Small and new businesses have been buffeted by economic challenges. In response, federal, state and local leaders have created new programs to assist struggling entrepreneurs and business owners. Initiatives typically offer access to capital and technical assistance to help businesses pivot and thrive in uncertain times.
Ensuring that the new small business supports reach all owners has been a priority. Research and the early pandemic experience have clearly shown that many small businesses, especially those in under-resourced communities and those owned by women and people of color, have not had equitable access to capital or small business and entrepreneurial support programs.
New programs that are inclusive and equitable in serving needs of the entire small business community are being designed and implemented across the country. A recent Smart Incentives and Kauffman Foundation report identified three key insights for shaping these efforts. We had the opportunity discuss the insights and promising examples with program leaders during last week’s Kauffman Entrepreneurship Issue Forum.
Programmatic equity and inclusion goals can complement economic growth objectives. Including diverse groups of entrepreneurs and small business owners in the development of such programs can improve their design.
Including business owners in program design makes sure the right questions are being asked and the right resources are being provided to meet the needs of impacted communities. Panelists emphasized the importance of trust grounded in existing working relationships with community partners. Other techniques successful programs use include:
- asking community partners where funds should be directed
- developing a shared ecosystem analysis
- co-identifying priorities
- engaging the private sector for creative solutions, and
- conducting surveys and market research.
Program designers need more guidance from federal and state government on the development of reporting metrics.
Metrics are a critical piece of the program design process because they help program managers understand how well they are serving their entire business community. Decisions on which metrics to collect are often fall to them. While this approach has advantages, it can be difficult to choose and implement good quality metrics. It often results in inconsistent and ineffective data collection, making it hard to determine which programs are truly effective. Panelists also noted challenges in getting requested data from overworked business owners and reticence to provide detailed demographic data. Having a set of metric standards would be useful for both researchers and policymakers.
The tracking of equity and inclusion metrics should be paired with purposeful program design and feedback loops.
Ongoing analysis of program impact can highlight ways to refine program offerings to better serve businesses. Panelists explained how they used regular surveys, reporting mechanisms, focus groups, feedback on participant experiences, and program metrics to identify program improvements. A consistent finding has been the critical need to streamline and simplify program processes, especially the initial application and follow-up reporting requirements.
To learn more, please see the full report, COVID-19 and Entrepreneurial Firms. Seeding an Inclusive and Equitable Recovery and the accompanying one-pager.
We would like to thank the Kauffman Foundation for its support, especially our co-authors Jessica Looze, PhD, and Jessica Milli, PhD. We are grateful to Andy Reed, International Trade and Incentives Program Manager with Prosper Portland, Katie Johnson, Partner with Next Street, and Tara Palacios, Director, Small Business with Arlington Economic Development for their leadership on inclusive and equitable recovery and for sharing their stories.