This fall, JPMorgan Chase announced a $30 billion commitment to support underserved communities, especially the Black and Latinx communities, with loans, equity, direct funding and mentorship. They’re joined by a series of other high-profile financial commitments to diversity, including one from American Express for $1 billion.
The link between diversity and inclusion and profit has never been more clear. It’s not just big banks like Chase and American Express that are realizing the myriad benefits of building a diverse and inclusive business. Small businesses across the country are making the effort to do their part to employ diverse voices and create inclusive work cultures.
During the Big Week for Small Business Summit, CO– hosted a panel on diversity and inclusion with Mikal Quarles, national field manager, business banking at JPMorgan Chase; Rick Wade, senior vice president of strategic alliances and outreach at the U.S. Chamber of Commerce; and Cat Colella-Graham, founder of Cheer Partners. Here’s what they had to say.
Diversity is good for business
In addition to being good for the country, there’s a strong business case to be made for pursuing greater diversity at your small business. “At the Chamber, we see the value proposition for diversity, equity, inclusion. It’s not just a moral imperative, but...we have a partnership with the Kellogg Foundation that basically says that if we address these inequalities in America and we embrace diversity and inclusion, then our GDP grows by around eight trillion dollars,” said Wade.
[Read more: The Business Case for Racial Equity]
What are the ways in which small businesses can advocate, hire and work toward achieving greater equality? It starts with understanding some of the challenges that minority-owned businesses face in this country.
As many people say, ‘small business is Main Street.’ Well, Main Street is not homogenous. It is diverse and rich and culturally different.
Cat Colella-Graham, founder, Cheer Partners
The challenges facing minority-owned businesses
Research shows that a Black-owned small business compared to a white-owned small business of the same size is six times more likely to use money out of their own pocket to start their business rather than outside funding of any type.
“The notion that minority-owned small businesses should have equal access almost sounds ridiculous to still be saying,” said Quarles. ”What we know to be true and systemically have not solved for have to have a point in time where those two things collide.” In his work with JPMorgan Chase, Quarles has identified three key areas where minority-owned businesses face significant challenges:
- Lack of access to information: Access to resources that help a business to make strategic decisions and to have equal footing. Businesses need an ecosystem that provides that information immediately and equally.
- Lack of access to opportunity: For instance, procurement contacts. Historically, contracts were given to those who you know and have relationships with; but the reality is that shuts out minority populations.
- Lack of access to capital: As you provide businesses with resources, information and opportunity, the next thing that they will need is funding to hire, purchase new equipment, invest in technology, pay for legal counsel and other necessary aspects of any viable small business.
Leveling the playing field for small business owners of all backgrounds is what will contribute to new innovations, growth, income and hiring.
The connection between small businesses and the community
Often when we think of small business owners, what comes to mind are startups that ultimately make it big; those that IPO, or raise Series C funding, or get acquired. But, Colella-Graham says that’s not always the most accurate depiction. “In this country for three hundred years, small business owners are people who made jam out of their kitchen — women who were supporting their families because men were not available,” said Colella-Graham. “They had to create businesses to survive. Bodega owners, tax accountants who started at home — we have to talk about what a small business owner looks like and what they bring to the table through their diverse backgrounds.”
Yes, says Colella-Graham, there’s a clear business case for increasing diversity at the small business level. But there’s also a human case. “As many people say, ‘small business is Main Street.’ Well, Main Street is not homogenous. It is diverse and rich and culturally different. I think that’s where not only is there opportunity for small businesses, but there’s a great ability to be more nimble than a larger business,” said Colella-Graham.
Our small business leaders have a voice and the opportunity to lead the way in what real inclusion and cultures of belonging mean, not just for their employees but also for their customers and community.
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