From Startup to Scale-Up: Enabling Ethnic Minority Business Growth Journeys

This blog focuses on focuses on the need for more comprehensive, intensive and bespoke support for ethnic minority businesses (EMBs). It is the third of 10 recommendations in the Centre for Research in Ethnic Minority Entrepreneurship’s (CREME) report? ‘Time to Change: A Blueprint for Advancing the UK’s Ethnic Minority Businesses’. The report is the most comprehensive of its kind. It sets out ten evidence-based recommendations for advancing the growth potential of ethnic minority businesses (EMBs), including increasing their GVA contribution from the current ￡25 billion a year to ￡100 billion. The CREME team will be working with partners to implement the report in the next three years.

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"I know so many talented entrepreneurs from our community, but they don’t know where to go to really grow their businesses."

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This sentiment from an influential Black business leader identifies a key challenge: Ethnic minority entrepreneurs start ventures at twice the rate of white counterparts. But they face twice the obstacles scaling up.

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Many ethnic minority entrepreneurs have great business ideas and launch plans. But where can they find the robust support to achieve growth? Who can they trust for honest, relevant advice? How do they access mentors, networks and opportunities to boost their businesses?

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These are everyday struggles for many EMBs. While dynamic and ambitious, EMBs face barriers to expansion, including access to funding, discrimination, and exclusion from mainstream assistance.

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One critical success factor for EMBs is tailored, high-quality support that understands their needs and empowers their growth. Support that respects their identity and culture. Support that helps them overcome specific obstacles.

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Unfortunately, this support often eludes EMBs. Persistent "support gaps" result from:

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• Funding cuts: The austerity measures following the 2008 financial crisis have reduced the availability and quality of public sector support for EMBs. Many specialist providers have closed down or scaled back their services due to lack of resources.
• Issues of trust: EMBs often have low levels of trust in mainstream support providers, due to negative experiences or perceptions of bias, discrimination, or irrelevance. They may prefer to rely on informal sources of support, such as family, friends, or community networks, which may not have the expertise or connections to help them grow.
• Provider blindspots: Many mainstream support providers lack awareness or understanding of the diversity and complexity of EMBs. They may adopt a “one size fits all” approach that fails to address the specific needs and preferences of different ethnic groups. They may also lack diversity and representation among their staff, mentors, and partners.

These reasons create a vicious cycle that prevents EMBs from accessing and benefiting from quality support. This cycle limits their potential to grow and prosper, and also deprives the UK economy of a valuable source of innovation and productivity.

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But solutions exist to bridge support gaps, as outlined in the CREME “Time to Change” report. A key recommendation is co-designing local initiatives with EMBs themselves to deliver relevant, responsive assistance. This entails:

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- Engaging EMBs at all stages, from assessing needs to evaluating outcomes.

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- Adopting flexible approaches attuned to EMB diversity.

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- Building trust and rapport through cultural competence.

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- Leveraging EMB strengths like resilience and creativity.

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By collaborating with EMBs, support providers can nurture inclusive ecosystems that empower entrepreneurs to thrive. CREME has a long tradition of ‘academic activism’ involving the creation of new initiatives co-produced with EMBs. This has resulted in innovative initiatives to promote supply chain diversity, inclusive business support ecosystems and refugee integration. It’s refreshing to see the banking sector promoting long-term initiatives to facilitate the growth of ethnic minority entrepreneurs.

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The returns can be impressive: more jobs, stronger communities, an economy energised by minority innovators. The time to bridge support gaps is now.

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Monder Ram

Director, Centre for Research in Ethnic Minority Entrepreneurship

Aston University

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