How can this moment create sustained momentum for equity in entrepreneurship?

By Lee Henderson

Americas EY Private Leader; Executive Sponsor, EY Entrepreneurs Access Network

Fervent supporter of young entrepreneurs and their businesses. Connector of the entrepreneurial ecosystem. Self-proclaimed sports fanatic.

3 minute read 19 Nov 2021

Black and Latino entrepreneurs often face additional obstacles and challenges gaining access to funding, opportunities and support.

In brief

  • Despite economic uncertainty caused by the COVID-19 pandemic and systemic barriers, Black and Latino entrepreneurs saw unprecedented business performance over the past 12 months.
  • While established Black and Latino entrepreneurs met or exceeded their performance expectations this past year, nearly all are concerned that it was driven by a short-term boost in attention.

Black and Latino entrepreneurs are an economic force, and EY research underscores their business resiliency and output. But more action is needed from consumers, investors and the entire business community to address disparities caused by lack of access to capital, mentors and networks and to sustainably ensure the long-term economic growth of these trailblazing business owners.

Even though everybody has been helping us to grow this business sometimes the trust is difficult to get so you need to demonstrate and you need to show more in order to really gain and move forward.
Elena Morales
Co-owner, SMT Automation

Key findings

Importance of mentors

The entrepreneur’s paradox

The current socioeconomic environment in the United States created greater awareness of the systemic barriers faced by Black and Latino entrepreneurs and increased support for their businesses.

Resources to help grow

Over half the entrepreneurs pointed to having a network of trusted vendors and partners (56%) and access to a mentor (53%) as key resources that would help them grow their business. These entrepreneurs see greater awareness of Black and Latino business owners in the community (55%) and a formal mentorship program with Black and Latino business owners (55%) as vital for supporting the next generation of Black and Latino business owners as well.

Established Black and Latino entrepreneurs unquestionably faced the brunt of the COVID-19 pandemic’s negative economic impact, but those that were more firmly entrenched not only survived but thrived. In fact, 73% of established Black and Latino entrepreneurs experienced moderate to significant revenue growth over the past year. Only 10% lost revenue. By their own accounts, last year was a success by most measures. Nearly 9 in 10 (88%) report their company’s performance this past year met or exceeded their expectations.

Buoyed by their results in the midst of the extenuating circumstances, established Black and Latino entrepreneurs are optimistic about the future. More than 3 in 4 (77%) of these entrepreneurs anticipate additional growth in 2022 compared to 2021. This growth could allow them to focus on opportunities to achieve long-term sustainability and build generational wealth.

EY Entrepreneurs Access Network

Minority-owned companies contribute greatly to the US economy (4.7 million jobs) and capital market ($700b annual revenue)...

Learn more

 

The Entrepreneurs Access Network has been invaluable. My EY mentor facilitated connections with venture capital firms and has even helped me launch a brand-new electric vehicle business. Although I’ve been a CEO for nearly 20 years, this program gave me the opportunity to work on my business, not just in it — with real results.
Maurice Brewster
Founder & Chief Executive Officer, Mosaic Global Transportation

Growth amid the pandemic

73%

of established Black and Latino entrepreneurs experienced moderate to significant revenue growth over the past year

Exceeding expectations

88%

reported that their companies’ performance met or exceeded expectations

Three in four (77%) of these entrepreneurs anticipate additional growth in 2022 compared to 2021

Summary

Opportunity afforded to any entrepreneur must be afforded to every entrepreneur. The COVID-19 pandemic underscored severe inequalities faced by Black and Latino entrepreneurs, laying bare longstanding societal and racial barriers and a lack of capital and mentors. At the same time, the ongoing racial reckoning has provided an unprecedented wave of support for Black- and Latino-owned and led businesses. 

Failing to provide these entrepreneurs with the support they need to scale reduces their capacity to employ others and to create wealth and prosperity, not only for Black and Latino business owners and other stakeholders but also for their communities. We must maintain strong support of diverse entrepreneurs to make lasting change and drive sustained momentum.

About this article

By Lee Henderson

Americas EY Private Leader; Executive Sponsor, EY Entrepreneurs Access Network

Fervent supporter of young entrepreneurs and their businesses. Connector of the entrepreneurial ecosystem. Self-proclaimed sports fanatic.