Travel anywhere in Nevada and you will see and experience the presence of minority businesses. Their growth in recent years has been no small feat. Not only have the numbers been quite phenomenal, but also these minority entrepreneurs have seized all sorts of significant opportunities for themselves across our great state.
The #s in Nevada
According to the Minority Business Development Agency, a branch of the U.S. Department of Commerce, there are eight million minority-owned businesses in the United States today, a 38 percent increase from 2007. These firms generate about $1.4 trillion in annual sales, which is a sizeable contribution to our nation’s economic activity.
Here in Nevada, consider the following facts to understand the remarkable growth and impact of minority-owned businesses:
In 2002, there were about 24,318 minority-owned firms in Nevada, representing about 15 percent of all businesses in the state and generating $4.3 billion in sales. Nearly 4,300 of these firms employed people other than the owner, resulting in 31,887 jobs and annual payrolls of over $800 million.
In 2007, just five years later, there were 45,533 minority-owned businesses here, representing 21 percent of all business firms in Nevada and generating more than $8.5 billion in sales. Over 6,100 of these firms employed people other than the owner, resulting in 59,163 jobs and annual payrolls of more than $1.6 billion.
In 2012, the time of the last U.S. Economic Census, there were 71,864 minority-owned businesses in Nevada, representing about 32 percent of all business firms in the state. These minority-owned firms generated nearly $12 billion in sales. Over 7,500 of the firms employed people other than the owner, resulting in 62,649 jobs and annual payrolls of more than $1.8 billion.
That’s a three-fold increase in the number of businesses, nearly a tripling of sales, and a doubling of jobs in only 10 years — almost half of it taking place during the Great Recession. The next U.S. Economic Census will take place next year, but it is likely to show these growth trends continuing. The number of minority-owned firms in Nevada increased by 38 percent between 2007 and 2012, during the depths of the greatest economic downturn since the Great Depression. The fact that these firms also increased payrolls by 22 percent (directly creating almost 3,500 new jobs) and saw an increase in sales of 40 percent (a $3.4 billion boost to economic activity) is indicative of a strong, healthy trend. This is good news for minority owners and the state.
Factors Contributing to the Growth of Minority Business
A brief report titled Minority-Owned Businesses, published by Inc.com a few years ago, still sheds light on the factors that have contributed to the growth and success of minority-owned businesses. In addition to mentioning a shift in population demographics, affirmative action programs, and general growth opportunities, it reveals important reasons for the explosive growth in minority-owned business in the United States. Here is the actual list of factors presented in the report:
Community Support: Many entrepreneurial ethnic minorities benefit by instituting businesses within their communities that meet needs of that community. When these businesses succeed, the individual communities gain a greater measure of autonomy and financial health, thus laying the groundwork for additional businesses. Community banks have been among the most visible supporters of minority entrepreneurs seeking to revitalize moribund neighborhoods and business districts. Finally, many immigrant groups have done a laudable job of supporting entrepreneurs within their communities.
Increased Networking: As the number of minority entrepreneurs has grown, so too has the number of organizations, associations, and other groups that have formed to provide assistance and information to minority-owned businesses. In addition, minority entrepreneurs have become adept at taking advantage of established business practices such as networking to assist them in opening their own firms. Networking — interactions among business people for the purpose of discussing mutual problems, solutions, and opportunities — is extremely important to minority business owners.
Programs: In addition to federal set-aside programs, a variety of local, state, and federal agencies have extended help — whether in the form of legal expertise, grants, loans, or some other type of assistance — to encourage the establishment of minority-owned businesses.
Corporate Acceptance: Observers point to increased corporate acceptance of minority-owned businesses as a key factor in the successes that minority-owned enterprises have registered over the past two decades. Corporations and large firms are buying from minority businesses in greater and greater numbers.
Urban Revitalization: Many minority entrepreneurs have established themselves as business owners in urban areas at a time when several large cities have experienced heartening signs of rebirth. Moreover, state and federal agencies have shown increased willingness to provide greater assistance to business owners and others who are intent on reversing declines in urban areas, which typically contain large minority populations.
Higher Levels of Education and Business Experience: Modern-day minority-owned businesses are significantly stronger than they used to be in several important respects, most of which have to do with being better educated, more experienced, and better financed entrepreneurs.
Access to Financing: Minority-owned businesses have benefited from several economic trends. Perhaps most importantly, black, Hispanic, Arab, Asian and other minority business people have benefited from the financial community’s belated recognition that small businesses are powering much of the nation’s current economic growth, and that small companies will likely become an even more important component of the U.S. economy in the coming years. Moreover, the emergence of alternative financing sources friendly to minority entrepreneurs has made it easier for minority-owned businesses to secure funds for start-up costs or expansions. Finally, agencies such as the U.S. Small Business Administration (SBA) have increased the volume of loans to minorities (for example, minority business owners received a record $8.65 billion in approved SBA lending in fiscal year 2016).
Expansion Into Emerging Industries: Traditionally, minority business owners have been primarily involved in small-scale retailing and service industries such as restaurants, beauty parlors, dry cleaners, laundromats, grocery stores, etc. But increasing numbers of minority entrepreneurs have successfully ventured out into realms where minority owners had previously been less commonplace, such as manufacturing and high-technology industries.
Undoubtedly, the impact of minority business owners on the economy will continue to grow in the coming years. The future for them is bright and our call for action is simple: no matter where we are in Nevada, let us continue to wholeheartedly support the success of these minority entrepreneurs.
ACCESS TO ASSISTANCE
In an effort to support the growth and development of the business sector in Nevada, the Nevada Department of Business and Industry offers an online business resource portal. The Business Resource Center provides the most comprehensive listing of resources, information, contacts and learning opportunities to help you – the person running a business or interested in starting one. It is simply one way we are working to enhance our state’s entrepreneurial environment. The Business Resource Center can be accessed by going to http://business.nv.gov
Marcel F. Schaerer is the deputy director for the Nevada Department of Business & Industry Office of Business, Finance and Planning.
