Despite economic uncertainty caused by the COVID-19 pandemic and systemic barriers, Black and Latino entrepreneurs saw unprecedented business performance over the past 12 months, according to a survey produced by Ernst & Young LLP (EY US) titled The Entrepreneur’s Paradox: How Black and Latino Entrepreneurs Are Balancing Growth and Uncertainty. This research reveals that while nearly nine out of 10 established Black and Latino entrepreneurs met or exceeded their performance expectations this past year, nearly all are concerned that it was driven by a short-term boost in attention.
“Black and Latino entrepreneurs are an economic force, and our research underscores their business resiliency and output,” said Lee Henderson, Americas EY Private Leader, and Executive Sponsor, EY Entrepreneurs Access Network. “But more action is needed from consumers, investors and the entire business community to address disparities caused by lack of access to capital, mentors and networks, and to sustainably ensure the long-term economic growth of minority business owners.”
The survey was commissioned by the EY Entrepreneurs Access Network, an immersive mentoring program and business accelerator for Black and Latino entrepreneurs. This research set out to understand the unique experiences of these leaders during the COVID-19 pandemic and in the wake of a national reckoning on racism and discrimination. More than 1,000 established Black and Latino entrepreneurs, who lead businesses across industries and produce annual revenues from $2m to $25m, were asked to reflect on how the current social, political and economic environment has impacted them, their businesses and their outlook.
Key findings include:
- Strong and sustained performance: Despite the disruptions of COVID-19, 88% met or exceeded performance expectations, 73% experienced moderate to significant business growth, and 77% anticipate additional growth in 2022 compared to 2021.
- Impacts of America’s racial reckoning: 88% say that the strong focus on racial equity has increased attention for their businesses, and 99% say this allowed them to invest in their businesses in ways they might not have otherwise by innovating products, improving infrastructure, and hiring.
- Concerns about waning attention: Among those who experienced increased attention for their business, nearly all (93%) worry that it will provide only a short-term lift, and nearly half (48%) say a pullback on momentum would make it difficult to retain existing employees.
“Our research shows that Black and Latino entrepreneurs are rightly concerned that their businesses might be negatively impacted as focus on them fades,” said Nit Reeder, EY Entrepreneurs Access Network Program Director. “The greatest equalizer of wealth disparity is business ownership. We must maintain strong support of minority entrepreneurs to make lasting change.”
Additionally, the survey highlights how Black and Latino entrepreneurs engage with mentors and professional networks. Of those surveyed, 56% say a network of trusted vendors and partners is key to business growth, and 53% identify access to a mentor as a similarly valuable resource. This underscores the impact of the EY Entrepreneurs Access Network model, which not only welcomes participants into an elite network of entrepreneurs, investors, advisors and other business leaders, but also provides each participant with a dedicated EY executive as their personal mentor.
“The Entrepreneurs Access Network has been invaluable,” said Maurice Brewster, Founder & Chief Executive Officer, Mosaic Global Transportation. “My EY mentor facilitated connections with venture capital firms and has even helped me launch a brand-new electric vehicle business. Although I’ve been a CEO for nearly 20 years, this program gave me the opportunity to work on my business, not just in it – with real results.”
The EY Entrepreneurs Access Network currently includes 120 Black and Latino entrepreneurs from across the US and connects participants with resources, networks and one-on-one mentoring to close long-standing disparity gaps. The next cohort of entrepreneurs for this program will be announced in December 2021.
The EY Black and Latino Entrepreneurs Survey was conducted by Wakefield Research among 1,000 established Black and Latino entrepreneurs from organizations with revenue in the $2m to $25m range. The survey was fielded using an email invitation and an online survey between August 3 and August 18, 2021.