Long-Term Recovery Solutions for Minority-Owned Businesses

minority-owned business woman behind counter holding clipboard

The coronavirus pandemic has created repercussions across the global community, and business owners are still reeling. To study the impacts of the virus on Florida’s small businesses, the Florida Small Business Development Center (SBDC) Network, the Florida Chamber Foundation and the University of West Florida Haas Center recently conducted a survey of nearly 5,000 business owners. The results were telling.

A staggering 85.1 percent indicated they had lost revenue, and more than 50 percent had to temporarily close their doors. Sadly, 40 percent of business owners closed permanently. More than 45 percent of respondents said they were “concerned about operation in the future.”

THE ISSUE

Though these results are sobering, an even closer look reveals that minority-owned, women-owned and veteran-owned businesses were hit especially hard. The primary reasons, according to recent research by the National Business League and the U.S. Chamber of Commerce, is that these businesses have less access to capital and are concentrated in industries most immediately affected. Many of these jobs are in leisure, hospitality and personal service industries as well as in retail.

The minority respondents in the Florida SBDC survey (23 percent minority-owned, 38 percent women-owned and 10 percent veteran-owned) indicated they were most anxious about business continuity, cost, capital access and business revenue. These business owners were also more concerned about acquiring capital than other respondents. 

VOICES OF OWNERS

Their concerns were reflected in one-on-one follow up interviews about the immediate effects of the pandemic and the outlook for the future.

“By cutting hours and getting a PPP loan, we were able to keep our staff and not do any layoffs,” said John McCorvey of Casks and Flights Wine Tasting Room in Pensacola. “We have definitely had to pivot. We cut back on the number of days in the week that we are open and the number of hours per day. We did go ahead and add a lunch menu as a source of new revenue, and we are doing even more in-depth sanitization efforts. Even though you think about how you are going to keep going day by day, you have to also keep the long run in mind, so it’s a delicate balance of weighing all options and decisions.”

Melvin Quinones of Victory Music Instruments in Port St. Lucie explained how he is dealing with the new normal. Though it is difficult, he is exploring alternative methods of selling to remain competitive. 

“We have been concentrating on online and social media to stay relevant, and we’ve seen good success. Through our artist relationship program we have given instruments to influential artists at discounted prices so they can help us promote the brand.”

Jaya Prakash from CoachJaya4Health, LLC, in Melbourne is wary of the future because her life coaching business isn’t covered by insurance.

“People are in a hunker-down mode and are just not spending any money. It’s hard to know what to do to be most effective,” Prakash said. 

ADDRESSING THE ISSUE

Government contracts can expand a business and help stabilize it, and helping businesses understand and obtain government contracts is an essential service of the Florida Procurement Technical Assistance Center (PTAC).  Through the Florida PTAC’s government contracting services, procurement specialists help businesses obtain registrations and certifications, prepare bids, and find contracting opportunities. This is a tactic for long-term growth because all levels of local, state, and federal government buy goods and services, spending billions of dollars annually, even during times of economic uncertainty. 

One of the first steps may be to get a certification designating the business as minority-owned, women-owned, veteran-owned, or small business said Don Zavesky, Program Manager for the Florida Procurement Technical Assistance Center (PTAC) headquartered at University of West Florida in Pensacola. This is important because certain government contracts are set-aside for businesses with these specific designations. 

“It doesn’t cost anything to get certified,” Zavesky said. “But there are a lot of steps to go through and registrations to secure, and one of our PTAC Procurement Specialists can help navigate everything.” 

“Depending on the type of business, it could take several weeks or several months to complete a certification,” Zavesky said.

After a business owner obtains a certification they are eligible for, a Florida PTAC Procurement Specialist will then help them through the rest of the process of obtaining a government contract. This includes identifying bids and subcontracting opportunities, researching government procurement histories, connecting  with other businesses that have subcontracting requirements, or locating companies that are interested in teaming.

“We can help with every step,” Zavesky said. “We can assist with registrations, capabilities statements, past performance and proposals to put the business in the best position possible to succeed.” 

Confidential,  one-on-one consulting services are available at no cost to any Florida business, large or small, that possesses the interest and potential to perform work – as a prime contractor or a subcontractor – for federal, state or local government agencies. This Florida PTAC is funded in part through a cooperative agreement with the Defense Logistics Agency.  To find out more, visit https://fptac.org/

ANOTHER RESOURCE

The latest Economic Aid Act of federal stimulus funding could also go a long way in supporting troubled minority-owned businesses. The Paycheck Protection Program opened in January with a two-day window dedicated exclusively to financial institutions that lend to traditionally underserved communities. 

On February 22, the SBA announced improvements to the Paycheck Protection Program to ensure the program better reaches the smallest businesses, those in underserved communities, and businesses who struggled to access the relief during the first rounds of funding last year. Improvements will aim to ensure equitable access to relief programs by:

  • Establishing a 14-day, exclusive PPP loan application period (starting Feb. 24)
  • Increasing support for sole proprietors
  • Eliminating a restriction for small business owners with prior non-fraud felony convictions
  • Ending delinquent student loan debt as a restriction
  • Ensuring access for eligible non-citizen small businesses

PPP loans can be used to help fund payroll costs, including benefits. Funds can also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations. Interested business owners can contact a local bank, credit union, or other SBA-certified lender to apply. The deadline is March 31

For more information about the Paycheck Protection Program, other assistance available through the Economic Aid Act, and how the Florida SBDC Network can help you apply, please visit https://floridasbdc.org/disaster/cares-act/

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