Before I answer the question posed in this article’s headline, first I want to address the problems that minority-owned businesses face in general. Why? Because business owners need to be able to overcome the most common problems that occur no matter who is in the White House.
Thus, I asked Chat GPT the top five challenges that small businesses face, then the top 5 issues that minority businesses face, and I compared the output to my personal observations as a minority business owner, and through my interactions leading the Carolinas-Virginia Minority Supplier Development Council (CVMSDC; with reach to over 17,000 members nationwide through our Affiliate Councils.
The Facts: The challenges are similar – but the weight of systematic bias and discrimination cannot be adequately measured. A study that we conducted with Supplier.IO, indicates that there is a 330-year wealth gap in America between majority and minority populations. To level the playing field, minority-owned businesses need ACCESS to opportunities and ACCESS to funding that is hard to obtain for the best of companies. Advocacy groups like WEBNC, CVMSDC, and others are here to help increase business success rates by addressing the issues that are commonly faced by disadvantaged groups.
Here are the top five challenges that small businesses commonly face:
| Top 5 Challenges | Top 5 Challenges | Top 5 Challenges |
| Small Businesses – ChatGPT | Minority Businesses – ChatGPT | Milton Observation – CVMSDC |
| Cash Flow | Access to Capital & Funding | Access to Capital & Funding / & Cash Flow |
| Access to Capital & Funding | Limited Networking Opportunities & Mentorship | Contract Opportunities – Access |
| Hiring & Maintaining Talent | Systemic Bias & Discrimination | Readiness; Appearances & Technology |
| Market Competition | Market Accessibility & Visibility | Ability to Scale – People & Production |
| Regulatory Compliance + | Regulatory * Licensing Barriers | Working In vs. Working On; Managing vs. Growing and Future Scaping |
Cash Flow Management
Cash flow is different than access to capital. Without a healthy cash flow, you can never get out of payday-to-payday cycles. In addition, you are so worried about making ends meet that you never stop working IN the business. You become consumed on a profitability wheel of angst. Inconsistent cash inflows, delayed payments from clients, and unforeseen expenses can lead to financial strain, making it difficult to cover bills, payroll, and day-to-day operations.
Solution: Make sure that you have systems in place to collect money when it is due, stay on top of receivables, and ask for shorter payment terms from your clients. For instance, 15-day terms instead of 30-day terms will make a huge difference. Asking for payment up front for 50% – 100% of your work is another option. For recurring monthly contracts, ask for three-month advance payments. Each example improves your cash flow and reduces your stress level.
Access to Capital
Securing adequate funding is often challenging, especially for newer businesses without a track record or established credit. Limited access to loans, grants, and other funding sources can hinder growth, limit expansion opportunities, and prevent small businesses from scaling effectively.
Solution: Before you spend all your money and your family’s money – have a capital plan. Seeking funding before you need it is key. As a matter of practice, establish lines of credit and save them. Work on your credit scores to secure the cheapest capital. Keep your paperwork in order with fast access. And finally, develop professional relationships with your bankers. Yes, have multiple banks, and have their phone numbers in your phone just like you have the number for your barber or hair stylist.
Ability to Scale (Hiring and Retaining Talent – Securing Production Capacity)
The ability to scale is a problem that will keep your business local and small. Now, that is OK if that is your desire. However, if you want to serve more clients and grow exponentially, you have to understand hiring and production.
Recruiting skilled employees can be difficult, especially for small businesses that may not have the resources to offer competitive salaries or extensive benefits. Retention also can be challenging, as employees may leave for larger companies with more opportunities for advancement and better compensation packages.
Scaling also involves production capacity. If you can only make 1,000 pieces per week, but you have a contract for 4,000 pieces per week, how will you meet the demand? You must have potential production partners, co-packers, access to production lines in other facilities, or an ability to expand your current facility to meet consumer increases and decreases. When orders decrease will you have to lay off people? Do you know how to hire more people when orders increase?
Solution: Hire a contract Human Resources person to manage your employee benefits, training, and recruiting. HR is very complicated, thus having a specialist will make a positive difference. Create partnerships with people who you can share work with, understand your limitations, and create ways to expand your limitations. In short, plan before you need to expand. Last, utilize Artificial Intelligence to help you work smarter vs harder.
Readiness, Appearance & Technology
Competing against larger, more established businesses with greater resources is an ongoing challenge. Small businesses often struggle to differentiate themselves, establish brand loyalty, build an image, and maintain a competitive edge, particularly in industries with many similar products or services. How you show up, in part, plays into your competitive posture.
Solution: Show up larger than you are – use technology to help build your image. Utilize AI to respond to client inquiries. Make your website work for you; tell your story, share customer testimonials, provide SOLUTIONS to customer problems. Asking where the trouble spots are and then providing solutions is much more effective than telling what you do. Utilize the support of advocacy groups to expand your reach, help with development, and make connections. Be ready to bring your A-game at all times.
Regulatory Compliance
Navigating and adhering to regulations, including taxes, labor laws, health and safety standards, and environmental requirements, can be overwhelming. Compliance is especially challenging for small businesses with limited resources and knowledge of regulatory changes, and non-compliance can lead to costly fines or legal issues.
These challenges highlight the need for strategic planning, strong financial management, and effective resource allocation to help small businesses overcome obstacles and grow sustainably.
Solution: Hire consultants to help you with compliance; HR experts for policies, CPAs/Accountants/Tax Experts for proper filings, insurance experts for effective coverage. Know what you need and hire the right people to help you prevent disasters.
Now – How will the 2024 election impact minority-owned businesses?
The 2024 presidential election has significant implications for minority-owned businesses in 2025. With new leadership in Washington, D.C., several policy areas are expected to influence these enterprises:
Economic Policies and Taxation
The new administration is anticipated to implement tax cuts and deregulation aimed at stimulating economic growth. While these measures may benefit businesses broadly, minority-owned enterprises could face challenges due to potential reductions in government programs designed to buoy them. Additionally, proposed tariffs on imports – particularly from China – might increase costs for businesses reliant on foreign suppliers, affecting sectors like retail and manufacturing.
Access to Capital
Minority-owned businesses often depend on federal programs for funding and development support. Changes in the regulatory environment under the new administration could impact the availability of such resources. It’s crucial for these businesses to stay informed about policy shifts to adapt their strategies accordingly.
Regulatory Environment
The Trump administration’s focus on deregulation may reduce compliance burdens for businesses. However, the rollback of certain regulations could also eliminate protections that benefit minority-owned enterprises, potentially affecting their competitive standing.
Market Dynamics
Shifts in trade policies and tariffs could alter market conditions, influencing supply chains and consumer demand. Minority-owned businesses should monitor these developments to mitigate risks and capitalize on new opportunities. Managing your supply chain with an expansive mindset as a business owner is important. That management shows up as multiple co-packers, understanding how to scale up and down when needed, and utilizing supplies from different sources. The more control you have over your supply chain as a business owner, the stronger you are as a supplier to larger clients.
The Solution: Community Support and Advocacy
In light of potential policy changes, community support and advocacy will be vital. Engaging with local Chambers of Commerce and minority business associations like www.CVMSDC.org can provide resources and a collective voice to influence policies favorably. Double-down on your work! While the new administration’s policies may present both challenges and opportunities, proactive engagement and strategic planning will be essential for minority-owned businesses to navigate the evolving landscape in 2025. Addressing the common issues that exist in every political environment will strengthen your posture for growth in the upcoming political landscape.
We invite you to double-down and learn more with Dominique Milton at www.CVMSDC.org
