On May 27 at 8:30AM, we’ll be virtually celebrating the accomplishments of the state’s small business owners with our annual awards ceremony. This year we are proud to announce this event has been made possible with the generous support of Fifth Third Bank, JP Morgan Chase, Spectrum Reach, the City of Raleigh, and Mike Hamilton Consulting. In this blog CSBDF’s Vice President of Policy and Research Jamie McCall and Director of Development Emily Paranjape give an overview of the importance of small businesses to kick off our celebration.
Starting on the Road to Recovery
Each May, CSBDF celebrates small business month by recognizing entrepreneurs who are changing their community – and the state’s economy – for the better. The COVID-19 pandemic has presented extraordinary challenges for the small business community. We have been inspired at how small business owners and their employees have risen to meet these challenges. To be sure, their resiliency has been tested. Small business revenues in North Carolina are still down 8.6% compared to January 2020, and nearly 1 in 4 small firms are still closed.[i]
But as vaccination campaigns continue, we are beginning to see some signs of recovery. Small businesses are hiring again, and job postings for North Carolina’s small firms is up 4.3% for the week ending April 23, 2021.The road to full recovery will be long though, and over the coming years it will take a great deal of effort to ensure the state’s small businesses thrive. In that spirit there is perhaps no better time to reflect on how small businesses are the engine of North Carolina’s economic growth.
Honoring the Impact of Small Businesses
There is much debate over how to define the “small” in small business, but we generally consider it to include those firms with less than 50 full-time equivalent (FTE) employees.[i] Under this working definition there are 155,731 small businesses in North Carolina employing 944,434 individuals.[ii] In total these entrepreneurial firms contribute over $36.7B in payrolls each year to the state’s economy.
North Carolina’s small business have big economic impacts – but beyond this, it is also important to celebrate their diversity. Research shows places with diverse small business networks are correlated with a variety of positive socioeconomic outcomes. We often talk about jobs, but perhaps more important is the role of small firms in driving a local culture of innovation and promoting high quality social capital networks.[i]
How We’re Helping Small Businesses
As you might imagine, 2020 was a year like no other for CSBDF. We faced overwhelming demand for our services, and we were excited to partner with multiple government agencies to launch 3 low-cost financing programs and 5 emergency cash aid grant initiatives. But grassroots community economic development is a team sport. We have been humbled by the support we received by a variety of corporate, philanthropic, and private sector donors for these programs.
In 2021 CSBDF has built on this momentum to provide continuing assistance. Already this year we’ve hosted our first virtual Black Entrepreneurship Week, produced industry-leading research on the effectiveness of COVID-19 lending to small businesses, achieved GuideStar’s platinum seal of transparency, added multiple free courses to our Digital learning academy, and closed dozens of small business loans.
But there is, of course, much more work to do. In the coming year we will also be hosting events for Hispanic Heritage month in September, expanding our digital offerings to include an online small business needs assessment, and launching new lending products to help entrepreneurs quickly get the capital they need.
Let’s Celebrate North Carolina’s Entrepreneurs
The awards will highlight the accomplishments of several small business owners who have survived and thrived through the pandemic. One example is Manolo Betancur, owner of Manolo’s Bakery in Charlotte, who is the 2021 winner of CSBDF’s Community Activator Award. According to Manolo,
“I don’t have enough words to describe my gratitude for you and CSBDF…it has been a hard year and if it were not for your help many businesses like mine would have closed our doors.”
CSBDF’s awards committee chose Manolo because he and embodies the spirit of innovation and resiliency that is so important to the state’s economy. During the pandemic, Manolo has actively encouraged other Latino entrepreneurs to seek technical assistance (like our free Digital Learning Academy). Manolo’s Bakery is also a cornerstone of the community. For example, in December Manolo worked to purchase and coordinate the distribution of blankets to homeless individuals in Charlotte. We have been inspired by Manolo’s kindness, and we hope his story will help uplift other entrepreneurs who are facing challenges during this time.
We hope you will join us later this month on May 27th to honor the state’s small businesses. The keynote speaker, North Carolina Secretary of Commerce Machelle Sanders, has been a long-time advocate for the state’s small business community. Events like these would not be possible without our sponsors. For the 2021 awards ceremony, we are grateful for the support of Fifth Third Bank, JP Morgan Chase, Spectrum Reach, the City of Raleigh, and Mike Hamilton Consulting.
[i] Data sourced from the Opportunity Insights COVID-19 Economic Tracker for the time period of January 2020 to April 2021.
[ii] The Small Business Administration has an industry-specific definition of small business. These definitions can include firms with up to 1,500 employees and/or $38.5M in annual revenues. We think a smaller threshold is needed. A business with 4 employees is fundamentally different than a business with 1,400 employees.
[iii] Data from the Census Bureau’s 2018 Annual Business Survey, which is the latest data available on this topic that includes both firm size and owner demographics. The survey covers all nonfarm businesses that file 941, 944, or 1120 tax forms.
[iv]Kerry Agnitsch, Jan Flora, and Vern Ryan, “Bonding and Bridging Social Capital: The Interactive Effects on Community Action,” Community Development 37, no. 1 (March 1, 2006): 36–51, https://doi.org/10.1080/15575330609490153; Derya Guler Aydin, Bahar Araz, and Itir Ozer-Imer, “Adventurous and Charismatic Spirits: Entrepreneurs of Veblen and Schumpeter,” Economics Letters 169 (August 1, 2018): 24–26, https://doi.org/10.1016/j.econlet.2018.05.004; Daniel L. Bennett, “Local Economic Freedom and Creative Destruction in America,” Small Business Economics, June 25, 2019, 1–21, https://doi.org/10.1007/s11187-019-00222-0; Thomas Lans, Vincent Blok, and Judith Gulikers, “Show Me Your Network and I’ll Tell You Who You Are: Social Competence and Social Capital of Early-Stage Entrepreneurs,” Entrepreneurship & Regional Development 27, no. 7–8 (August 8, 2015): 458–73, https://doi.org/10.1080/08985626.2015.1070537; John Komlos, “Has Creative Destruction Become More Destructive?,” The B.E. Journal of Economic Analysis & Policy 16, no. 4 (October 1, 2016), https://doi.org/10.1515/bejeap-2016-0179; Benjamin W. Pugsley and Erik Hurst, “What Do Small Businesses Do?,” Papers on Economic Activity (Brookings Institution, 2011), https://www.brookings.edu/bpea-articles/what-do-small-businesses-do/; Nancy Miller, Terry Besser, and Avinash Malshe, “Strategic Networking among Small Businesses in Small US Communities,” International Small Business Journal 25, no. 6 (December 1, 2007): 631–65, https://doi.org/10.1177/0266242607082525.
[v] For confidentiality reasons the Census Bureau’s Annual Business Survey gives ranges for certain data points. This number includes the midpoint (17,000) for the range of Veteran-owned and Hispanic-owned firms with 20 to 49 employees, which the census indicates is between 10,000 and 24,999 jobs.