(Photo by Danielle Selber)
Philadelphia is positioned to be the best city for minority entrepreneurs — but there are some barriers that need to be overcome before that happens.
That topic and others related to minorities and entrepreneurship were discussed last Wednesday night during a panel co-hosted by Generocity and Tribe 12, an accelerator for those in the Jewish community.
The panel included Archna Sahay, director of entrepreneurial investment at City of Philadelphia’s Department of Commerce; Daniel Levin, special project manager at The Enterprise Center; Brian Gralnick, director of the Center for Social Responsibility at the Jewish Federation of Greater Philadelphia and vice chair of Generation Appreciation Philadelphia; and Shauna Howard, founder of Fierce Stitch and SCORE Philadelphia board member.
Here are some key takeaways from the conversation.
On what the terms “minority” and “entrepreneur” really mean:
- It’s contextual — “If you look at it from a numbers game, anyone who is not in the majority is a minority,” Dan Levin said. “But women, for example, are a relative minority as it relates to STEM fields and being business owners.”
- You can self-identify — Sahay said though she is South Asian and an immigrant, she has never thought of herself as a minority. Gralnick said, as a Jewish man, he rarely considers himself a minority, but does occasionally.
- It’s all about how you’re treated — “Whenever there’s an instance where I have to compete against a man for something, and the man gets it because of his masculinity, then, clearly I’m a minority in that regard,” Howard said.
- Hasidic Jews are the only religious group considered a minority by the federal Minority Business Development Agency.
- Being an entrepreneur isn’t about selling a product — “It’s about, ‘How much risk are you willing to take on for an idea that you created for yourself?’” Howard said.
- Anyone can be considered an entrepreneur these days — “Whether you’re working for a corporation or you are out building your own business, we’re all entrepreneurial on some level,” Sahay said.
- It depends on how hard you’re willing to work — “An entrepreneur is a hustler,” Howard said.
On the challenges of being a minority entrepreneur:
- Investors invest in what they understand — “So, from a gender perspective, the fact that there are so few women in venture capital, it’s a challenge for female entrepreneurs to find the kind of money they need,” Sahay said.
- Minority business owners traditionally have less access to capital than others, Levin said. Plus, minority business owners might unfairly be held to a higher or lower standards: There are “inherent prejudices that do exist.”
- Those prejudices might reveal themselves in subtle ways. Sahay gave the example of a prolonged conversation with an investor about potential venture funding in which the investor spent half the time asking about her background. “The other person thinks they’re just getting to know you,” she said. “You’re actually telling me, ‘You’re very different from me, and you’re probably not going to invest in me.”
On the benefits:
- There are a lot of government and nonprofit organizations that specifically help minority business owners; see the bottom of this page for a list of those discussed.
- City government is required to give a certain number of government contracts to minority-owned, women-owned and disability-owned businesses for projects such as the renovation of the new police headquarters in West Philly, Levin said. “There’s, at least in theory, a reserved seat at the table.”
- Philly is a city that “really, really cares about every single one of its citizens and their success,” Sahay said. The Department of Commerce strives to make its information accessible by publishing it in several languages and sending representatives to neighborhoods where there may be business owners without other access to it.
On the importance of mentorship:
- It’s about opening doors — “I think mentorship is important for women especially because there aren’t enough of us in every single sector that makes a difference,” Sahay said. Plus, mentors “can advocate for you in rooms you’re not in” and offer networks and contacts.
- It’s about filling in the gaps — “Because I didn’t have a mentor, I mentor, all the time,” Howard said.
- It’s about sharing experience — Levin said he has asked people in relevant careers, “What can you tell me? How can you help me out?”
- Entrepreneurs, especially, need mentorship — “Entrepreneurs tend to be really isolated, really focused on what it is [they] are doing,” Levin said. “If you’re doing something unique, it’s even harder. It really is helpful to have somebody to bounce ideas [off of].”
- In the nonprofit sector, there are formal programs that offer similar guidance, such as the Nonprofit Leadership Institute and the Center for Progressive Leadership, Gralnick said.
On the first steps to formalizing your business:
- Do your research — Howard said she knew she could sell scarves in Philadelphia, not near the Equator. Once you’re sure there’s a need for your product, then start the process of getting an employee identification number and registering your business with the IRS, she recommended.
- Then, form your business plan and financial projections — but “you can have analysis paralysis, so don’t wait until everything is completely perfect” to get started, Levin said.
- Find your customers — and find them in Philadelphia, Sahay said. If you have them, “the money will find you, and the money will come from anywhere.”
- Have a plan — As a nonprofit funder, Gralnick said, he asks, “Where is your money going to come from in five years?”
On whether Philly is, truly, the best city for minority entrepreneurs:
- Yes — Entrepreneurs here have access to two other large markets (D.C. and NYC), the cost of living isn’t very high, there’s a strong millennial population, and City Hall understands the importance of a diverse business market, Sahay said. “There’s a lot of energy and momentum and drive behind it here at a very, very special time.”
- No — According to 2012 data from the U.S. Small Business Administration, Philadelphia has the 14th-highest number of receipts from minority-owned businesses, Levin said. There’s also less venture capital available compared to other cities.
- But it is getting better — “The [city’s] leadership is making a concerted effort to be more welcoming to businesses,” Levin said.
- It depends on your effort — Minority status probably doesn’t have much to do with your status of being an entrepreneur, Howard said. “If you know what it’s like to fight, if you know what it’s like to be discriminated against, if you know what it’s like to work twice as hard to get a fourth of the way … then being a minority in general will help you be a better entrepreneur. But I think it requires a specific mindset, not so much where you stand on the spectrum of minority vs. majority.”
- It’s in the water — “Everybody’s got a hustle in Philly,” Howard said.
LIST OF DISCUSSED RESOURCES
- Philadelphia Business Services
- StartUp PHL
- The Enterprise Center
- Philadelphia Department of Commerce
- SCORE Philadelphia
- Jewish Federation of Greater Philadelphia
- Minority Business Development Agency
- DreamIt Ventures
- Catalyst Fund
- The Welcoming Center for New Pennsylvanians
- U.S. Small Business Administration
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