Detroit Regional Chamber > Racial Justice & Economic Equity > Panel of Detroit Women Talk Importance of Diversity, Equity, and Inclusion for Small Businesses, the Detroit Hustle, and Affordable Capital 

Panel of Detroit Women Talk Importance of Diversity, Equity, and Inclusion for Small Businesses, the Detroit Hustle, and Affordable Capital 

November 18, 2021

Key Takeaways:

  • Diversity, equity, and inclusion (DEI) is not a favor. It is a good financial business decision.  
  • DEI requires focusing on the largest and smallest businesses to ensure the business landscape is fully resourced and inclusive. 
  • Government has a responsibility to make sure the economy is equitable and inclusive.  

The Detroit Regional Chamber hosted its second webinar, Diversity, Equity, and Inclusion for Small Businesses, in its 2021-2022 Black- and Diverse-Owned Business Series on Tuesday, Nov. 16, in promotional partnership with Michigan Economic Development Corporation’s Pure Michigan Business Connect.  

The webinar featured a panel of leaders in the Detroit region who discussed the importance of DEI for businesses, particularly small, minority-owned ones. The panel consisted of Chanell Scott Contreras, executive director at ProsperUS Detroit; Portia Roberson, president and chief executive officer at Focus: HOPE; and Kim Rustem, director of the City of Detroit’s Department of Civil Rights, Inclusion, and Opportunity (CRIO).  

The Importance of Diversity, Equity, and Inclusion for Small Businesses

The conversation about DEI for businesses has increased rapidly since summer 2020, following the deaths of George Floyd, Ahmaud Arbery, and Breonna Taylor. Businesses around the U.S. began discussing the importance of DEI, their companies’ initiatives, steps they would take to become more diverse, and more. Largely left out of that conversation were small businesses, many of which were minority-owned. 

“It’s equally as important for small businesses because we want to avoid some of the mistakes that you see when people don’t use people from diverse backgrounds in their inward companies,” Roberson said. “We really try to encourage that you’re looking at the entire community when you are talking about who are going to be your employers and, or how you are going to promote your product to some of the larger entities that might use you.” 

 According to Roberson, businesses are looking at one another to see how diverse they are and how intentional they are with having a diverse workforce. This includes nonprofits, which many people see as inherently diverse. Roberson disagrees with that belief and shared that at Focus: HOPE, they are frequently and intentionally considering who they use for procurement and within their workforce and making sure they are targeting small businesses who are reflective of the community they serve. 

In addition to DEI being essential for maintaining customer support, it is also important for creating equity in the business landscape. If not prioritized, small businesses are more likely to receive fewer opportunities because they do not have the same resources to compete. 

Rustem said the government plays a significant role in the marketplace to ensure it is equitable and small and minority-owned businesses can compete with larger companies. 

“It’s so important for government to be making sure we’re pushing policies that are supportive of Black and Indigenous and people of color-owned businesses. And to do that, there needs to be affordable capital,” Rustem said. “The really big businesses oftentimes have access to a lot more financial tools. Our system is a little bit just kind of set up to better support the bigger businesses. And, unfortunately, due to our past history of discrimination and racism in the country, our smaller businesses tend to be our Black and Indigenous, and people of color businesses because the wealth generation, and the individual wealth, just isn’t there the same way that it was able to be created in some of the white communities.” 

Within the City of Detroit’s CRIO Department, Rustem said they provide opportunities to create that affordable capital for small and minority-owned businesses. 

The first is its Detroit Business Opportunity Program (DBOP), which certifies businesses as a Detroit-Based Business, Detroit-Headquartered Business, Detroit Resident Business, Detroit Small Business, Detroit-Based Micro Business, Detroit Startup, Minority-Owned Business Enterprise, or Woman-Owned Business Enterprise. This program allows smaller companies to compete against larger companies for procurement opportunities in the city by providing them with equalization credits, reducing the advantage larger companies in and out of state have with placing smaller bids. 

In addition to DBOP, CRIO also supports the Detroit Means Business policy team, frequently looks at how they can better support micro-businesses in the city, given most of them in Detroit and around the country are Black-owned, and supports Black-owned banks and other financial institutions that have relationships with Black and diverse-owned businesses.  

ProsperUS Detroit is one of the financial institutions that CRIO supports. It is a community development financial institution (CDFI) that allows businesses in Detroit, Hamtramck, and Highland Park to access affordable resources, including capital.  

 “At ProsperUS, we make loans of just a few hundred dollars, up to $50,000, and other lenders go well beyond that. It’s more of a small business lending because the volume is low in size. We focus on serving entrepreneurs of color in Detroit’s neighborhoods because, just like Kim has shared, having the opportunity to support, launch, and grow a business creates life opportunities, wealth-building opportunities – not just for the entrepreneur but their family, but also the surrounding community,” Scott Contreras said.  

Accessing Capital as a Minority-Owned Small Business

The benefit of using CDFIs like ProsperUS, according to Scott Contreras, is how open and inclusive their processes are. Most have online and paper applications and different avenues of initially engaging with the organization to begin the process of accessing resources. It’s also fairly consistent, with most processes starting with accessing basic information about the business owner and business, then an interview or more detailed conversation to learn more about the business’s needs. 

“What’s interesting about CDFIs is that especially in Detroit because we collaborate and work together, sometimes if that particular organization isn’t the right fit based on whether it be your business type or the size of loan that you’re looking for, we can make a direct referral to another organization so they can continue that conversation, and you’re not just out there with no next step,” Scott Contreras said. “That’s something that we all care a lot about in continuing to make the process really clear for everybody.” 

Beyond starting the conversation about accessing affordable capital, Scott Contreras shared that organizations should also be “creative about providing capital in the form of grants and other mechanisms that can allow people to just get started” with opening or growing their business.  

“When you think about equity and inclusion, we know that not enough Black, Latinx, indigenous, and people of color businesses have access to generational wealth or the level of income required to even get started,” Scott Contreras said. “I think about the people who have that natural entrepreneurial drive and talent who are doing this from their basement, from the back of the car, but haven’t been able to get started because of that initial seed funding that we need.” 

While during the beginning of the pandemic, the government and other organizations offered many grant opportunities, many have now gone away. In place of those opportunities, Roberson encourages small businesses to apply for assistance. Often, a lot of those dollars are left on the table.  

“You’d be surprised how much gets left on the table because people either don’t know about it or just, for whatever reasons, are unsure about whether it applies to them. Or, even I would say some fear about going after those dollars, whether it’s because they’re government dollars and people have maybe a distrust about what it’s ultimately going to mean for their business,” Roberson said. “But I really would say that during this time when so many dollars are being filtered through to states and cities and onto organizations like all of ours, really look for those opportunities where you can get some of the assistance, some of the relief that’s out there. And don’t be afraid to ask the questions about whether this relief applies to you. Even if it doesn’t, there’s a lot of times when you can also offer other opportunities that would be available for them.” 

Scott Contreras cautioned that seed funding like this is only a steppingstone. The business owners and lenders need to develop a long-term relationship to continue to find the right resources for the different moments as the business grows.   

Diversity, Equity, and Inclusion Policies

With government backing, the capacity of CDFIs, Black banks, and other financial institutions that have relationships with minority-owned businesses to provide affordable capital will only grow. A few policies Rustem suggested to ensure this capacity growth occurs include guaranteeing loans for businesses, 0% interest loans, and supporting the different types of services small businesses need, such as legal services, business plan development, and accounting. 

One thing we recently did at CRIO was we paid for all small businesses, or businesses that are interested in getting part of the marijuana industry, we actually gave everybody their own personal business coach to actually develop out a business plan, understanding that people need support with developing out a business plan. There’s a lot that goes into it in terms of accounting and legal services,” Rustem said. “So how can government do more of that? By paying for those types of services for small businesses.”  

In addition to the policies to benefit all small and minority-owned businesses, Rustem made a specific call out for women-owned companies about how the government should subsidize child care to help more women get into the marketplace.   

But no matter what policies are in place to help diverse-owned or women-owned small businesses start and grow, Scott Contreras said Detroiters would make it happen anyway. 

 “The business owners are out there, whether formally or informally, making it happen every day. We all know about the Detroit hustle, the grit that we have. People have been doing this forever,” Scott Contreras said. “It’s the job of organizations like mine and other business support organizations and lenders to figure out where we are creating unnecessary barriers.”   

One way she suggests doing that is by evaluating the makeup of each organization. Does the staff represent the community? 

“If we want to serve Black, Indigenous, and people of color-owned businesses, then we need to have cultural competency. We need to value the things that the community values. We need to understand the characteristics of entrepreneurship from the same lens that the community does. And we can’t do that if we don’t understand the culture and understand entrepreneurship as the community does,” Scott Contreras said. 

Thank you to the event sponsor, Blue Cross Blue Shield of Michigan.