New Department of Commerce Report: Time, trust, and technology key to small business success
OLYMPIA, WA ? Time, trust and technology are key to ensuring small businesses farthest from opportunity in Washington state have the right mix of technical assistance and financial resources to thrive.
A groundbreaking report by the Washington State Department of Commerce found that although technical assistance providers do offer the right mix of resources, minority or women business owners and those located in rural areas often do not have access to it. The study focused on micro- businesses with five or fewer employees and $100,000 or less in annual revenue.
?Whether these businesses succeed or fail has a huge impact on the financial future of entire families and communities,? said Washington State Department of Commerce Director Lisa Brown. ?And when they are successful, they build prosperity for our entire state ? they grow faster than other businesses and build jobs, economic opportunity and financial inclusion.? A 2016 Association for Enterprise Opportunities study found that microbusinesses that receive the right mix of capital and support grow 30% faster than their peers.
Commerce?s study found that three factors -- time, trust and technology ? play important roles in whether or not businesses can access capital and support:
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Time: Owners need between 40 to 80 hours of assistance, after business hours, on nights and weekends.
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Trust: Providing in-language services from technical assistance providers that business owners already know and trust from their communities are integral to providing effective services. Although access to capital and financing was the top unmet need, minority-owned businesses and those in rural disadvantaged communities face unique, systemic challenges to capital access.
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Technology: For businesses farthest from opportunity, technology access? ranging from basic broadband to computers and digital literacy -- is a crisis. Without access to the right technology, businesses can?t engage in online retailing or apply for grants and many other financial products.
?In building trust, it?s about one-on-one communication, centering people first and then being accountable to them,? said Angie Hinojos with Centro Cultural Mexicano, part of the Small Business Resiliency Network.? The 31-member SBRN was launched by Commerce in 2020 to partner with and support community-based organizations as they provide in-language and culturally relevant support to small businesses farthest from opportunity.
?Our community can count on us time and time again,? Hinojos said. ?We often see that when someone is well served, they share that positive experience throughout the community, which allows for others to find us and share in those resources.?
The study surveyed small business technical assistance providers and interviewed leaders of communities farthest from opportunity. The results will help the state and philanthropic sector prioritize resources to fill in gaps and scale services.
?Part of our goal with this report is to ensure that all small businesses ? and especially those farthest from opportunity? have access to the technical assistance they need in an approach and with resources that will create pathways to their success,? added Director Brown. ?I look forward to continuing to invest in these technical assistance providers and learn from their guidance so they can continue to best serve our thriving small businesses.?
This report is part of Commerce?s Washington Opportunities Networks (WON) initiative, which connects minority-, women- and LGTBQ+ owned businesses and those located in rural areas with the financing they need to be sustainable. Many of these owners do not have access to conventional bank loans and must resort to financing their businesses on credit cards or predatory lending, which can lower their credit scores and make it even more difficult to get sustainable financing.
Find the full report in English and executive summaries in nine languages?English, Spanish, Vietnamese, Russian, Ukrainian, Tagalog, Somali, Korean, and Mandarin?on the Commerce website at?Commerce.wa.gov/TA-Report.
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