In any circumstance, opening a business is an arduous task full of ups and downs. However, for minorities, starting their own business can present different challenges. After all the chaos that the COVID pandemic caused during 2020, 2021 has been considered the comeback year, where people are again assuming risks to pursue their financial goals.
Currently, minorities are looking for ITIN loans (you can read more about it on Camino Financial) and other strategies to help boost their businesses. Still, there are several challenges they must face.
Economic investment is a key and essential part of any business. Still, this loan system generally demands a series of requirements that some minorities cannot meet due to their lack of paperwork. This can be the main drawback that a BIPOC can encounter.
The lack of financing means that minority businesses cannot grow, stagnate, or even start. However, ITIN loans are one of the best options that BIPOC can opt for. ITIN loans do not require a social security number but only an ITIN number. This is ideal for undocumented immigrants.
Businesses Affected by COVID-19
According to McKinsey and Company, BIPOC businesses are mostly focused on niches that are very close to the customer, such as food, cleaning, laundry services, and retail companies. This means that most of these businesses were directly impacted by the pandemic.
For now, another challenge to overcome is to recover the economic stability of these companies. Again, ITIN loans could be of great help to boost businesses that were hit during 2020. As these activities are gradually resuming, business owners must find a way to attract the public again and guarantee them safety.
Lack of Massification of Its Services
Although minority businesses are services that a large part of the population uses, the public will likely label these services, considering them only for the people to which the minority belongs. That is, if it is a Mexican business, those who are not Mexican might think that the business is aimed at Mexicans.
Another challenge that minority businesses must face is overcoming the barrier of labels and massify what they sell to reach their target audience, regardless of their race or nationality. Fortunately, 2021 is projected as a year of inclusion and acceptance of different cultures. Little by little, a generation that does not keep prejudices continues to grow and prefers to connect with people who are different from them.
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As a consequence of not having a sales plan, the company cannot generate the income it needs to finance the operation and strategies of the business. The lack of financial resources makes it difficult for the company to invest in its growth. So, to grow, you need to increase income, which implies investing more, forcing companies to borrow from the banks.
Continuing with this situation, it is very common for many minority companies to plan their annual budget without considering what they need for business growth. Therefore, when allocating resources, the goals and strategies needed to grow the company should be prioritized instead of adjusting to a budget that only limits the company’s growth.
The Expectation for What Is to Come
Despite the obstacles above, there are currently many tools that minority businesses can take to increase their knowledge and boost their business, not just loans but workshops, online marketing courses, and even communities that come together to support these businesses. Although we come from a difficult year economically speaking, it is expected that the following years will be of benefit and economic boost for all.
Founder Dinis Guarda
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