🔒Helping Hands: Minority-owned business support network is growing, but entrepreneurs say more is needed

Local entrepreneur Alisa Bowens-Mercado has successfully launched not one, but two businesses.

First came Alisa’s House of Salsa, a dance studio in downtown New Haven, which is now 22 years old and has taught Salsa moves to thousands.

Four years ago she launched Rhythm Brewing Co., a New Haven-based brewery, giving it a name that reflects her love of dancing. It is the first Black and female-owned beer company in the state.

As Bowens-Mercado tried to navigate launching and building her businesses, she encountered challenges along the way. While some are common for all budding entrepreneurs, Bowens-Mercado notes that creating a successful business can be even harder for minority operators.

“We have had problems with startup costs, capital and funding,” Bowens-Mercado said. “The beer culture embraced me, but some people were uncomfortable with me being a person of color. In my case, brewing has been a male-dominated industry, so there also has been breaking barriers.”

But Bowens-Mercado and other minority entrepreneurs don’t have to go it alone. There has been a growing network of organizations and programs coming online throughout New Haven County and the state aimed at helping minority-owned companies overcome challenges as they launch and try to grow.

Minority business leaders say the support is helpful and much needed, but more still needs to be done to boost their overall numbers and success rates.

Bowens-Mercado credits organizations like the Black Business Alliance, Greater New Haven Chamber of Commerce and Greater New England Minority Supplier Development Council with helping her, including by connecting her to others.

“It is like a community where we can talk to each other,” Bowens-Mercado said. “These organizations want to see you win. It takes a village to raise a business.”

Capital access

Minority-owned businesses represent a small subset of the overall ecosystem. According to the U.S. Census Bureau, approximately 18% of U.S. businesses are minority-owned.

Anne-Marie Knight, executive director of the nonprofit Black Business Alliance (BBA), knows all about the difficulties minority entrepreneurs face. The organization, which recently opened a new state headquarters inside the Connecticut Post Mall, provides entrepreneurs with training and networking.

A big challenge for minority entrepreneurs is lack of access to capital, she said.

“Sometimes they are starting with less than $3,000, and they don’t have a network of family and friends to help with financing,” Knight said.

They also typically don’t have the same level of access to traditional funding like bank loans. This can be due to issues such as bad credit or owing back taxes, Knight said.

“Some people have perfect credit but still have trouble getting money,” Knight said. “Black business owners have had negative experiences with banks, including having loans denied.”

According to Fundera Inc., approximately 66% of minority business owners obtain money they request from a bank, compared to 80% for non-minorities.

To counteract this problem, the BBA talks to bank officials about their rules and regulations to help entrepreneurs and act as an intermediary, Knight said.

Minority entrepreneurs also have had banks require more information than they would ask for from a white person, according to Knight.

“It’s institutional racism,” Knight said. “We have a dialogue and do training, so people look at what they have been doing in the past and what they can do differently.”

The BBA has launched a “funding superhighway” program that involves banks, economic development groups and other organizations, with a goal of getting needed capital in entrepreneurs’ hands. The BBA has a partnership with the CT Minority Business Initiative to provide access to capital up to $100,000.

On the non-financial side, the BBA helps entrepreneurs put together business plans and provides help with training, marketing and online branding.

Finding mentors

Juan M. Salas-Romer, founder and executive director with the KNOWN Coworking & Growth Lab in New Haven, said his organization works to help address key barriers to business growth. Its KNOWNpreneurs business accelerator helps early-stage minority businesses.

He also said minorities often have less startup capital due to less generational wealth and other challenges such as child care needs and having to provide for extended family members. According to Salas-Romer, they need grants, child care and coaching.

Collaboration among those who have been through the same journey can be key in helping these businesses succeed.

Finding mentors is another challenge facing minority entrepreneurs, according to Jesse Phillips, coordinator of inclusive growth with the Greater New Haven Chamber of Commerce, who said mentorship is key for scaling a business and forming key partnerships.

The KNOWNpreneurs program is taught by minorities who understand the barriers and can empathize with minority businesses, Salas-Romer said. Often, its graduates end up teaching and mentoring others. KNOWN regularly has networking with capital providers and area leaders to build relationships. Lack of proper business education and mentorship can lead to minority businesses failing to grow, Salas-Romer said.

KNOWN also helps with marketing, networking, social media and consulting.

Sizing up market

Tea Montgomery, who owns Threads by Tea, a New Haven clothing design studio that sells wearable art, says he has been helped by area organizations, which assisted him in finding key connections.

Montgomery never initially intended to start a business. He started making wearable art for himself, then people saw his creations and asked for custom-made ones.

“Discovering what the business was actually becoming and how to navigate with no prior experience or blueprint was the first challenge,” Montgomery said.

Some of his challenges have been figuring out his business’ market and how to market, as well as making necessary connections, he said.

He credits Collab, a New Haven-based entrepreneurship accelerator, with being the first to support him.

“Not only did it introduce me to new networks and resources, but it had me thinking about my business in more in-depth ways than I would have alone,” he said.

It got him to think about his pitch, values, customers, funding and legal matters.

He then joined KNOWNpreneurs for more of the same assistance. He took Small Business Development Center courses and connected with a mentor, and took courses with Liberty Bank related to finances.

He recently joined the Greater New Haven Chamber of Commerce to take advantage of the resources it provides and to expand his network.

Key program connections

The Greater New Haven Chamber partners with other organizations involved in helping minority-owned businesses. Through the chamber’s newsletter, it highlights diverse businesses, whether they are a chamber member or not, Phillips said.

The chamber also has created a “diverse business enterprises” directory on its website, so people can go to one location to find out how to support minority-owned businesses.

“We offer free chamber membership and work with them during accelerator programs for services they might need,” Phillips said.

The Connecticut Community Outreach and Revitalization Program (ConnCORP) has its Economic Justice Fund, which provides support to Black-owned businesses with grants of up to $10,000.

Comcast has its “Comcast RISE” program. Business owners can secure funding for new technology or for a branding and advertising consultation.

Paul Savas, vice president of Comcast Business for the Western New England Region, said small businesses owned by people of color or women have been some of the hardest hit by the COVID-19 pandemic.

According to the National Bureau of Economic Research, between February and April 2020, the number of active Black-owned businesses declined by 41%, Latinx-owned businesses declined by 32%, and Asian-owned businesses dropped by 25%, versus just 21% for the general population, he said.

While initially geared toward minority-owned businesses, Comcast recently expanded the program in 2022 to include women-owned businesses. So far, there have been 30 recipients in the company’s Western New England Region.

“To not have a technology expense, or to get well-needed help on branding yourself, has been really well-received,” Savas said.

Inesta Belardo, CEO and owner of B&A Benefits Solutions in Waterbury, which helps clients find health insurance plans, has been among the beneficiaries.

Belardo said she applied for the grant on a whim, and it provided her with visibility and tools to help her business grow, including new, upgraded technology and equipment.

KeyBank, meanwhile, has partnered with the Eastern Area of The Links Inc. to provide a customized Key4Women Business Education Series and micro-grants to minority women small business owners and entrepreneurs.

The bank’s financial advisors have provided workshops to help businesswomen with their financial needs. KeyBank Foundation is providing $25,000 for micro-grants to participants who successfully complete the program.

In spite of the programs and services available to help, entrepreneurs say more would be better.

“There is always room for more programs,” Bowens-Mercado said. “Minority businesses are growing, so that means more resources will be needed.”