Lessons Learned: Supporting Black, Hispanic, Indigenous & Women Small Business Owners

By:

Lauren Boswell

November 4, 2022 - (6 min read)

The National League of Cities’ Center for City Solutions provides research, education and analysis on key topics and trends that impact the people in America’s communities. The teams across the Center for City Solutions provide creative solutions to improve residents’ quality of life, inspiration and ideas for local officials to use in tackling tough issues, and opportunities for city leaders to connect with peers, share experiences and learn about innovative approaches in cities.

Housed within the Center for City Solutions, the City Inclusive Entrepreneurship (CIE) program was created with support from the Ewing Marion Kauffman Foundation. The program asks city leaders to commit to policies, programs and practices that give underrepresented entrepreneurs greater opportunities for economic advancement.

The CIE program helps match local officials with at least one commitment option, chosen from a “menu” of interventions. This menu’s purpose is to provide city leaders with a range of proven, place-appropriate strategies to drive racially and geographically inclusive economic development. Since the inception of the program, the CIE network has grown to include 212 cities that have made 346 commitments over the past three years.

At the culmination of year 3, the CIE team created research briefs to showcase the best practices, progress made, and lessons learned for each of the commitments over time. Our research details city-led initiatives that have become institutionalized and sustained through close partnerships with entrepreneurial support organizations, private and public institutions, and most importantly, communities and their residents.

While menu options evolve each year, the commitments remain organized around the four pillars of America’s New Business Plan, to ensure that “anyone with an idea has access to the opportunity, funding, knowledge, and support to turn it into a reality.” The four pillars of America’s New Business Plan are opportunity, funding, knowledge and support.

Opportunity – Level playing field without red tape.

Our commitment menu offerings:

Anchor Procurement: Increasing supplier diversity through equitable anchor procurement strategies.

Public Procurement: Improving access to public procurement opportunities for entrepreneurs of color.
Working with Startups: Rethinking how your city solicits technology solutions for civic problems to attract more potential partnerships with startups and tech-based entrepreneurs. 
Leadership Diversity: Diversifying the leadership of your entrepreneurial ecosystem and economic development organizations to include more women on boards and commissions.

From public and anchor procurement opportunities left on the table to a lack of representation on economic development boards, minority businesses excluded from traditional entrepreneurship networks miss critical business opportunities. Cities can play a role in eliminating red tape for minority business owners through policies, programs and practices that require collaboration across a city’s business infrastructure. Our work with cities showed that leveling the playing field and eliminating red tape is a long-term project that requires detailed data collection, specific training on local and state registration processes and leadership opportunities and getting buy/soliciting support from partners and city department representatives toward a common goal.

Funding – Equal access to capital for historically underrepresented entrepreneurs.

Our commitment menu offerings:

Microlending: Building a platform for microlending in your community to serve entrepreneurs without access to traditional finance.
Ownership & Optionality: Helping innovative Black-owned firms raise venture capital and connect to mentorship networks.
Working with CDFIs: Connecting entrepreneurs and small business owners with CDFI financing.
Equity Crowdfunding: Help local businesses raise equity capital from community-based investors in places where traditional venture capital is absent.

Our communities are full of entrepreneurs and small business owners who want to grow but lack access to traditional capital due to historic racism and divestment in Black and Brown communities. Without flexible, affordable financing options for small businesses, their financial needs go unmet, and their business ultimately closes. Our learnings illustrated that cities must support opportunities for capital access for local businesses through establishing forums to collaborate with diverse banking institutions and adopting practices to work with local startups that provide more flexibility and efficiency.

Knowledge – The know-how to start and grow a business.

Our commitment menu offerings:

Ecosystem Mapping: Identifying and connecting the small business support resources in your community to provide a one-stop hub for local business owners.
Entrepreneurship Curriculum: Establishing a local affiliate for entrepreneurship curriculum to equip aspiring entrepreneurs with the skills they need.

Knowledge is one of the most critical gaps in business growth for small, minority-owned businesses. Not only are entrepreneurs responsible for the knowledge pertaining to their product but are also tasked with knowing the principles of marketing, accounting, human resources, and local and state government regulations. Our work found that cities can inform curriculum programs and practices that help entrepreneurs access the skills, insights, tools, resources and peer networks needed to start and grow successful businesses. Our work showed that mapping and improving access to existing resources is a foundational practice for cities seeking to make their entrepreneurial ecosystem more inclusive.

Support – The ability for all to take risks.

Our commitment menu offerings:

Informal Entrepreneurship: Bringing informal entrepreneurs into the formal economy and providing them with the resources they need to grow their business.
Hispanic Business Owners: Lowering barriers for Latino entrepreneurs to start, grow, and sustain their business.

As the racial makeup of the United States continues to evolve, cities will see a rise in entrepreneurs that need tailored, linguistically accessible resources and support to grow and sustain their businesses. Cities can use their convening power to bring together resource partners that create sustainable programs to support the needs of their city’s minority residents. Over the course of the program, we learned that to be successful, cities must value local experience, build trust with marginalized communities through regular communication and collaboration, and target early-stage businesses.

By spotlighting each commitment in research briefs, we hope city leaders can take away tangible, sustainable solutions to the various challenges Black, Hispanic, Indigenous, and women small business owners face.