Q&A: How Black-Owned Businesses Can Find the Best Tools and Financial Resources

How the right financial support, expert counsel and a strong team can help Black-owned businesses be ready for success

The role of Black-owned businesses in the economy is significant and growing. There are approximately 3.1 million Black-owned businesses in the United States, an increase of close to 30% in the last two years.

We recently spoke with Handy Duterlien, a virtual relationship manager with Citizens for the last 15 years, about the opportunities and resources available to Black entrepreneurs.

Citizens: The data shows that the number of Black-owned businesses is increasing at the highest rate in 26 years. Why do you think there has been such a significant uptick?

Handy Duterlien: Because of COVID-related shutdowns early in the pandemic, many people lost their livelihood. But they didn’t lose their passion or the commitment to the flexibility of being their own boss. What’s so impressive is that it would have been an easy time to feel discouraged, but people did not give up. Instead, these entrepreneurs recognized that there were needs to be fulfilled and they started companies to address them. Communities also pulled together to support these entrepreneurs and make new business ownership possible. Research shows that approximately one in five Americans shopped at a Black-owned business in response to the Black Lives Matter movement. The whole experience, for entrepreneurs and their customers, showed everyone the important role of community in supporting businesses so that we may all succeed.

Citizens: What are the biggest challenges currently facing businesses in general?

Duterlien: One of the biggest factors facing every type of business is employee retention. Companies need to pay competitive salaries and listen to what staff members need in terms of flexibility and support and create a game plan to keep their most valuable team members engaged. Keeping your best employees will be an important focus even if the hiring environment cools a bit since skilled staffers are always vulnerable to being hired away. And of course, there’s also the ongoing challenges of having adequate cash flow and being able to access credit when you need it. Available credit helps with growth and survival, and I emphasize the importance of being prepared with all of my clients.

Citizens: What are some things every entrepreneur should do to prepare for both challenges and opportunities?

Duterlien: First off, it’s important to have a dedicated business banking account, separate from your personal finances. This will make it easier to track business expenses and revenue, prepare and file taxes and know your company’s true financial standing. Having a business account will also help you build a credit history for your company. A credit history is important to establishing partnerships, obtaining the best pricing from vendors, and securing financing. I tell every entrepreneur I work with to establish a line of credit (LOC) which they can tap into when they need it, but not pay for it when they don’t. The best time to apply for any type of financing is before you need it, when times are good.

Citizens: What other resources should Black business owners have in place?

Duterlien: Finding the right partners — such as a reliable CPA, a good attorney and a business banker who understands your needs — should be a priority for any business. All business owners, regardless of their experience, intelligence or skill, need experts they can turn to for decision-making support. Certain financial tools may also help businesses be prepared for the various developments a business may encounter. Merchant services such as credit and debit card processing help companies collect payments faster and more reliably. Likewise, tools for invoicing and collections may process payments more quickly and improve cash flow. Businesses do best when they focus on cash management and use tools to efficiently bill and collect. That’s the lifeline of a business.

Citizens: What other financial steps are important to success?

Duterlien: I’ve found that there are some business owners who are knowledgeable about their company operations, but don’t have adequate supports in place for determining how to plan for their future. For example, some don’t have adequate life insurance. This is understandable since it can be all-consuming to run a company. But, it’s important to build your personal financial strength by taking the right steps at the right time. This is where your expert team may help. Work with your CPA or business banker to gain a good overview of the assets you have now and those you want to amass. Then, work with them to create a plan to reach your goals.

Citizens: What lessons have you seen Black business owners learn during the past few years of volatility?

Duterlien: COVID was a stress test for many companies, and it forced business owners to open their eyes to the many organizations offering support. For instance, the Small Business Association (SBA) provided access to financial assistance, and we were happy to help customers apply for Paycheck Protection Program (PPP) loans through the SBA. Businesses that had never worked with the SBA before were able to use these resources to reposition their businesses, improve their financial standing and credit scores, and be ready to start fresh. Over the last few years, by necessity Black-owned businesses have also needed to become smarter about protecting themselves against rising instances of fraud. Tools such as customized account alerts that notify businesses of suspicious account activity give business owners peace of mind so they can deter unauthorized transactions.

Resources for Black Entrepreneurs

• Black Business Association (BBA). This nonprofit offers training, financial opportunities and advocacy efforts for Black-owned businesses.
• Black Founders. Founded in 2011, Black Founders’ mission is to increase the number of Black entrepreneurs in technology by creating access to advice, mentorship and funding.
• Coalition to Back Black Businesses. Over a four-year period, the American Express-founded Coalition plans to provide over $14 million in grants, training and resources to empower Black-owned small businesses in distressed communities.
• Minority Business Development Agency (MBDA). A subsidiary of the U.S. Department of Commerce, the MBDA offers minority-owned businesses guidance on how to obtain funding and compete globally.
• National Minority Support Development Council (NMSDC). Minority Business Enterprise (MBE) certification through the NMSDC helps minority-owned businesses gain access to business, contract, education and networking opportunities.
• SCORE for Black Entrepreneurs. Funded in part by the SBA, this nonprofit offers mentorship, education opportunities and other tools to support Black-owned businesses.
• Small Business Administration (SBA). Certification through the SBA’s 8(a) business development program helps socially and economically disadvantaged businesses compete for federal contracts. Businesses that are at least 51% Black-owned are eligible to qualify.
• U.S. Black Chambers. This organization supports a network of African American Chambers of Commerce and business organizations in their work to develop and grow Black enterprises around the United States.