Minority-Owned Business Vulnerability

Summary

The COVID-19 pandemic has hit minority-owned businesses disproportionately harder because they are likely to be concentrated in industries immediately affected by the pandemic (such as arts and entertainment, personal services, construction, repair, transportation, and restaurant industries). These minority-owned businesses are also facing systemic inequalities that make it difficult to stay afloat. The first month of the shelter-in-place wiped out some 3.3 million businesses nationwide (or 22%), including some 440,000 Black-owned (41% drop), 660,000 Latinx-owned (32%), and 230,000 Asian-owned (26%) businesses.

Due to poor data availability, very little is known about the impacts to local Black, Indigenous, People of Color (BIPOC) owned businesses in the San Francisco Bay Area.3 Some cities have been tracking business closures; for instance, the City of Berkeley recently estimated that about 9% of its businesses, dominated by arts, personal services, nonprofits, and retail, have already closed permanently, with many more at risk.4 However, Bay Area cities generally do not track their BIPOC-owned businesses systematically, so they know very little about what is happening specifically to entrepreneurs of color.

Given the ongoing challenges in obtaining data on BIPOC-owned business vulnerability, the Urban Displacement Project conducted a multi-stage process that culminated in the creation of an online mapping tool which highlights vulnerable BIPOC owned-businesses and a set of explore the feasibility of a permanent infrastructure for collecting data, monitoring business health, and recommending policies to support BIPOC-owned businesses. We held one-on-one conversations and focus groups with local stakeholders, including city governments, various ethnic chambers, economic development directors, CDFIs, and small business associations. The conversations served as ground-truthing exercises, but also helped surface more information about the specific vulnerabilities businesses are experiencing.

Key Findings

  • 29% of all businesses in the nine-county Bay Area region are estimated to be BIPOC-owned.
  • There are an estimated 6,238 minority-owned businesses across Oakland, Redwood City, Richmond, San Jose, San Francisco, and South San Francisco.
  • Nearly half of minority-owned small businesses identified across the six study areas are Asian-owned.

 

Policy Recommendations

Convening local stakeholders across the Bay helped to identify not only potential sources for data, but also resources such as technical assistance, loans, and marketing to help BIPOC businesses recover.  Key themes that emerged from these stakeholder conversations included: (1) access to capital, (2) commercial displacement mitigation, (3) small business support systems, (4) data collection

Collaborators