How a Survey Says BIPOC Business Owners in St. Cloud Can Be Helped

A survey of nearly 50 central Minnesota entrepreneurs has given the Greater St. Cloud Development Authority and the Initiative Foundation new insight into how to better serve local minority-owned businesses.

Some recommendations based on the results of a needs assessment survey include: more relationship building work with the area’s Hispanic community; providing mentorship opportunities for entrepreneurs of color; improving access to culturally appropriate loans; and developing educational seminars on topics such as finance, taxes, and accounting.

The needs assessment was conducted by the Center for Economic Inclusion and funded by the Initiative Foundation. CEI also conducted focus groups to gather information on challenges specific to entrepreneurs in Stearns, Benton, Sherburne and Todd counties. The survey was designed specifically for business owners who identify as Black, Indigenous, Latino, Asian, or People of Color.

Because the sample size was relatively small, it’s not necessarily representative of the broader experiences of entrepreneurs of color in the area, but is still helpful in better understanding their needs in the St. Cloud area, according to Donniel. Robinson, head of entrepreneurship programs at the Initiative. Foundation

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“This survey was vitally important for us to help us understand where we are going from where we have been in the journey to try to make this community a more welcoming and inclusive community,” said the president of the Greater St. Cloud Development Corporation, Patti Gartland. .

Gartland said the size of the gap in connecting with Hispanic business owners was “revealing.” Hispanic representation was low in the needs assessment and focus groups, despite a 20% growth in the region’s Hispanic community between 2013 and 2019, according to the CEI report.

“The depth of that void became much more apparent to me,” she said.

Robinson said the report reaffirms the outreach work the Initiative Foundation has already begun with the Latino population of central Minnesota, particularly in Melrose and Long Prairie.

It also reaffirms the Initiative Foundation’s work with the Enterprise Academy and the one-on-one technical assistance it provides to entrepreneurs, said Brian Voerding, the Initiative Foundation’s Vice President for Inclusive Entrepreneurship.

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But while the Initiative Foundation has been an important source of capital for entrepreneurs in central Minnesota, Voerding said the team wants to continue improving access to funding.

“We know it’s a challenge,” he said.

Ninety percent of survey respondents said they found it at least somewhat difficult to identify sources of funding to start their business and 89% said it was at least somewhat difficult to apply for loans and grants.

Minority businesses are an important part of the St. Cloud community

Of those who participated in the survey, 65% were immigrants and half (51%) were Somalis. More than 3/4 of companies (77%) are less than 5 years old.

Ismail Mohamed, Enterprise Academy program manager for the Initiative Foundation, said the statistic may reflect the general timeline of members of the East African community settling in central Minnesota.

“The East African community is very entrepreneurial…but it takes time to understand the whole environment,” he said.

Somali respondents reported distinct experiences from other black and brown entrepreneurs in needs assessments, according to the IEC in its report. Almost all (92%) of participating Somali respondents were first-generation Americans, and almost all (90%) founded their business within the past five years. Of the Somali entrepreneurs surveyed, 69% are under the age of 40, compared to 33% of non-Somali entrepreneurs surveyed.

More than double the number of Somali entrepreneurs said they found profitability “very difficult” compared to non-Somali entrepreneurs, and they also reported more difficulties with the bureaucratic work required to find a business and obtain financing. Somali entrepreneurs were also less likely to receive COVID-19 relief funds (only 16% of Somali entrepreneurs surveyed did so, while 64% of non-Somali entrepreneurs surveyed received COVID-19 relief funds).

“Across all measures, Somali entrepreneurs in the Greater Saint-Cloud region report greater difficulties with business-related activities than non-Somali entrepreneurs,” the CEI said in its report.

The IEC said it suspected some of these struggles were indicative of the “additional burdens” that Somali residents may face, especially for those whose first language is not English.

“The fact that more than a few Somali residents have found ways to start and grow businesses, given these burdens, reflects the ingenuity and persistence of today’s Somali entrepreneurs,” the IEC said in the report.

GSDC Director of Business Development Leslie Dingmann said it’s important to recognize that St. Cloud is an evolving community and that its minority businesses are a key part of that community.

“We are strong in our industry sectors – healthcare, education etc – but there is another sector that has different needs and to make sure their needs are catered for and not assume it’s what they need,” Dingmann said.

Value of Minority Business Entity Certification

One of the 10 recommendations set out in the IEC report included communicating the value of minority business entity certification and supplier diversity opportunities. There is national certification through the National Minority Supplier Development Council and only 2% of respondents had obtained this certification.

In Minnesota, the equivalent is the Disadvantaged Business Enterprise certification, which is an option for businesses that are at least 51% owned by a woman, ethnic minority, or other socially and/or economically disadvantaged person. The results of the survey showed that none of the interviewees had obtained this certification. About 47% have not attempted these types of certifications at all.

Dingmann said she was also unaware of the importance of these certifications. Gartland said the awareness and understanding of this resource directly aligns with the type of work GSDC wants to do in the community.

The Fondation Initiative has already set up a training session to inform community members about their eligibility for certification and their desire to seek it for their business. Mohamed has this certification and will lead the workshop on September 1st. Robinson said this workshop is a direct result of survey responses.

The Initiative Foundation is also creating a series of workshops called Business Basics for Entrepreneurs to learn essential business skills in which business owners surveyed expressed a need for more support.

Other Survey Findings

About a third of respondents owned retail businesses. These owners were more likely to be women, immigrants and refugees, younger, and less likely to have more than a high school diploma compared to other entrepreneurs surveyed. These owners also reported significantly lower profits; 87% made less than $5,000 in profit, compared to 26% of entrepreneurs in other industries. They were also more likely to have lower family income.

Needs assessment respondents also said it was somewhat or very difficult to get funding (87%), pay business fees (85%) and find mentors (77%).

Gartland said the report, provided by the IEC based on survey results and focus group conversations, is incredibly timely as the organization is in the midst of setting its priorities for strategic action. for 2023-2025. The report helps the GSDC identify gaps in service to these contractors and those that fall within the scope of the GSDC’s work.

Sarah Kocher is the economics reporter for the St. Cloud Times. Contact her at 320-255-8799 or [email protected] Follow her on Instagram @sarah_sctimes.

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