentional efforts to drive public contracts to businesses of color in order to expand our state's economy and help everyone thrive.”
|Wow! That is surprising but not really. I have spoken with black millionaires and they still struggle with the same issues so it seems not matter how big you make it, if you are black, you still suffer. I as a minority business owner see it myself. I provide financial consulting to businesses and try to prepare clients to make sure they are lending ready before seeking funds and help them manage cash flow more efficiently.|
|Posted on December 6, 2018|
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Business owners struggle to access capital, technology