Building Minority Business Opportunities
Most in Topeka are still white males, but the opportunities for those with different ethnic, racial and gender identities are growing. For minorities who are wondering if the time is right to make a step toward entrepreneurship, resources targeted at traditionally “disadvantaged” groups are designed to break down hurdles that may have prevented ownership in the past.
Glenda Washington, vice president of entrepreneurial and minority business development at GO Topeka, seeks out minority business owners and encourages them to learn about the resources available in the community and put them to use.
She says many people have been scared to open a business in recent years, but small business ownership for all entrepreneurs is on the rise.
“People are putting their heads together and are getting really serious about starting businesses in Topeka,” Washington said. “We really just want them to get all of the resources they need.”
Washington encourages minority business owners to tap into three areas of resources:
In the past it was common for entrepreneurs with an idea and a dream to just go out and start their own business. The rough economy and many business failures in recent years have awakened people to the fact that training and a solid business plan can make the difference between success and failure.
“When you are starting a business, you really don’t know what to expect, so a lot of people need that education,” Washington said.
Planning helps reduce the risk, or at least helps potential entrepreneurs think through potential risks before they get started. GO Topeka offers workshops, one-on-one counseling and small business counseling.
Karl Klein, director of the Small Business Development Center, agrees that tapping into available resources can be vital for potential minority business owners.
“The biggest picture is trying to recognize there are tools out there for specific markets and understanding which ones apply to your business and to your business plan,” Klein said.
The Fast Track Program is designed to help entrepreneurs develop a business plan. The 10-week program exposes entrepreneurs to others in the community who are thriving in certain areas of business. New business owners are given the chance to examine how the experiences of others might help their business.
“Interaction is key. At the end of the day you should have all the components to create a business plan,” Washington said.
National studies show that access to start-up capital is one of the biggest hurdles for minority business owners. While minority-owned businesses are creating jobs, they often have a hard time getting access to working capital to pay the bills and keep things going (U.S. Commerce Department’s Minority Business Development Agency, 2010).
In Topeka, the Topeka and Shawnee County First Opportunity Fund helps level the playing field. The program has been created to assist businesses in need of working capital for expenses such as inventory, fixed assets, construction or capital improvements. Eligible businesses must meet at least one of following criteria:
Provide essential or important services in low and moderate income communities;
Create or maintain jobs for low and moderate income persons;
Provide services or products that create a lasting contribution to the region’s economic development.
The First Opportunity Fund offers up to $15,000 line of credit or up to $50,000 term loan, both depend on existing credit history. More information is available at www.letsgrowtopeka.com.
The idea is more job creation, business expansion and a strengthening of the financial foundation for small businesses in places where they might not normally thrive. Washington says loan programs like this are aimed at helping business owners get to the next level.
The Small Business Administration and the Department of Commerce also offers a variety of lending programs and loan guarantees for minority business owners.
“We don’t make the loans. We just make them better,” said Steven Castaner, division director for business at the SBA’s office in charge of Northeast Kansas.
Another way minority business owners can grow their business is to look at certifications offered by state and federal government. These certifications are designed to help increase the visibility of small businesses. Government agencies, private corporations, prime contractors and school districts look for and utilize certified small business owners.
The State of Kansas offers certifications for women-owned, disadvantaged and minority business enterprise. A business that qualifies for any of these certifications is eligible for certain priority opportunities on government-contracted work. While the certification programs only work for those in certain industries, they can be a significant resource for small businesses.
“It’s for someone who has been in business for a little while and they want to use access to government contracts as a mechanism to get their business to grow,” Castaner said.
The federal government also offers an 8a certification. Those certifications provide access to counseling, training and other guidance for businesses and individuals considered socially and economically disadvantaged. Certain work is set aside for businesses with 8a certification. While any person can qualify, certain minority groups are automatically considered disadvantaged.
“The presumption is that if you are socially and economically disadvantaged you have not been able to compete in the marketplace as well as someone who is not socially or economically disadvantaged,” Castaner said.
The real advantage of certification is being able to better compete for government contracts.
“The certifications don’t make a bad business good, they help a good business position itself in the marketplace better,” Castaner said.
There are currently 16 SBA approved certified minority businesses in Shawnee County.