Why the Time Is Now for Minority Businesses
There’s no time like the present, you often hear people say. You casually assume they’re plotting an escape to Europe, maybe a skydiving free fall. But if they’re talking innovation, if they’re talking dollars and cents, chances are they’re talking minority-owned businesses.
Minorities are minorities no more in the business arena, and political leaders are taking note. Today, minorities own and operate a majority of small companies, which translate to big economic growth. As those in public office know well, these companies are the bedrock of the American middle class. En masse, they create more jobs than any other sector.
Small businesses mean continued economic viability in a global marketplace. Why? Their diversity mirrors the new American demographic, where difference is now the norm as well as our biggest asset on the international stage. People with disabilities, Hispanic and African- and Asian-Americans, women, the LGBT community, and military veterans no longer survive on society’s fringe. They thrive at its heart, pulsing with fresh ideas that resonate the world over.
A 21st century economy demands innovation. Minority business enterprises (MBEs) embody the diversity that yields true creativity, making American ingenuity more than a corny catchphrase. New ideas arise naturally when people with different perspectives sit around the same table. In minority-owned businesses, a diverse body of employees birth new solutions to age-old problems each and every day. Never, as times attest, have we needed them more.
Diversity isn’t a buzzword. It’s a bottom line that commands private equity firms’ attention. These companies are rapidly expanding their pool of capital for minority-owned businesses, who promise a substantial return on any investment. Private equity firms know that MBEs are more than a trend—they’re a lasting paradigm shift.
Many sizable companies have had supplier diversity programs in place for years. But as MBEs continue to grow, so do the scope of these programs, which are fast evolving into full-scale partnerships. Sourcing 20 percent of supplies from a minority-owned business to meet a company quota is no longer enough. Pilot projects spearheaded by minority leaders are helping large companies deepen collaboration with diverse suppliers at a core strategic level.
Insider industry groups, meanwhile, recognize that MBE growth is more than a numbers game. Launching new minority-owned businesses now matters less than capacity building. Industry groups like the National Minority Supplier Development Council are focused on maximizing potential, facilitating acquisitions and joint ventures while helping identify gaps in efficiency and performance.