Why minority-owned small businesses may need extra COVID recovery boost

RICHMOND, Va. -- Small businesses are recognized as the backbone of the economy which is why helping them rebound is critical to Central Virginia's recovery from the coronavirus pandemic. Minority-owned businesses, specifically, might need an extra boost.

Nestled in Richmond's East End is J&G Workforce Development Services.

"We're located in the heart of one of our low-income communities," said CEO and president, Grace Washington. "We have to be accessible to the residents, because that's who we want to assist in improving their lives."

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Much of Washington's work involves connecting minorities to jobs. As a Black business leader herself, she knows firsthand that career success for people of color can be an uphill battle sometimes.

"Whether it be reentry, or substance abuse, or mental health, lack of skills, lack of education, whatever those barriers are, we can get them into the system and start them on a career pathway," Washington said.

Many of those struggles were dramatically heightened by COVID-19.

"When the majority population catches a cold, our minority communities have the flu," Washington said.

That's one reason why Washington and several other Black entrepreneurs are supporting a new research project highlighting the challenges faced by small business owners of color.

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"As Black and Brown business owner, there's always been systemic racism, there's always been redlining, there's always been an uneven share of equity," said Shirley Crawford, the executive director of the Women's Business Center RVA. "And then the pandemic just made it exponentially worse."

Crawford, along with Carol Reese, president of Resources Inc., has been at the forefront of the Small Business Ecosytem report which shows minority-owned establishments had higher closure rates due to the pandemic.

"There are some businesses that won't come back. They're shuttered for life. They're done," said Reese.

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Between March and June 2020, 41% of black-owned businesses closed, 32% of Latino-owned businesses closed, and 26% of Asian-owned businesses closed.

Crawford and Reese say that reality stems from a plethora of reasons including the kind of customers they serve and a lack of access to Covid relief.

"If people don't have the training, the knowledge, the wherewithal, the connection, the resources, then they're a duck in water," Crawford said.

The report identifies four ways to provide minority-owned businesses with support:

• "Ecosystem building and collaboatio: establish and sustain coalitions and digital hubs to connect business owners, capital and service providers, funders, and other stakeholders across the small business ecosystem
• Tailored Small Business Support: establish and enhance small business services to increase access and availability of tailored business support for entrepreneurs of color
• Access to Flexible Capital: expand the availability and access of flexible capital to strengthen businesses, community financial institutions, and responsible investors
• Avenues for Market Opportunities: expand growth opportunities for business owners of color by developing new sales channels through digital, neighborhood-based, and regional forums"

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Crawford, Reese, and Washington believe that if these plans are put in place, it could be a game changer for the community.

"If you are a business that's going through it right now and you are just like, 'Ahhh. There is hope,'" Reese said.

Click hereto read the full report.