Help for Small Businesses

Small business ownership is an American dream that should be shared by all, and large entities often have an interest in increasing their interaction with their vendors that are owned by women and minorities to level the playing field. A 2022 U.S. Census Bureau Annual Business Survey reported that of 5.9 million firms total, 21% were minority-owned, 5.2% were veteran-owned and 22% were owned by women.

As I was researching this year’s Small Business Guide, one recurring topic was that governments and corporations charged with diversifying the supply chain have difficulty getting bids from qualified firms. In 2022 Gov. Brian Kemp created the position of Georgia Small Business and Supplier Diversity Manager, charged with increasing outreach and purchasing opportunities to Georgia-based small businesses with a focus on minority-owned, woman-owned and veteran-owned businesses. Julian Bailey, who had been with the Georgia Department of Administrative Services for nearly a decade, was promoted to the role. Effective Jan. 1, House Bill 128 expanded the number of businesses eligible for Minority Business Enterprise Certification to include woman-owned and veteran-owned businesses (in addition to minority-owned).

Photo credit: StartupStockPhotos

While companies tend to be more public about their supplier diversity efforts, there can be a disconnect between the small business community and the public entities trying to help them grow. This is partly due to the paperwork involved in government contracts, the insurance bond required to take on public projects and the financing required. Kemp says House Bill 128 cut much of that red tape to ensure small businesses are well-equipped to compete for state contracts.

Now is the time for small businesses seeking to grow to engage with the resources available. Leaders in this area are working to help small business owners find one another, sometimes creating cohorts to take on bigger contracts than they could handle on their own. In Atlanta, Leapley Construction founder Meredith Leapley hosts a bi-monthly workshop for small minority- and woman-owned businesses, with support from faculty at Morehouse College and Georgia State University. And in Chatham County, Step Up Savannah has a program called GOGAL, which provides a startup grant to women of color who have completed training with the ACE (Access to Capital for Entrepreneurs) Women’s Business Center and graduated from the Chatham Apprentice Program.

One reason some small businesses fail is the lag between delivery and payment that can occur with contracts. This is why owners should seek out available resources – they may find certain options that are quite specific to their sector, circumstance, demographic or geography. Georgia’s oldest Community Development Financial Institution, ACE, recently expanded to the Georgia Chamber of Commerce campus in Tifton to help small minority-owned businesses in Southwest Georgia.

Now is the time for small businesses seeking to grow to fully engage with the resources available.

ACE President Grace Fricks says another obstacle to procurement is that companies need enough cash to fulfill a contract. Accessing online lenders who can provide a 24-hour turnaround often results in small businesses stuck with high-interest loans, and entities like ACE work to help owners consolidate such loans to a reasonable rate.

It’s worth noting that over 80% of small businesses are sole proprietorships – meaning they have no employees – and around 65% fail in the first 10 years. Not every small business owner is in it to grow or franchise – some merely see a local need and seek to fill it and make a living. Which is fine. But it’s also worth noting that 99% of all U.S. companies are small businesses.

There is a reason beyond the bottom line that governments and corporations are invested in growing small business and entrepreneurship, and why these efforts tend to favor woman-, minority- and veteran-owned businesses. These are demographic groups that skew low income, and owning a business is a way out of generational poverty.

Small business owners often prefer the “go-it-alone” approach, as opposed to the “serial entrepreneur” approach of starting, growing and selling multiple businesses. Some may think there is less work involved in going it alone, but as Fricks notes, this is a bit of a myth. In any event, many companies may not be aware of opportunities in their own backyard, or they aren’t on the state and local governments’ procurement registry.

In addition to the resources discussed in this issue, the Georgia Department of Administrative Services now offers workshops on procurement readiness and certification training. These paths can help every small business owner in Georgia seeking to stabilize their business or take it to the next level.