It's not surprising that many small businesses are struggling to maintain operations, earn profits and sustain their work forces in the wake of the economic downturn caused by the COVID-19 pandemic.
However, many minorities who own small businesses across the U.S. remain more optimistic about the future than their non-diverse counterparts, though they acknowledge a need for greater support from the government from their communities and from the private sector.
Those were some of the findings of the nationwide Small Business Mindshift 2020 survey recently completed by Union Bank, a financial institution that's been serving small businesses on the West Coast for more than 155 years.
The survey determined that in the U.S., 34% of minority small-business owners (SBOs) can "see a path forward" for future business success and survival despite COVID-19. In comparison, only 20% of non-diverse SBOs are predicting such outcomes. Minority SBOs have also been comparatively more proactive than their peers in forming new strategies to cope with pandemic-imposed changes. In fact, 24% believe COVID-19 has had a positive effect on their businesses, compared to just 12% of non-diverse SBOs. Minority SBOs include those owned by Black, Latinx and Asian respondents.
"These survey findings reinforce what we already know - minority small businesses have always worked hard despite difficult circumstances or external environments - and as a result, have consistently been more resilient and adaptable," said Frank Robinson, Diverse Markets and Community-Based Programs Executive for Union Bank. "Minority small businesses are at the heart and soul of their local communities, and as such, we are committed to helping them recover and thrive by providing them added support through critical economic stability and the tools necessary to succeed moving forward."
In other findings from the bank's latest survey:
U.S. minority SBOs are better at adapting their business strategies
In general, U.S. minority SBOs have shown significantly more innovation than others when it comes to adjusting business practices to stay afloat; 52% have altered products or services, 50% have changed online retail options and 47% have switched their online advertising messaging.
California-based SBOs are struggling, but minority owners are more optimistic
SBOs in California are feeling more deflated and uncertain compared to other small business owners across the U.S. Only 13% of California small business owners say they see a path forward for how their business can survive versus 23% U.S. SBOs overall. Additionally, 41% said that applying for the financial aid that could help their businesses is too complex to even attempt.
Again, however, minority SBOs in California have demonstrated more innovation and optimism during this time and have been more likely than their peers to implement new strategies. Not only are minority SBOs in California more likely to have embraced their community leadership roles - with 55% feeling an increased sense of responsibility to help their community vs. 44% of non-diverse SBOs - but they're also getting more support in return, with 39% feeling supported by their local community vs. 33% of non-diverse SBOs.
COVID-19 vaccine key to success
A third of U.S. small-business owners said their future success and survival will be determined by the Presidential election, and two in three see the 2020 election as the most important in their time as business owners. However, the overwhelming majority said that the availability (or lack thereof) of a COVID-19 vaccine will be the No. 1 issue affecting their success over the next six months.
As a way of supporting minority businesses and helping to address social and racial injustices in the U.S., Union Bank took the initiative in June to launch a $10 million Community Recovery Program aimed at providing SBOs access to capital, entrepreneurship, job retention and retraining.
"This pandemic has hit all small businesses, and particularly minority owned small businesses, extremely hard," said Todd Hollander, Head of Business Banking and Small Business for Union Bank. "But every day, we see our clients finding creative ways to keep their doors open and their employees paid. We are here to support them in those efforts both as a bank and as members of our local communities."
More information about Union Bank's Community Recovery Program is available at UnionBank.com/about-us/newsroom/community-recovery-program.