By: Tyler Demars.
While entrepreneurs can come from any demographic, life experience, or situational background, there are trends and common challenges related to identified population groups or communities that limit access to small business ownership. Folks from these communities are both underrepresented in entrepreneurship ranks in our state and underserved by the benefits of entrepreneurship which include wealth creation, job creation, community development, and increased community sovereignty. Wealth creation is the primary benefit of entrepreneurship for a community, other benefits flow primarily from this wealth creation. According to a report from our US Department of Commerce’s Minority Business Development Agency, business owners “represent roughly 10 percent of the workforce, but hold nearly 40 percent of the total U.S. wealth.” When we talk about underserved communities, we are talking about communities underserved by the benefits of entrepreneurship.
In North Dakota, Native Americans are our most significantly underserved community. New Americans, female entrepreneurs, and rural entrepreneurs face similar challenges related to being underserved. Find out what are some of the challenges faced by underserved communities. Click To Tweet
Common barriers to underserved entrepreneurs include:
Access to Capital
Businesses need capital to fuel growth. Poverty, lack of education, and low job experience in underserved communities affect an entrepreneur’s ability to use savings or other assets to self-finance, access private capital, and/or qualify for commercial or publicly backed loans (such as SBA loans). Additionally, folks from underserved communities experience limited access to family or network-based investment.
Access to Professional Networking and Mentorship
According to research from the Kauffman Foundation, people who know entrepreneurs are more likely to become entrepreneurs. The value of professional networking and mentorship is evident by the impact and momentum behind entrepreneurial ecosystem development happening in communities across the US. Entrepreneurial ecosystems are location-based networks of support systems for new and growing companies. Ecosystems are made up of entrepreneurs, resource support partners such as the ND SBDC and Chambers of Commerce, a talented workforce, and a healthy, inclusive culture that encourages access to the ecosystem. Underserved communities face unique challenges in connecting with their local ecosystems.
Systemic Discrimination & Oppression
Specific to Native Americans and New Americans, centuries of experienced discrimination and oppression have created doubts in the minds of Native American or New American entrepreneurs that they can succeed as business owners. We have made progress in facing our history and acknowledging the current state of cultural treatment of Native Americans, but still have work to do here.
It is the mission of Specialty Services at the ND SBDC to support underserved communities in improving access to entrepreneurship, leveraging their opportunities, and overcoming the unique challenges they face. Our Native American and New American clients bring innovative ideas, display a strong work ethic, and show up with a community-minded approach to business development. We are grateful and honored to be a partner in helping our neighbors from underserved communities in navigating the entrepreneurial journey. We believe all communities should be served by the benefits of entrepreneurship.
About the Author: Tyler Demars, Specialty Services Director, North Dakota SBDC Network