— Dr. Fred McKinney
- Carlton Highsmith Chair for Innovation and Entrepreneurship and Director, People’s United Center for Innovation and Entrepreneurship at Quinnipiac University
The opinions expressed in this article is solely those of the author.
You can cry in your milk, or you can dig deep down inside of the powerful person who had the guts to start their own business and leave the comforts of a corporate existence that during these times has proven to be no more secure than the life of an entrepreneur. We are familiar with the grim statistics showing that this COVID-19 depression is disproportionately impacting black and brown businesses in pretty much all sectors of the economy.
The Paycheck Protection Program that was designed to help small businesses had a loan rejection rate of over 90 percent for black businesses, until active measures were taken in order to correct this unacceptable discrepancy.
More than 41 percent of black owned businesses were shuttered in the early days of the crisis compared to 11 percent of non-Hispanic white owned businesses. Even those minority businesses that were able to secure PPP loans are now facing the daunting task of those loans coming due at a time when demand for their services has not returned. On top of this, it appears that COVID-19 is spiking again this time across the country.
As the owner of BJM Solutions, LLC, an economic consulting firm and a business professor, I know first-hand the struggles minority entrepreneurs are facing. During normal times, cash is king. During these times cash is everything. And if the cash is not coming from the customers who traditionally provided the top-line revenue critical to survival, like a COVID-19 patient struggling to breathe, without it survival is not possible. But unlike the COVID-19 patient, the entrepreneur can and must heal thyself.
Now is the time for entrepreneurs to distinguish themselves from small business bureaucrats. Do not get me wrong, there is nothing inherently wrong with bureaucrats. Somebody must pay the bills, buy the materials, manage the website, invoice the customers, deliver the products, and manage the staff. Often this person is the owner and the founder of the business.
These tasks will never go away and must be done well. But now is the time for the entrepreneur to shed the raiment of bureaucrats and be reborn as the entrepreneur. If you created a successful company in the past you can create a successful company now, but it might not be the one you are currently running.
The entrepreneur within you can be successful even in these most difficult of times. I would like to suggest some steps to take today to get you back on the path of profitability and success.
It is often in the most difficult economic times that structural weaknesses and gaps in the system are revealed. These weaknesses during normal conditions are annoyances at best, easily overlooked and not impinging or impacting achieving objectives.
A case in point is that of hospital supply chains. It is because of constantly improving supply chain efficiencies that hospitals did not need to store masks, gloves, and other PPE. If internal hospital inventories were low, the hospital could just order more and “wa-la”, the shelves would be fully stocked the next day.
In a pandemic, those internal inventories ran out everywhere and hospitals were left waiting and desperately seeking alternative suppliers. The reaction to this condition has led several large regional hospital organizations to buy or rent warehouse space in order to meet their short and long-term needs by accumulating supplies. Often these warehouses are proximate to the hospitals. Problem – Solution.
The current economic stress is full of problems that are looking for solutions. Entrepreneurs look at these problems as opportunities. I recommend that minority entrepreneurs begin a careful study of problems that have been revealed in their industries. And trust me, they are everywhere.
A good place to start is to identify and try to understand the challenges you are facing. Chances are, you are not the only one in your industry facing these problems. This search for problems goes far beyond saying my cashflow sucks.
This is a root cause analysis that requires that you ask “why” multiple times. For example: Why is your cashflow down? Why did your customers stop buying from you? Why are your customers experiencing pain? Why are your customers’ customers experiencing pain? Going down this rabbit hole may reveal opportunities to create new products, new services, new places for you to enter an existing supply chain, or better yet, create a new supply chain that puts you and your company in a better long-term position to generate greater profitability. These are the questions entrepreneurs ask.
You do not need to shut down your business and start selling windmills, although if you could, it would not be a bad move. The key for minority entrepreneurs now is to be entrepreneurs. Be bold, be innovative, be inquisitive, and be positive. You can do this.