2020 was a challenging year for all. While small businesses nationwide faced unique obstacles brought on by COVID-19, Black small business owners, in particular, have been disproportionately impacted by the pandemic, with one study showing that half may not survive. Despite these challenges, our new research from Bank of America based on a survey of 300 Black business owners across the country found they remained resilient and flexible as they navigated through an evolving and uncertain business landscape. In response to the impacts from the pandemic, 48 percent of Black entrepreneurs retooled their operations – double that of the national average. Many Black business owners also found creative ways to reinvent themselves by developing new products or services, and even more donated resources to support relief efforts in their local communities.
While it may be challenging to predict what exactly our path to economic recovery will look like, Black small businesses will play a significant role. To support this vision, Black entrepreneurs can take three steps to reignite growth and plan for financial success this year.
Reevaluate your business plan given today’s environment. Due to changing landscapes and environments, it’s critical to evolve and adjust your business plan by mapping out key areas of need and growth and identifying any potential risk areas that you may have uncovered during the pandemic. Ask yourself, how did your business track last year against the projections you made heading into 2020? Are there successes from the second half of 2020 you can build on? What solutions worked best for your business as you managed the impact of COVID-19? As we’re still in a time of uncertainty, err on the side of caution and ensure your plan allows room for evolution and adjustment as needed.
Explore your financing options. Our team at Bank of America is taking steps to directly engage with minority business owners to ensure they have access to the tools and resources they need to secure funding. Our small business bankers will continue to support business owners as they navigate the Paycheck Protection Program process – as well as to discuss traditional loan product options to fit individual needs such as purchasing inventory, refinancing debt or financing account receivables.
When exploring financing options, a few questions to consider include: What goals have you identified in your business plan that require additional financing? Are you looking to boost your headcount? Did you have expansion plans that you held off on? Are any structural or technological enhancements needed in the coming year? Once you identify your goals for 2021 and beyond, sit down with your small business banker to determine the right financing solution for you.
Bankers can also help connect business owners who may not qualify for traditional bank financing to our network of CDFI partners across the country, that are working to increase access to capital for business owners who have historically faced barriers.
Bank of America is the largest investor in CDFIs in the U.S., with more than $1.6 billion in loans and investments to over 250 CDFIs. We also recently committed $200 million to direct equity investments in Black- and Hispanic-Latino-owned businesses, to help supply growth capital as well as to invest substantially in programs to create future entrepreneurs.
Go digital. Businesses across the country have had to adjust aspects of their operations due to the public health crisis, including enhancing sanitation practices, changing primary revenue streams and shifting sales from brick-and-mortar to online. As we continue to adhere to social distancing requirements, consider banking digitally to limit in-person interactions, and free up time to remain focused on running your business.
Connect with your banker on what digital options are available to you. For example, at Bank of America we offer a full suite of small business digital capabilities, including Cash Flow Monitor, a no-cost dashboard that provides an easy way to manage, track and project your business cash flow.
The pandemic created unprecedented obstacles for Black small business owners, challenging them to find new and innovative ways to meet the needs of their businesses, employees, customers and communities. Following the steps outlined above can help address whatever opportunities and challenges 2021 may bring.
The news that is especially encouraging for the small business community In Greater Washington? Our research found four in five Black entrepreneurs say that once we’re on the other side of the pandemic, they believe small businesses will return to being the backbone of the US economy.