Nonprofit, nonpartisan journalism. Supported by readers.

MinnPost’s Good Jobs beat is made possible by a grant from MSPWin, a philanthropic collaborative committed to strengthening the workforce in the Twin Cities metro area. MSPWin plays no role in determining the content of the coverage.

One way to boost minority incomes and employment: support entrepreneurs of color

Programs to help entrepreneurs of color can play a big role in bridging the employment and income disparities that exist between black and white Americans in Minnesota.

Jeannette Nevilles: “Without Meda, doing this business would have been tough. The banks wouldn’t have given me money because they wouldn’t have thought I was ready."
Gramsky’s Sandwiches Facebook page

Before Jeannette Nevilles opened Gramsky’s Sandwiches in Brooklyn Park this summer, she was preoccupied with a fear of failing. 

That’s because she’d watched numerous minority-owned business startups come and go for years — and she didn’t want to end up becoming another one of them.  “I was nervous,” said Nevilles, who’s both the owner and chef of the restaurant. “I was really, really nervous. I did not know what was to happen.” 

These days, though, Nevilles is not only shaking off the uncertainty, she’s grown confident that her business is on the right path to sustainability.

That is at least partly due to the Metropolitan Economic Development Association (Meda), which has provided Nevilles with critical help in getting her business up and running. “Without Meda, doing this business would have been tough,” she noted. “The banks wouldn’t have given me money because they wouldn’t have thought I was ready. They just wouldn’t have done it.”

Article continues after advertisement

Nevilles is just one of latest entrepreneurs of color in Minnesota whom the Minneapolis-based Meda has tried to help, though. This year alone, Meda has worked with over 550 small businesses across Minnesota, where the average hourly wage of employees with companies receiving loan funds from Meda is over $23. 

While the organization supports startup businesses, CEO Gary Cunningham noted, it actually focuses on already-established businesses with greater potential to expand its services and employees. They do so by providing services that are particularly helpful to entrepreneurs of color — from funding to business consulting to helping minority-owned businesses navigate the process of obtaining government contracts.

Gary Cunningham
Gary Cunningham

Such efforts help the economy, of course, but they are also play a big role in bridging the employment and income disparities that exist between black and white Americans in Minnesota: Jobs created by small business entrepreneurs of color provide employment opportunities for minority communities. “Our data over 20 years of doing analysis on minority businesses, show that our customers employ people of color at a rate of about 50 percent of their workforce,” said Cunningham. “So, people of color are hiring more people of color than anyone else who’s hiring them.” 

It also has a role to play in combatting income disparities. The gap between white entrepreneurs and those of color is also far less dramatic than the gap between the incomes of black and white American workers (even when those workers have the same college credentials and work experience), according to a 2014 study by William Bradford, a professor at the University of Washington in Seattle. “Black entrepreneurs have higher wealth levels and more upward wealth mobility than do Black workers,” Bradford wrote in the report. “The upward wealth mobility of Black entrepreneurs is equivalent to that of White entrepreneurs, while the wealth mobility of White entrepreneurs is greater than that of White workers.” 

In other words, says Cunningham: “If you’re an entrepreneur, you have a much higher chance of increasing your income. So, this is the one area that really can start changing some of the dynamic that we see.” 

Challenges facing minority entrepreneurs 

Nevilles, the owner of Gramsky’s Sandwiches, needed money and a credit line to open her restaurant. But she also needed management skills to sustain it. Like many entrepreneurs, she had the ideas and energy to drive a new business, but didn’t have extensive training in the more technical aspects of the business world. 

That’s where Meda came in. “I call Meda for anything that I need help with,” she said. “They operate like my advisors. If I need legal assistance, for example, they give me that.” 

In addition to its current programs, Meda will soon have a new service available for its participants: formal training in areas like finance or supply chain management. “We’ll be coming up with an online platform where people can actually go in and take a class on finance, from zero to graduate level,” Cunningham said. “Or they will take a course out of a business supply chain to understand what the supply chain is and how it works in business.” 

He added: “The idea is for people to get educated, have a good understanding of the equity capital and how hiring people works as well as the HR rules and regulations they need to have in place.”