The Other Digital Divide: How Tech Can Accelerate Small Business Growth
Written by Melissa Pierre Kelly with Leigh-Ann Buchanan
Philomae is a Black entrepreneur from Overtown. As a business owner who was born during the throws of the Civil Rights movement, she has a well developed ability to navigate new and changing environments. Yet, the proliferation of the digital economy and equally fast-paced technological advances have pushed her business even further behind.
The Other Digital Divide
According to the Federal Reserve Bank, 58% of Black business owners report their businesses as “at risk” or “distressed” compared to only 27% of white business owners. These racial disparities in business resilience are also attributable to technology access gaps.
Businesses that do not have a digital presence, or lack the resources to maintain one, specifically, struggle to stay afloat due to unequal access and capacity to leverage e-commerce or digital platforms to optimize their business operations.
Indeed, research on small and midsize businesses performance revealed that more than 60% lacked the business data and management skill sets to support their digital transformation needs.
No Small Business Left Behind?
Nationally, minority business enterprises (MBEs) accounted for more than 50% of new firms created, generating annual sales of nearly $700 billion and creating 4.7 million jobs over the last 10 years.
Yet the pandemic disproportionately affected BIPOC entrepreneurs like Philomae. During this period, 41% of Black owned businesses have closed permanently compared to 17% of white owned businesses. Further, in the first round of federal Paycheck Protection Program (PPP), only 12% of Black and Latinx owned businesses who sought assistance were funded, a percentage that has only improved slightly in subsequent rounds.
For Philomae, the global pandemic ushered in a season of year-over-year losses and steeply declining revenues. Much like the many businesses which still operate almost 100% in analog, she attributes her business downturn to its archaic operational systems.
Until recently, Philomae managed her company’s financial records by organizing paper receipts. Her fax machine served as the primary mode of business marketing. Philomae is one of many small business owners that have been left behind as the 21st century technology and digital transformation trends fundamentally shift the way we think, operate and grow our businesses.
More Than Tech Tools
Over the past year, one of Opportunity Connect’s Digital Pathways coaches has supported Philomae in transitioning her accounting systems to a cloud-based financial management software and integrated digital payment and POS systems. With these small changes, she was able to unlock critical PPP federal relief funding through the Payroll Protection Program which allowed her to retain five staff members.
Adopting new technology was not the only factor in Pilomae’s company turnaround. In her case, it was the combination of a customized tech enablement assessment, personalized technology integration support as well as digital leadership training. To date, Opportunity Connect’s work has focused on Overtown, supporting over 65 founders in collaboration with 44 support organizations resulting in over 1,000 hours of free or subsidized 1:1 business growth consulting.
Clear Pathways To Digital Transformation
To guarantee small businesses full participation in the digital economy will require clear pathways of support to facilitate digital transformation. These small but impactful interventions might include integrating operational efficiency platforms (appointment management, Google calendar, or project management software), increased online presence (website, digital marketing and social media strategy) as well as digital leadership training.
We are experiencing a unique moment in #MiamiTech. It presents us with a special opportunity to bring traditional small business technical assistance into the 21st century. Community investments that make digital transformation resources more accessible are key to sustaining small businesses in the 305. Tech Equity Miami designated projects like Digital Pathways , Miami-Dade County’s Strive305, Rebrand Cities and BizHack’s Digital Marketer’s Edge program all provide underserved entrepreneurs with the training and tech stack necessary to transition from analog to digital with ease. We invite you to learn more about how these efforts are accelerating small business resilience and growth.
Editor’s Note: This is the third in a series of blogs in partnership with Tech Equity Miami that will explore tech equity in Miami over the next few weeks. To learn more, visit: www.techequitymiami.org.
