The 2022 Annual Business Survey (ABS) revealed that there were around 5.9 million employer firms in total. Out of these, 1.2 million (21%) were owned by minorities, 304,823 (5.2%) were owned by veterans, and approximately 1.3 million (22%) were owned by women. These businesses together generate over $1.8 trillion in revenue and employ 6.3 million workers. However, some minority-owned businesses are facing challenges that are holding back their growth. Bank of America's 2022 Women & Minority Business Owner Spotlight highlights that 46% of Women & Minority Business Owners have faced difficulties in accessing capital, among other challenges. Minority-owned businesses should remain vigilant and watch out for these challenges in 2024.
Minorities are statistically less likely to obtain loans, and when they do, they often receive lower amounts and higher interest rates. According to the Minority Business Development Agency (MBDA), minority-owned businesses have a loan denial rate of 42%, three times higher compared to non-minority-owned firms, with a denial rate of 16%. This disparity could be due to discrimination and bias from investors and lenders, as minority entrepreneurs may not be taken as seriously or given the same opportunities as their non-minority counterparts.
Minority-owned businesses are often undervalued, with an average undervaluation of up to $5 million, according to FasterCapital.com. This could be due to several factors, such as a lack of visibility and recognition for minority business owners, as well as the relatively smaller size of their businesses. The lack of recognition may lead to fewer opportunities for these businesses to make a positive impact on society, which, in turn, can result in financial difficulties for the owners.
Minority business owners often encounter challenges when it comes to networking and connecting with other minority entrepreneurs, investors, and financial institutions. This is due to the underrepresentation of minorities in the industry and the limited resources available to them. According to SupplierGateway.com, the rate of minority entrepreneurs' creation is low, which leads to fewer successful businesses led by minorities. These challenges make it harder for minority enterprises to get the necessary funding for small business growth, seek advice, gain perspective, or draw new ideas or funding.
Creating a nurturing environment where minority entrepreneurs can feel empowered to thrive and succeed is crucial. This requires promoting diversity and inclusivity in all aspects of business, from leadership positions to supplier networks. By recognizing diversity as a strength and actively working to remove obstacles to success, we can unleash the full potential of minority-owned businesses and drive economic growth and innovation for everyone.
If you are a minority business owner interested in expanding your network and connecting with other entrepreneurs, we would like to invite you to the upcoming CEO Club event on April 24, 2024. This event will provide you with an opportunity to engage in insightful discussions and connect with a community of like-minded business owners. Don't miss out on this excellent opportunity! Click the link below to RSVP and secure your spot today.
RSVP for the event online at:
https://integrobank-20681670.hs-sites.com/ceoclubapril24
The When & Where
DATE: April 24, 2024
TIME: 5:00 PM - 7:00 PM
LOCATION: Integro Bank Headquarters
16215 N 28th Ave, Phoenix, AZ 85053