How best to boost minority-owned businesses
Research on startups shows that founders who are mentored by top-performing entrepreneurs are three times more likely than their co-located peers without mentors to become top performers themselves. Yet for many minority entrepreneurs, these types of connections are out of reach. Black business owners are more likely to report having difficulty securing access to credit, being able to raise money from family and friends, and having social connections to investment fund managers.
The effects of these disparities are telling. The Census Bureau’s Annual Business Survey highlights a massive gap in New Haven — Black residents are 22 times less likely to own a business than white residents. This is the most extreme disparity I’ve come across in New Haven, higher even than the Black male — white male incarceration gap (which is 16x). This contributes to the racial wealth gap and strains local employment. This fact is further underscored by the numerous conversations I have had with business owners in New Haven’s majority-Black and ‑Hispanic areas about their challenges.
For the past several years, I’ve been actively involved in mentoring minority- and women-owned businesses in New Haven. It started around four years ago when I got involved with Collab, an organization that provides funding and coaching for entrepreneurs from underserved communities. Since then, I’ve been able to help a number of new businesses by sharing the lessons I learned (the hard way) as an entrepreneur. The most recent example is Wabi Gallery, which opened a few months ago, but I’ve had the privilege of getting to know many other talented entrepreneurs who have made their dreams a reality, including DreamKit, Honeebee, Nessel, Kelewele, and Opal Stork.
Community organizations like Collab are incredibly valuable, but a coordinated effort across the city is needed to truly address this issue. New Haven’s administration must address this divide through all available means. Doing so will not only help address long-standing racial disparities but also provide economic opportunity and stability to our neighborhoods. As Mayor, I will execute on the following three initiatives:
1. Create community-centered business development in majority-Black and ‑Hispanic commercial corridors such as Dixwell Avenue, Grand Avenue, and Whalley Avenue. The Livable Cities Initiative (LCI) program has been successful in establishing community relationships and addressing blight in our residential neighborhoods. This type of community-mindedness and accountability are needed to develop our city’s majority-Black and Hispanic commercial corridors with intentionality. Economic development can expand its approach to business development by establishing business corridor specialists. These specialists can work with with business owners to address concerns such as crime, parking, traffic, and zoning.
2. Strengthen the city’s small business support for minority-owned businesses. The city’s economic development administration (EDA) currently runs a Small Business Resource Center (SBRC). We need to strengthen the support that the SBRC provides to minority entrepreneurs by filling gaps in the entrepreneurial ecosystem and leading entrepreneurs to the most helpful resources depending on their needs. A qualitative review of small business organizations can help target advice to entrepreneurs, and a network of available mentors can help provide the mentorship that new businesses need. The EDA should keep a detailed, publicly available inventory of minority business starts, growth, and exits, and the city must revisit its minority contracting requirements to ensure that Black-owned businesses are specifically prioritized, as the share of Minority and Women Business Enterprise (MWBE) contracts that currently go to local Black businesses is abysmally low.
3. Integrate entrepreneurship training and experiences into our public education. Regardless of a student’s chosen career, the skills of entrepreneurship will be helpful in their career growth. An “Entrepreneurship 101” elective available to all high school students could teach the transferable skills of business financing, balancing a budget, and assessing a business opportunity. Our school system and higher education institutions should also be more closely tied to opportunities in private industry. By further incorporating high-growth industries into our educational system, we can ensure that students have access to quality jobs and ensure that private businesses are committed to growing a diverse workforce. Like in many American cities, Black and Hispanic residents of New Haven have historically been marginalized through government redlining, barriers to loans, and workforce discrimination. Our city is not doing enough to change this status quo and create economic empowerment.
I was motivated to run for Mayor of New Haven because of issues like this. I have worked with other regions to achieve inclusive economic growth and we have the potential to achieve real change. It is time that we as a city address these inequities head on. By supporting minority business ownership and investing in Black- and Hispanic-majority commercial corridors, we can create a sustainable legacy of wealth and economic empowerment, and improve the overall social and economic conditions of our city.