Guidant Study Finds Profitability and Growth Remain Challenges for MBEs; Re-Commits to Serve MBE Community

Category:
Business Management
Tags:
No items found.

Guidant Financial is a small business financing company that specializes in Small Business Administration (SBA) loans and Rollovers as Business Startups (ROBS). The company has served more than 25,000 entrepreneurs nationwide.

Its commitment to serving minority business owners has been unwavering throughout the years and continues to stand strong. In its recent report on Small Business Entrepreneurs of Color the company states: “Guidant’s commitment to inclusivity and support for underserved communities is more crucial than ever. By continuing to provide resources and advocacy, Guidant aims to play a pivotal role in ensuring that these entrepreneurs not only survive but thrive.”

Guidant surveys small business owners annually to gather detailed information regarding their challenges, successes, and aspirations. In its 2024 Study of Entrepreneurs of Color, Guidant found that profitability and growth remain stubborn challenges for Minority Business Enterprises (MBEs). The study found that recruitment and retention of employees is one of the most serious of these challenges.

Following are excerpts from Guidant’s report of its 2024 Study of Small Business Entrepreneurs of Color.

Profitability and Growth

Profitability remains a challenge amidst inflation and high interest rates; although some businesses have managed to thrive post-COVID, many continue to grapple with achieving profitability as consumer spending lags. Notably, when excluding businesses that have been operational for only two years, only 56 percent are profitable, underscoring the ongoing struggle in this economic climate.”

Despite challenges, 53 percent of businesses are currently reporting profitability. This figure is a testament to the resilience and determination of these entrepreneurs. The remaining 47 percent of businesses are not yet profitable.

Looking ahead to 2024, these entrepreneurs have laid out a variety of plans for growth, reflecting their optimism and strategic focus. Twenty-six percent of business owners plan to increase their staff, indicating confidence in expanding operations and scaling their businesses.

Digital marketing is another significant area of investment, with 18 percent of entrepreneurs aiming to enhance their online presence, which is vital for reaching broader markets in today’s digital-first economy.

Additionally, 17 percent plan to expand or remodel their businesses, while investments in accounting and tax services are a priority for 12 percent of the respondents. Lesser yet strategic investments include traditional marketing (9%), information services technology (7%), payroll services (7%), and technology to support remote work (4%). A small fraction (1%) is looking to outsource services to offshore companies, exploring cost efficiencies and global talent advantages to boost their operational dynamics.

These plans collectively demonstrate a robust initiative toward growth and adaptation despite evolving economic challenges.

Guidant’s commitment to inclusivity and support for underserved communities is more crucial than ever. By continuing to provide resources and advocacy, Guidant aims to play a pivotal role in ensuring that these entrepreneurs not only survive but thrive.

Top Challenges

We’ve identified a series of top challenges that entrepreneurs of color face in their business endeavors, reflecting the hurdles that can impact growth and sustainability. The foremost challenge, cited by 23 percent of respondents, is the lack of capital or cash flow, which underscores the fundamental issue of funding necessary for operations and expansion. Close on its heels, 21 percent of entrepreneurs report struggling with inflation and price increases, which complicate financial planning and operational costs.

Recruiting and retaining staff is another significant challenge, affecting 19 percent of the participants, highlighting the difficulties in building and maintaining a reliable workforce.

Marketing and advertising pose a hurdle for 12 percent, indicating the need for effective strategies to enhance visibility and customer acquisition.

Administrative work and time management are also notable challenges, reported by 10 percent and six percent respectively, reflecting the operational complexities small business owners face.

Additionally, five percent each notes difficulties with supply chain issues and managing or providing benefits, pointing to the operational and employee management challenges in today’s economic landscape.

These challenges collectively depict the multifaceted difficulties entrepreneurs of color navigate as they strive to establish their foothold in various industries.

Recruitment and Retention

Our data reveals varied experiences in the area of recruitment and retention among entrepreneurs of color, highlighting challenges as well as strategies employed to navigate these hurdles.

Regarding hiring difficulty, 11 percent of respondents find it very difficult, while 23 percent consider it somewhat difficult, cumulatively reflecting a significant challenge for nearly a third of the entrepreneurs. However, there’s a slight relief compared to last year, with a nine percent decrease in those who found hiring very to somewhat difficult.

The majority, 31 percent, report no change in the difficulty of hiring, while a minority finds it easier, with 10 percent considering it somewhat easy and five percent very easy.

In response to these recruitment challenges, entrepreneurs have adopted various measures to ease hiring difficulties. The most common strategy, implemented by 27 percent of business owners, is increasing compensation, aiming to attract more candidates and compete effectively in the labor market.

Improving retention efforts for current employees is also a key focus, with 17 percent enhancing practices to keep existing staff engaged and reduce turnover rates. Additionally, 11 percent have expanded their recruitment advertising to cast a wider net, and nine percent have increased employee benefits to bolster their value proposition to potential hires.

Other noteworthy measures include collaborating with educational institutions (8%), expanding training programs (7%), and offering hiring bonuses (6%). The adoption of remote work options and filling hard-to-fill positions with internal employees, both at four percent, also reflect adaptive strategies to address ongoing recruitment and retention challenges.

These efforts demonstrate the proactive steps taken by entrepreneurs of color to ensure they attract and retain the talent necessary to drive their businesses forward in a competitive market.

Associated Photos

View exclusive information when you Join the Network!

JoIN The NETWORK

Join the Fastest Growing Network of Minority and Women Business Owners!

JoIN The NETWORK

There are None Available.