Diversity Owned Small Businesses Set to Thrive in 2023

Diversity Owned Small Businesses Set to Thrive in 2023

Small business owners in the US have expressed confidence in their 2023 success. Two-thirds anticipate revenue increases, and over half are preparing to expand their business this year. The economic outlook is more optimistic than when small business owners were surveyed last spring. 71 percent of women small business owners said that they feel able to handle a recession.

Momentum and Growth

“In fact, 63% of our women business owners are telling us that they expect revenues to increase over the course of the next 12 months. And that includes our minority business owners,” said Carol Lee Mitchell, senior vice president of Bank of America.

This anticipated success is building upon a much longer positive momentum trend. According to reports from JP Morgan, Black women own nearly 2.7 million businesses across the United States. This makes them the fastest-growing group of entrepreneurs nationwide. Between 2014 and 2019, businesses owned by Black women grew 50%, which is the highest growth rate of any female demographic.

Inflation Response

Obviously, business owners will continue to monitor the impact of inflation, supply chain issues and labor shortages and are actively mitigating these impacts. 88% say inflation is currently impacting their business which is the same response as the spring of 2022. Business owners are mostly raising prices (57%), reevaluating cashflow and spending (41%), and reducing business costs (33%) to offset the current trends.

Business owners have raised their prices by over 9% on average. In response to labor shortages, 49% of business owners are themselves working more hours and 31% are raising wages offered to staff.

Recession-Proofing Investment

One secret to thriving through tough business conditions is to establish closer community ties. According to Bank of America’s 2022 Women and Minority Business Owner Spotlight 87% of Black business owners say they are committed to driving social change through their business. And because of that commitment, 34% of Black business owners say their customer base has increased and 47% of women small business owners plan anticipate 2023 business expansion. Black business owners with pledges to social causes and community feel this commitment has resulted in:

  • Increased sales (61%)
  • Deepened ties to the community (40%)
  • Increase customer base (34%)

Surveys also indicate that 88% of Hispanic-Latino business owners actively give back to their communities through:

  • Donating products or services (54%)
  • Volunteering (46%)
  • Sponsoring local events and teams (36%)
  • Sourcing local supplies (33%)

It’s clear that establishing tight community connections can help a business thrive even in uncertain economic conditions. A strategic sourcing approach that incorporates diverse suppliers and community-related programs that align to corporate mission are a proven means of driving growth no matter what 2023 brings.

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