Minority entrepreneurs represent some of the fastest-growing segments of business in the United States today, and make up about 17.5 percent of all employers in the country.
Yet they often face a dilemma when it comes to marketing their product: How do they appeal to the widest possible audience while also banking on their background and directing services to the communities they came from?
“They’re kind of walking a tight rope,” says Pierre DeBois, founder and owner of the Gary, Indiana-based marketing and analytics company Zimana. “Sometimes mainstream consumers or business partners see the words ‘black-owned business’ and assume those services aren’t for them.”
DeBois caters his services to all local small businesses, regardless of ownership. But he helps local minority entrepreneurs specifically by providing business guidance and marketing tips through Chicago’s local minority entrepreneur hub Blue 1647, and to him that’s a personal decision more than a business one.
Growing up in Gary, he saw how white flight in the 1960s and redlining impacted economic opportunity in the majority-black city.
When he was a kid, he wrote letters to major companies like McDonald’s and Marshall Fields (which was acquired by Macy’s in 2006), asking them to move into his neighborhood and provide job opportunities. “I still have that [Marshall Fields] letter,” he says with a laugh.
While working as a mechanical engineer at Ford Motors, he considered going into venture capital to back minorities who had strong business ideas. But that career didn’t stand out to him as one that would change, or help small businesses, overnight.
“Venture capitalism tends to invest in high-growth industries,” he says. That’s a problem because there are a lot of minority-owned businesses in industries that don’t guarantee big returns — like small-scale food manufacturing, which has been a key platform for minority entrepreneurs in the nearby Chicago area.
He also worked a stint as a loan officer for Accion, which, on paper, was the next best thing to being a venture capitalist. There he realized that a lot of minority entrepreneurs and small businesses were starting out with messy strategies that didn’t exactly compel an interest to dish out loan money.
At that point, the business is “kind of like a Corvette with no tires — it becomes a good idea that doesn’t go anywhere,” says DeBois. He eventually saw the value of marketing and analytics as a way to reach minority businesses, and help them build growth strategies before they went to petition for loan money or government contracts.
Recognizing the financial limitations minority entrepreneurs face, DeBois says his services are lower cost than traditional marketing assistance. Minorities, after all, are less likely to get loans than non-minority businesses, and the loans they do get are generally for less amounts than their non-minority counterparts.
Black entrepreneurs, for example, are more likely to rely on credit card debt than business loans to fund their businesses, which often comes with higher interest rates that pose a higher chance of undercutting solvency.
Through his services, he’s so far helped a musician better market his studio online by getting him to upload previously unheard and unseen videos and tracks from his studio to his website. He also discouraged a minority contractor from blanketing his team page with stock photos of an all-white work crew — when his crew was actually all black.
“The level of diversity that people look for now, I think, allows you to plan where you can service the community and also make sure you’re exchanging dollars within the community, while also planning for larger growth,” says DeBois.
One way minority entrepreneurs can get a leg up on expanding their contracts is by getting officially registered through the Chicago branch of the federal Minority Business Development Agency. The city has been on a roll streamlining initiatives that help increase the competitiveness of small businesses and minority-owned businesses in securing local government contracts in areas like construction and internet technology.
The other, says DeBois, is to build out relationships with the audience and customers who’ve been with you since the beginning, no matter the size. “The Pareto rule — that 80 percent of your business comes from 20 percent of your customers — is true. But you need analytics to parse the segments that make up that 20 percent.”
In some ways, not having the funds or manpower of a major firm can be an advantage in fortifying already-strong customer relationships.
Minority and small-business network The Diversity Direct points out that those larger companies are “slower, have bottom-line oriented management, have impatient shareholders, and frequently view their interactive, Internet, or new media divisions as experiments rather than start-ups.” The network suggests that smaller companies take advantage of this by building a “more personal, interactive experience with their customers.”
DeBois seconds that note, saying that smaller entrepreneurs can succeed at “ultimately developing a customer service and experience advantage that larger corporations fail to do.” That means minority entrepreneurs in the Chicago and Gary, Indiana areas may be better equipped to walk the diversity and client tight rope than any of their non-minority competitors in the end.
The Equity Factor is made possible with the support of the Surdna Foundation.