When Michelle Robinson started her vegan cosmetics brand DEMIblue Natural Nails in St. Louis. Louis two years ago, he struggled to fund it.
“I used a lot of my personal savings to fund the start-up of the business,” he said. “At the time, I couldn’t find financing resources that would support the start-up cost and I didn’t want to take out big loans.”
Michelle Robinson is the founder and owner of the vegan cosmetics brand DEMIblue Natural Nails in St. Louis. Louis. Having initially struggled to secure funding to start his business, he has been able to scale production and get his products to Walmart Marketplace.
That changed recently when Robinson secured one of six competitive positions at the University of Missouri-St. Louis ’inaugural accelerator of diversity, equity and inclusion. It came with a $ 50,000 non-dilutive grant that changed the business. But these opportunities are scarce.
Latin and black business owners of St. Louis is facing a $ 13 billion annual gap that separates the amount of funding they need and what they can secure. This statistic is one of many disparities outlined in a new report released this month that shows how the St. Louis region. Louis fails to support color entrepreneurs.
National companies Next Street and Common Future, funded by JPMorgan Chase, partnered with local economic development leaders to assess the barriers facing color entrepreneurs. They have studied disparities in nine cities across the country, including Chicago and San Antonio, and outlined ways to create more equitable small business ecosystems.
The new report on St. Louis sets out a set of solutions to reduce racial differences in business ownership, income and employment over the next five years.
During a webinar earlier this month, Next Street managing partner Charisse Conanan Johnson said her research in St. Louis. Louis found great distances between small businesses owned by people of color and their white counterparts.
For example, on average, white-owned companies earn more than 12 times more revenue than black-owned companies and about twice as much as Latin-owned and Latino-owned companies.
“That’s alarming, isn’t it?” Johnson said. “We want to build a more inclusive and more equitable ecosystem, so it’s important that we’re rooted in data about where we feel today and how we want to grow from here as we move forward.”
Johnson worked with Erica Henderson and Gabriela Ramírez-Arellano for a long time, leaders in economic development to assess the small business landscape over the past five months.
“The piece that keeps me going is something we already knew: that Saint Louis is very fragmented,” Ramirez-Arellano said. “But there is really a lot of collaboration between organizations, small business owners and non-profit organizations. But it is not anyone’s responsibility. “
He said this makes it difficult for color entrepreneurs to find the local resources they need to start and grow their businesses. He said there is a great need for culturally and linguistically adequate services, as well as funding, for entrepreneurs from underserved communities.
The report sets out four steps in action:
- Organize a coalition of funders to provide capital for several years to implement solutions that better support color entrepreneurs.
- Identify “ecosystem builders”: a handful of local organizations that can drive regional collaboration and be responsible for ensuring the implementation of the plan.
- Formalize a people’s advisory board that will encourage collaboration and represent the needs of small businesses and the organizations that support them.
- Take immediate action on “low hanging fruits” or areas where companies urgently need support due to the COVID-19 pandemic.
Ramirez-Arellano said there has never been a better time to address equity issues, as the pandemic has disproportionately impacted small business owners of color.
“The discrepancies are so obvious that it’s hard for someone to say, ‘No, that’s not true,'” he said.
Ramirez-Arellano and Henderson are currently working to build a network of organizations that will work together to implement policies that better support color entrepreneurs and hold each other accountable for reducing disparities in the region.
“The main goal is how do we give access to small business owners: access to finance and access to technical assistance?” she said.
Ramirez-Arellano has secured funding from JPMorgan Chase, but said they will need more philanthropists to get into the job to cope with the work that needs to be done.
Read the report here:
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