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Three leading small business experts on the challenges owners face, and the support they need to succeed.
Welcome to the forum, to amplify diverse small-business
voices, presented by Wells Fargo.
I’m Reggie Butler, and I’ll be your host.
Small businesses are the backbone of the economy,
making up nearly half of the workforce
in the private sector.
Within that, diverse businesses are among
the fastest growing segment.
Yet, despite their importance to the economy
diverse small businesses have historically faced
numerous systemic challenges that have created obstacles
to their success.
Then the pandemic added to these challenges,
disproportionately impacting diverse owners
who two years on continue to struggle against inflation,
labor shortages, and supply chain disruption.
Supporting small businesses is crucially important
to Wells Fargo in understanding the challenges they face
and the support they need is the first step
to providing that support.
Digging into these topics today is our esteemed panel
from the Pan Asian American, Black, and Hispanic
Chambers of Commerce.
First, we have Susan Allen.
Susan is the national president and CEO
of the U.S. Pan Asian American Chamber of Commerce
Education Foundation and the country’s leading voice
for equal opportunity for Asian American businesses.
Throughout her career in law and nonprofit,
Susan has helped to educate and develop generations
of entrepreneurs, and open doors to government
and corporate contracts for a community that generates
$1.3 trillion GDP.
Thank you very much.
It’s nice to be here.
Next, we have Ramiro Cavasos, president and CEO
of the United States Hispanic Chamber of Commerce,
the country’s largest business advocacy group for Hispanics.
He is an economic development expert,
who previously served as CEO of the San Antonio
Hispanic Chamber of Commerce, and was also previously
the Director of Research in Economic Development
at the University of Texas Health Science Center
at San Antonio.
Thank you, Reggie.
It’s an honor to be here with you.
We also have Ron Busby, president and CEO
of the U.S. Black Chambers, Inc.
He also has experience as a successful business owner,
who grew his first company, a janitorial firm,
from $150,000 in annual revenue to $15 million.
That company, USA Superclean, was recognized
as the largest Black-owned janitorial firm in the country.
Ron also developed his skills at some of the largest
corporations in America, including Xerox,
IBM, and Coca-Cola.
And thank you for having us, Reggie.
Looking forward to the conversation today.
Let’s dive in and start with the big picture.
Diverse businesses are so important to the American economy.
Yet so many of these owners face significant challenges.
So, Mr. Cavasos, why is representation important
to Hispanic businesses?
Why does that matter?
Well, it matters because our economy depends
on diverse businesses, or else we will not stay
the largest economy and the strongest economy in the world.
And so for us, you know, we need to be at the table,
not just because it’s good social corporate responsibility,
it’s an economic imperative that Black, Brown, Asian,
LGBTQ businesses, all of us within our chamber
are represented, but that we’re also present
at those decision making tables.
Ms. Allen, in the past, you’ve talked about lack
of representation, and how this is a significant obstacle
to Asian American business owners.
Now, the question is how does this
negatively affect businesses?
Why is representation so important to you?
I think representation in the United States Congress,
where policies and laws are made that affect our daily lives
is extremely important.
Take a look at the last two years when COVID-19
blanketed the country with fear, economic and health
devastation, and Asian Americans suffered
an additional problem, anti-Asian
discrimination and violence.
We lost lives and property, and so much more.
Two thirds of the crimes were perpetrated
at places of business owned by Asian Americans.
But the country was silent.
Mr. Busby, lack of representation is also harmful
to Black-owned businesses.
Do me a favor.
Can you tell us how some of the unique ways
that are in place right now that affect Black businesses
that might be different?
Well, great question, Reggie.
So often Black business issues get painted
under the broad brush of minority programs.
And what we asked for last year were three
particular specific issues.
One was intentionality.
We wanted to be able to understand what was happening
in the Black business community,
versus that of minority programs.
We have seen historically that it has been white women
that have benefited from minority programs.
About 78% of all of the federal government contracts
were awarded to white women,
versus those of Black business owners only received
1.67% of all of the federal government contracts.
We’re asking for three things, intentionality,
transparency, and then thirdly, accountability.
Diverse businesses were more likely,
compared to majority of white owned businesses,
to experience financial and or operational challenges
during the pandemic.
Mr. Cavasos, why were Hispanic small diverse business
owners especially challenged when it came
to accessing funds, and what did you learn
from that experience?
Well, Reggie, there are 5 million Latino-owned
businesses in America.
Only 52% of those 5 million businesses
had a banking relationship prior to COVID.
And even before COVID they were challenged to get approval
for lending, or more access to capital.
A big part of the challenges of these small businesses
once COVID hit was the fact that they have
a lot of information.
They needed more capacity to deliver their paperwork
to the banks.
A lot of our small businesses, our first or second
generation businesses, are still very paper driven,
and that’s just the reality of mom and pop businesses.
That’s the American dream realized today.
But many of these lenders could not access
these small businesses.
So some of our small business owners literally had to go
to a bank and use the pneumatic tubes to get their paperwork
to a banker so they could get their Paycheck
Protection Program Loan approved.
So that’s a big reason why we waited
for the the second round to really improve the system
and expand it to small minority and women owned businesses,
and meet them where they were.
You know, in many ways I think the struggles
of the pandemic actually haven’t ended.
Now we have inflation at a 40 year high,
supply chain disruption, and labor shortages.
Ms. Allen, we’re gonna come to you first.
How about for Asian American businesses during the pandemic?
How is the outlook?
Before the pandemic, Asian American businesses
were on an upward trajectory.
The Asian American community as a whole,
was projected to reach $1.3 plus trillion dollars in GDP.
The pandemic changed everything.
Our businesses closed down faster
than any other ethnic groups,
40%, 60% across the country,
and 90% in Los Angeles and New York,
the biggest drop in business revenue in the country.
Devastating, but 70% of Asian American community
is consisted of immigrants,
and sons and daughters of immigrants.
That’s why we are so independent.
So to answer your question, Reggie,
the outlook for the future is bright,
because our persistence, I believe in our own hard work
that many Americans do as well.
So Mr. Busby, what struggles ahead do you see
for diverse business owners now that they’ve come
through these two years, and not that it’s over,
but what do you see the struggles now?
You know, for years, we’ve been going to corporate America
as well as the federal government saying,
“Hey, we’d like to do more business with your entity.”
We’re trying to remove any type of barrier
that will allow us, or continue to keep us
out of the game of commerce.
And so the first one in reference
to not being able to find us, we’ve now created
our own certification program,
Now you can do two things.
You can be certified as a Black-owned business,
and for corporates as well as individuals
and federal government agencies you can find
You know, it’s inspiring to hear this collection
of I’m gonna call you advocates and allies
all at the same time, as we’re pushing things forward.
I think there’s another topic I’d love to explore,
and it’s about financial education.
Because the reality is diverse business owners
statistically are less likely to seek capital,
even among firms with good credit.
Mr. Busby, you’ve mentioned in the past
that Black entrepreneurs are sometimes taught
to do things that don’t adequately prepare them
when it comes to applying for financing.
So what are some of the areas that Black entrepreneurs
need to know about when it comes to financing?
If you look at the industries in which we over index,
usually those are the businesses
that have a more cash and carry relationship.
And so under times like COVID,
where we were told to go to a bank to get your finances
taken care of, and many Black-owned businesses
did not have that relationship.
And so we’re asking our business owners a couple of things.
Establish your banking relationships now,
because there’s always going to be another pandemic.
It could just be your social media page being hacked.
It could be you lost your debit card.
We’ve gotta make sure that we have relationships
where the bankers, and not just a teller,
not just a branch manager, but the banking decision makers
understand who you are, where you want to go,
and some of the challenges that you’re facing
to be able to help you get there long-term.
Ms. Allen, if you don’t mind,
what are Asian American business owners lacking
as far as financial literacy, and what can banks
and business owners do about it?
In general, there are two groups of Asian Americans
in terms of financial literacy.
There are those who are educated and have been investing
and saving, and know how to handle their money.
There are those who don’t.
And let me talk about those who do not.
They are Asian Americans, are savers.
They do put their money under their mattress.
And that’s why during the pandemic,
if they were asked to show their account,
the books, they can’t.
And the other thing is cultural differences
and language barriers.
There’s a lot of business out there.
The financial institution just need to know
where to go, how to knock, and how to approach them.
Mr. Cavasos, can you tell us how being on a bank board
actually opened your eyes to how lending works,
and why it’s important to have Latinos and Latinas
represented at those tables?
I had the honor of serving on a bank board.
I was the only Latino.
It was a community bank, and I was on the loan committee
and had no preconceived notions.
And, but serving on the loan committee,
I saw that there were Latino-owned businesses
that applied for a small business loan
who had a higher credit score that were denied,
or they had a repayment history that was stronger
than a non-Latino, or as we say in Texas
an Anglo-owned business.
And I literally had to raise my hand
at those loan committee meetings and say,
“Why did that get approved,
and this one didn’t get approved?”
So I learned at a very young age to be open,
to be transparent, to be vocal,
not to be in any way argumentative,
but to in essence clear the decks for small business owners.
When I see sometimes people are doing
as they try to form the very relationships with something
that may not even be present in their spaces,
they don’t know where to go unless there’s a program
that says, “It may not be one in your neighborhood,
but here’s what you can still do.”
People need to be a part of a network.
And for some small businesses,
they don’t always recognize the importance of networking.
So, Ms. Allen, can you tell us about some of the programs
at USPAC and how they are addressing specific challenges
that members have?
Asian Americans tend to be quiet
and keep to their own business.
But the major challenge at the very front
is that Asian Americans are still considered foreigners.
I see the big word behind you, Reggie.
We don’t belong.
We do not feel that we not belong.
My job as the chief executive and national president
of the U.S. Pan Asian American Chamber of Commerce
Education Foundation, together with our regional chapters
in California, Texas, Georgia, Illinois, and New Jersey,
the five states with the most critical mass
of Asian American population, as well as businesses,
is to make sure that they come out and speak up,
raise their hand, step up, volunteer.
Mr. Cavasos, can you tell us about the the 3 Cs
that you talk about, and why those are important?
And, how does the chamber help members develop
in those areas?
There’s no question that Hispanics
have been under capitalized for years,
or turned down due to discrimination.
We would have an additional $2.5 trillion dollars
in the U.S. economy if the under capitalized
Latino-owned businesses were able to receive lending
at the same level as non-Latinos in this country.
So capital is vital for scaling firms,
growing mom and pop businesses.
We’ve seen where it makes a difference
to open a second location or a third location
to a successful business.
Access to capacity building.
They need the tools that they need to get ready to apply
for a loan, to do a marketing plan,
to apply for federal contract work.
And then, of course, connections.
Less than 1% of the U.S. government’s federal contracts
go to Hispanic-owned businesses.
We have realized because of the pandemic
that we are so interconnected more so than we ever imagined
before, we need one another to be successful entrepreneurs.
And we’ve learned that our net worth as businesses
and business owners is our network.
I want to transition just to one other thing,
and it’s, you know, Mr. Busby, do something for me.
Can you tell us about the ways you reach out
to Black-owned businesses through media or mentorship,
and why that is important right now?
I think we are at a point now
where it’s really about economic parity,
about moving an economic agenda for Black people.
And like I say, in order for there to be a great America,
there’s got to be great minority America.
And in order to have great minority America,
you gotta have great minority businesses.
And in order to have great minority owned businesses,
you have to have great minority chamber leaders.
And so I’m excited about sharing my role
as a president of the U.S. Black Chamber with Ramiro,
as Susan, both sharing their roles of leading
their communities as well as their businesses
across the country.
So here’s what we know to be true.
We all need to network.
We know the importance of networking.
For some people, it’s frustrating.
For other people, they love it.
The reality is though, is that networking with peers
is equally as important for mentoring
and growing businesses.
But there are a lot of barriers to diverse owners.
So, Ms. Allen, how do you advise your members
to knock down these networking barriers
and be more effective networkers?
Well, you know, for a long time,
I’ve always told this story, but not heard enough
among Asian American businesses,
that they are the one shrimp cocktail party goer.
And I go to the buffet table, pick up a shrimp cocktail,
eat it, and drop the drink, and leave.
They don’t stay around to network.
And they’ve lost all that opportunity to create a network
of their own.
Watch the news, watch world news, national news,
domestic news, pick up the magazine
when you’re at the doctor’s office and read the headlines.
Get to know what’s going on around you.
So then when you go to a networking event,
you will understand what you have to say,
because you will have all that content,
assets inside of you.
You’ll be very comfortable.
Building on that, Mr. Busby, what do you have to say
about what does good networking look like?
I live in Bowie, Maryland, and I tell the story
all the time.
I bought a home.
I used a Black realtor.
I used a Black bank.
I used a Black mortgage company.
I used a Black moving company.
I used a Black home inspector.
I used a Black installation company.
Everyone that touched the transaction was Black.
I was telling that story at an event.
There were 25 young Black men
that all used to meet on Friday mornings at 6:00 AM.
And they would get together to network,
to really share information, to create best practices
for them to move their individual companies.
I said, “But what you don’t know is what you don’t know.”
They didn’t know and didn’t have the understanding
of banking relationships.
And so on a Friday morning, we took all 25 young Black men
down to the bank, in their suits and ties,
to make sure that they understood the importance
of networking together, but more importantly
having outsiders tell them best practices
of things, and policies, and ideas
that they might not have had on their own.
So there’s a couple of things that have been
on my mind, and really it’s banks like Wells Fargo
that are doing their part to push things forward.
Even in the work that I do, I tell small business owners,
or marginalized populations, that one of the things
you have to do is focus,
like where do you spend your energy?
So if you think about that energy, action,
impact, momentum in order to get to progress,
I’m asking you, this elite panel,
where do you think small business owners
should focus their energy and their time?
And Mr. Cavasos, I’ll start with you.
Well, Reggie, it’s been an honor to be here
with you and Wells Fargo.
And we tell our small Hispanic-owned businesses,
that no matter what product that they make
or what service they provide,
that their focus should be on people.
We’re all in the people business no matter what we do.
And so part of networking, part of building a small business
into a multi-billion dollar business
is to be focused on your customer,
what their needs are, and what their focus should be.
Okay, Ms. Allen, what do you have?
What’s that piece of advice?
COVID-19 has changed a whole lot,
turned the world upside down,
changed the way we do business, we live,
we socialize, and we conduct business.
What we did in 20 and 21 are testing the ground.
In 2022, we’re beginning to sit back and see and say,
“What did we do in 2020 and 2021 that’s a waste?
And what did we do that is going to be useful
that would take us forward?”
That’s what I would tell my small business to do.
Mr. Busby, what do you think,
what’s that piece of advice that you wanna share
with a small business owner?
Where should they focus?
And I’ll end with, if I was a small business owner,
which I was more than half my life,
and had a father that had a small business,
and he used to say, “Spend more time working
on your business, versus working in your business.”
So many small business owners are doing the day
to day grind, trying to make sure that they can
pay their bills, that they very seldom have the time
to really look at the future of what that business may be.
So I would tell business owners to make sure
that they’re working on their business
as much as they are working in it.
So thank you, Ron, Susan, and Ramiro
for sharing your insights with us.
You know, the last two years, I’ll admit have been difficult
for many diverse small businesses, but as we’ve discussed
their challenges are more systemic
and go back far before 2020.
As Ron said, “Diverse business owners have proven
to be amazingly resilient.”
So thank you all for your insights
for how financial institutions and these owners
can work together to create more success.
Also, please know that you can find additional resources
to support your growth as a small business owners
Thank you so much for joining us.
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