Supporting Charlotte's Minority-Owned Small Businesses
A study released this week by the UNC Charlotte Urban Institute sheds light on the unique challenges minority-owned small businesses face and how the Charlotte-Mecklenburg community can better support these enterprises, which are key to community well-being and wealth-building.
Defined as businesses with fewer than 500 employees, small businesses comprise 99.9% of all businesses. Small businesses employ 47% of the private sector workforce — 61 million people — and small businesses have accounted for 65% of net new job creation since 2000.
Although small business ownership plays a large role in our economic and financial wellbeing, stark racial differences in ownership persist. Eighteen percent of small businesses with employees and 31% of small businesses with no employees are minority-owned. Businesses and financial assets (bank accounts, mutual funds, etc.) make up only 15 and 8 percent of wealth for Latinx and Black households, respectively, while these assets make up a third of overall assets for White and Asian households.
The disproportionate distribution of these assets contributes to the racial wealth gap: White households have 10 times the wealth of Black households and 7 times the wealth of Latinx households. This gap also means that people of color have less access to personal capital to start and maintain a business.
The COVID-19 pandemic has put additional strain on minority-owned small businesses and like the Great Recession, may lead to a widening of the racial wealth gap. UNC Charlotte, in partnership with Bank of America, Duke Energy, Honeywell and Charlotte Center City Partners conducted a study to better understand the landscape of minority-owned small businesses (MOSB) and the support available to them in Charlotte-Mecklenburg, particularly focused on understanding the perspectives of business owners.