By Aaron Allen, The Portland Medium
According to the Small Business Association, almost half of all U.S. employees work for small businesses, defined as companies with fewer than 500 employees, and a staggering 99 percent of all U.S. companies fall under the “small business” designation.
Entrepreneurship can be a steppingstone to generational wealth. In recent years, however, small business owners have faced many challenges, and that’s particularly true for those in majority Black, Hispanic and Latino communities. Fortunately, data is showing a strong trend toward improvement and normalization.
“Minority-owned businesses are fueling the U.S. economy – driving growth, innovation and job creation,” says Shelia Winston, Senior Business Consultant with Chase. “It’s important that we provide them with tools, resources and network capital to help them take their business to the next level and create and sustain wealth long-term.”
Many small businesses have more cash than they did before the pandemic, notably the smallest businesses with less than $100,000 in annual revenue. With more than two-thirds of small businesses expecting increased revenue and sales this year, they’re planning to put that money back into their workforce, to hire and retain employees by increasing wages and offering upskilling and training opportunities, according to JPMorgan Chase’s Business Leaders.
“Basically they (small and minority businesses) have increased their cash flow because they have gotten to a point where business owners are becoming more conscious of their money and where it’s going,” says Winston. “We have a lot of tools in place that help to educate business owner as they navigate their individual industries.”
Access to capital is one of the top barriers for small businesses, banks play a critical role as promoters in small business success.
Over the last few years, JPMorgan Chase has continued its commitment in helping minority-owned business succeed, including through its $30 billion Racial Equity Commitment that looks to close the racial wealth gap through new mentorship programs, events, and expanded access to credit for business owners.
Owning a business is neither a simple or easy task and can be a frustrating process. According to Winston, Chase wants to make sure that small business owners have a plethora of resources and information available to help them at any stage of their business. Whether it’s looking for guidance on how to start or grow a small business, or access financial tools, here are some important steps to consider.
Chase offers the following suggestions to help businesses and prospective entrepreneurs get on the right track towards sustainability and success.
• Starting a business: Prospective owners can consider a few important foundational pieces, including writing a business plan, establishing a business bank account and applying for and filing the right permits and licenses. Also, prospective business owners should think through their business structure – will they be a sole proprietor, operate an LLC or choose another structure? Gathering funds and deciding where to do business are two more key steps to take before finally launching a company.
• Growing a business: As business owners continue to generate revenue, they can shift their focus to growing and scaling their business. Future financing plans could include applying for additional loans, grants or investor funding. Business banking accounts can be leveraged to help meet the goals of a business owner.
• Forging ahead: If a business owner has a few years of success under their belt, they can discover new ways to optimize their business and streamline operations. That includes keeping cash flow healthy, continuing to build their customer base, and looking for digital tools to help simplify processes like invoicing and payments.
• Small business owners can also access new tools designed to help lower the barrier to entry to accessing capital and the tools needed to set them up for success. We want to help expand credit access in majority Black, Hispanic and Latino communities for business owners who otherwise might not be approved or receive it on less favorable terms.
“The whole thing that we (Chase) provide is education,” says Winston. “Education that [business owners] will need to move forward. A lot of times business owners can get frustrated with their growth or, as they try to access more capital, frustration can set in as to why they are not getting approved and most important, hitting the nail on the head when we talk about credit scores. Credit scores are so essential for business owners in accessing more capital.”
“Whatever industry that one may be in, there are some basic things that you will need,” Winston continued. “A business model or plan, how you are going to forge ahead as far as how are they going to grow by building your customer base to continue to grow, also looking at your processes, how to streamline your process, particularly if they haven’t been effective. So, you have to be willing to look at your big picture as far as your growth, what’s going to bring in more profits, things you may have to eliminate and things you may want to expand upon.”
