When I was younger, my mother started a side business selling household goods, like figurines, pictures and other small items. I’d help out occasionally, accompanying her to purchase merchandise, sell items and track revenue. She started this business as a way to gain financial independence and supplement her income. While my mother had aspirations of growing her business, she was unable to do so. Lack of funding, little understanding of how to grow a business and no mentor to help guide her along the way all proved to be insurmountable challenges.
Nevertheless, I made some keen observations from my mother’s experience. I saw the pride and confidence she had when talking about her business. I also could see the potential that small business ownership could have to powerfully affect a person’s life and change a family’s destiny.
As we recognize the contributions of the great people of color who have shaped our world during Black History Month, we’re also reminded of recent studies showing that the wealth gap between blacks and white Americans has nearly tripled over the past 25 years. Brandeis University’s Institute of Assets and Social Policy cites that “Over a 25-year period (1984-2009)…the total wealth gap between white and African-American families nearly triples, increasing from $85,000 in 1984 to $236,500 in 2009.”
In a 2013 research paper contracted by SBA’s Office of Advocacy found that black and Hispanic entrepreneurs start their businesses with less money than whites. Inadequate capital, the report adds, limits the growth, expansion and wealth creation of minority-owned firms.
The U.S. Small Business Administration has a stake in doing all we can to eliminate these barriers to successful entrepreneurship. The Office of Entrepreneurial Development offers technical assistance and training to aspiring business owners in urban and historically underserved communities. SBA’s outreach in these areas provides vital information to help guide individuals through the obstacles that my mother encountered.
The Advocacy report offered suggestions toward eliminating the wealth disparities among minority-owned businesses. They included encouraging enrollment in science, technology, engineering and math disciplines as an option for women and minority aspiring entrepreneurs. Developing and expanding networks, the report added, can help women and minority business owners get access to resources such as financial capital.
Dave Steward is a great example of what happens when a black-owned tech company connects with a great networking machine—SBA’s 8(a) Business Development Program. When Steward founded World Wide Technology, Inc. (WWT), an information technology and supply chain solution provider in 1992, he immediately got involved in the 8(a) program. While in the program, Steward received management and technical training, and got help getting government contracts. The SBA program, he said, taught him the skills and gave him the encouragement and support to grow.
Today, WWT has more than 1,600 employees and operates in 48 states and six countries—South Korea, Singapore, China, Germany, Brazil and Mexico. Revenue exceeds $5 billion, and WWT was ranked number one on Black Enterprise magazine’s 2013 list of the “Largest Black-Owned Firms” in the United States.
Steward’s entrepreneurial inspiration, like mine, came from his parent. Growing up in Clinton, Missouri in the 1950s, Steward remembers the discrimination his father faced while trying to make a living for his family. So the senior Steward created his own jobs hauling trash, mowing lawns, working as a mechanic and running a janitorial service.
There should be a sense of urgency when it comes to encouraging the successful growth of black-owned small businesses. The SBA remains committed to offering programs that enable entrepreneurial success and prosperity that may continue for generations to come.