Entrepreneurs come in all shapes, sizes, and colors. There is no longer a believable stereotype in most cases, though some traditional lenders such as big banks may see it differently at times. The following tips can be especially helpful for minority-owned businesses seeking financing.
Choose Lenders Wisely
There are many small business loans geared specifically toward minorities. Those are great and should definitely be taken advantage of. Big banks tend to be less flexible than smaller, regional banks and credit unions that tend to know the local market better and are often less stringent in their lending parameters. Additionally, microlenders, such as ACCION USA, operate with the purpose of providing capital to women-owned businesses and minority-owned businesses. Community Development Financial Institutions (CDFIs) are organizations that operate to help development of business in under-served areas, including economic empowerment zones. Biz2Credit works with many of these institutions to arrange business loans and lines of credit for women and members of minority groups.
Make Sure the Cash Flows
Regardless of how well something works on paper, if there is no cash, there is no success. This is a problem many small businesses run into, and it can be fatal to a business’s financial success. The best way to avoid this is to either make sure you understand the financial aspect of the business yourself, or partner with someone who does. Being able to look at financial information and understand what it is telling you is priceless, and knowing what to do about it is just as important.
Cater to the Right Crowd
Rarely is there a business that offers a product or service that everyone needs. Bald men do not need haircuts, and those who use mass transportation have no use for a mechanic. Realize the customer base you are serving and focus on serving them excessively well rather than trying to attract those who may very well never need whatever you are selling.
Pay Attention to the Details
How clean the building is, how the phone is answered, and even location are all things that are sometimes overlooked when running a small business. They are small things that can have a big impact on financial success. Answering the phone without a sincere, kind tone could turn away a potentially very profitable new customer. Not advertising how to get to your location — especially if it is off the beaten path — can be fatal. Dust on the furniture could turn off customers, who walk out without saying a word. Sometimes you have to sweat the small stuff.
Never Let Customer Service Slide
If customers do not get what they come for or get it without a smile, they will stop coming and tell others to do the same. The business will fold. With very rare exception, the customer really is always right.
When you educate yourself, use common sense, and surround yourself with trusted people who know more about it than you do, you can run a financially successful minority small business and reap the benefits for years to come.
This article was submitted by Faith Stewart, he has a BBA with a major in accounting and spent 10 years working in the various aspects of accounting and finance before pursuing her passion for writing.