How Consulting Can Help Minority-Owned Businesses Succeed
Starting a business can be a challenging endeavor, but for historically minority-owned businesses like women, people of color, and the LGBTQIA+ community, the journey to success can be even more difficult. A recent study shows that women-owned businesses receive less funding than their male counterparts. In another study, black-owned businesses were more likely to be denied loans or charged higher interest rates than white-owned businesses.
Of course, the government is fighting all of these by introducing and strengthening non-discriminatory policies. An example is the Minority Business Enterprise (MBE) & Women Business Enterprise (WBE) Program introduced in 2011. But, as experience continues to show, there are still systemic barriers that hinder minority-owned businesses, like lack of access to capital or visibility for minority-owned businesses. To effectively understand and solve these challenges, partnering with consulting firms for women and minority-owned businesses may be the best approach.
However, when looking for a consulting firm, the sheer number of choices can make it challenging to find the right one for the required needs. That’s why we wrote this article to assist women and minority-owned businesses in evaluating the type of outside assistance they require and to provide guidance on what to expect when working with a consultant or consulting firms.
5 Ways Consulting Can Help Minority-Owned Business
Imagine a minority-owned startup that provides innovative technology solutions for small businesses. It has gained some initial traction but is struggling to grow its customer base and generate sustainable revenue.
Without access to the necessary resources, expertise, and external perspective, it can struggle to develop and execute a comprehensive strategy for growth. The startup’s in-house teams, board members, and executives may be too close to the company to see the bigger picture or discover the blind spots.
As we have seen over the years, consultants can bring fresh insights, identify growth opportunities, and create actionable plans to achieve business objectives. This may involve:
- conducting market research to identify target customers and competitors
- developing a marketing strategy to reach and engage with customers
- building strategic partnerships to expand the startup’s reach
At the end of the day, it’s a collaborative approach tailored to the unique needs and circumstances of the business.
Access to networks and connections
Time and again, minority businesses face barriers in accessing the same networks and opportunities as their larger, more established majority-owned businesses. While the reasons for that may be obvious, in a 2020 study by McKinsey, Black entrepreneurs were found to have lower awareness of networks that could provide support and promotion for their businesses.
Moreover, during the pandemic, women and minority-owned businesses could not access the PPP loan promptly because they lacked relationships with banks and other relevant financial institutions. These are the underlying reasons why minority-owned businesses don’t have access to startup funding and expansion capital.
For instance, it becomes even more challenging for minority-owned startups to establish themselves in the healthcare industry because they may lack the connections and networks needed to navigate the industry’s complex relationships.
In this case, a consultant with expertise in the healthcare industry can help identify key stakeholders, such as healthcare providers, payers, regulators, patient advocacy groups, or institutional intermediaries. They can then develop a targeted outreach strategy to connect with these stakeholders.
Apart from providing individual coaching and mentoring for executives or entrepreneurs, consulting firms are renowned for organizing group workshops and training sessions to assist minority-owned businesses in establishing strong and efficient teams and encouraging leadership growth within their organizations.
In addition to providing targeted networking opportunities, consultants can help minority-owned businesses establish themselves as thought leaders in their industry. Being a thought leader could make them attractive to potential partners or investors. This could be achieved by creating content, sharing white papers, or publishing research studies that highlight their expertise and promote their unique value proposition.
Coaching and mentoring for business and leadership and development
We have seen many cases where minority-owned businesses make less money than they could because they undervalue their own services and capabilities.
Coaching and mentoring are two different but complementary practices that share the goal of helping business leaders and managers improve their capacities. For these reasons, consulting firms for minority-owned businesses often facilitate specialized coaching and mentoring programs to address the shortage of leadership and management development opportunities.
The coaches and mentors could be consultants themselves or the ones they (consultants) recommend. In any case, they work one-on-one with business leaders and managers to identify areas for improvement, set goals, and develop a plan to achieve them. Through regular meetings and feedback sessions, they provide guidance and support to help build the skills and capacities needed to succeed.
Aside from providing individual coaching and mentoring, consulting firms are well-known for offering group workshops and training sessions to help minority-owned businesses build high-performing teams and promote leadership development within their organizations.
Systems analysis and design
Adapting to new business systems and technological changes is crucial in today’s business world. That’s why most minority-owned businesses partner with a consultant or consultancy to stay competitive and efficient by leveraging the latest tools and systems.
Consultants can analyze existing systems within a company — whether it’s accounting software or marketing plans — and make recommendations for improving them. With so many marketing channels available today, it can be tricky for small businesses to know where to spend their marketing dollars. Having someone who is familiar with current tools and trends in the affected industry can help decide which marketing activities will give the best return on investment.
Business and Regulatory Compliance
Compliance functions are encountering greater demands than ever, and the stakes of failing to meet business and regulatory needs are becoming increasingly significant. The recent collapse of banks like Silicon Valley Bank is a case in point.
For minority-owned businesses, navigating the regulatory landscape can be a daunting task. The rule of thumb is to be adaptable and willing to make necessary changes to comply with regulations and best practices. During moments of change, consulting services may be needed to adjust business processes, policies, and even company culture accordingly.
Furthermore, minority business consulting for compliance could be needed when expanding operations, entering new markets, or developing new products and services. With a deep understanding of the unique challenges facing minority-owned businesses, consultants can provide valuable insights and advice on navigating these new business landscapes and achieving sustainable growth.
In the words of Candace Jones-Ekuke, “Adaptability matters because our lives, industries, and markets rapidly change.” This sentiment could not be more true for minority-owned businesses, which often face unique obstacles and challenges that require outside guidance and support. Fortunately, consulting can provide the necessary resources and tools to help these businesses succeed.
Through tailored advice and support, minority business consulting can help businesses navigate the complex regulatory environment, expand their operations, enter new markets, and develop new products and services.