NEVADA Minority Business Enterprise Study Report (2022)

N E V A D A MINORITY BUSINESS ENTERPRISE STUDY REPORT 2 0 2 2

N E V A D A

2 0 2 2

N E V A D A MINORITY BUSINESS ENTERPRISE STUDY REPORT 2 0 2 2 P R E S E N T E D

B Y

Arizona Hispanic Chamber of Commerce Foundation F U N D E D

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U.S. Department of Commerce Minority Business Development Agency Coronavirus Response and Relief Fund R E S E A R C H

C O N D U C T E D

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WestGroup Research MINORITY BUSINESS ENTERPRISE REPORT

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ACKNOWLEDGMENTS E N D O R S I N G

O R G A N I Z A T I O N S

A r i z o n a H i s pa n i c Cha m b e r o f C o m m e r c e FOUND ATION

R E S E A R C H

T E A M

G l e n n I wata Wes t Group Rese arch

K at y G a l l e r t Wes t Group Rese arch

Monica S. Vil l al obos A r i z o n a H i s pa n i c Cha m b e r o f C o m m e r c e

C ata l i n a P e r e z A r i z o n a H i s pa n i c Cha m b e r o f C o m m e r c e

Ceril a Gail liard O r c h e s t r at i n g Y o u r S u c c e s s

K a a r e n - Ly n G r av e s A I A NN H * P r o j e c t N A BEDC

P R O D U C T I O N

T E A M

Carmen G. Martinez A r i z o n a H i s pa n i c Cha m b e r o f C o m m e r c e *AMERICAN INDIAN, ALASKA NATIVE, & NATIVE HAWAIIAN (AIANNH)

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TABLE OF CONTENTS ACKNOWLEDGEMENTS

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STUDY HIGHLIGHTS

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CONCLUSIONS

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STUDY OVERVIEW

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STUDY FINDINGS

11 Challenges/Strategies – COVID Pandemic

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BUSINESS PROFILE – Sierra Winds Products for Leisure, Owner: Dick Olivas

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SECTION II.

Challenges/Strategies – Minority Business Enterprises

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SECTION III.

Access to Capital

35

SECTION IV.

Role Models/Resources

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SECTION V.

Business Characteristics

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SECTION VI.

Owner Characteristics

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SECTION I.

SECTION VII. Rural and Economically Distressed Areas

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SECTION VIII. Indigenous Community/Remote Tribal Communities

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STUDY BACKGROUND AND METHODOLOGY

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END NOTES

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NOTE: INDIGENOUS AREAS INCLUDE RURAL AND/OR ECONOMICALLY DISTRESSED AREAS

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STUDY HIGHLIGHTS The Arizona Hispanic Chamber of Commerce designed this study to be a resource for businesses, organizations, educators, government agencies and individuals who want Minority Business Enterprises (MBEs) to succeed. This was funded by U.S. Department of Commerce, Minority Business Development Agency, Coronavirus Response and Relief Fund to assist with the following: a) identifying potential policy topics for MBDA to champion, b) comprehensive data collection which could be used in future MBE studies, c) information analysis on minority business enterprises, and d) information programming for business organizations. The MBE Study focused on providing insights regarding the challenges businesses faced during the pandemic and the strategies they used to overcome them. Other topics include challenges and strategies of being an MBE as well as gaining access to capital. Comparisons were also made with businesses located in Historically Underutilized Business Zones (“HUBZones”), (1) and businesses operating in Indigenous Communities.

A total of 657 telephone interviews were conducted with Nevada businesses from February 15 through March 30, 2022. This was broken down into 288 MBEs and 347 non-MBEs (22 were not identified). Specific targets included economically disadvantaged businesses, especially those operating in rural areas (HUBZone locations – 187 interviews) minority businesses in general, comparison with non-minority-owned businesses, and businesses in Indigenous Communities (23 interviews).

The businesses represent a range of industries, company sizes and locations throughout the state.

SURVIVING AND RECOVERING – The storylines that surfaced in this study represent businesses that

made it through the pandemic up to this point. While an estimated one-third of businesses nationwide shutdown(2) from March 2020 to approximately March 2022 during the pandemic, those surveyed for this study provide a picture of those who survived (or reopened during) the pandemic and have recovered/are in the process of recovering.

It is also important to note that the pandemic is still not considered “over” at the time of this writing so the challenges, solutions, and insights covered in this report are based on this continually evolving story.

MBE CHALLENGES DURING THE PANDEMIC – Most MBEs surveyed faced at least some type of

challenge during the pandemic. The following were among the top three challenges facing Nevada MBEs (and non-MBEs) during the pandemic that followed a progression of how the pandemic affected businesses.

DECREASED SALES/LOSING CUSTOMERS – Mentioned by 24% of MBEs top-of-mind – The most often mentioned challenge by Nevada MBEs was a financial hit caused by the economic shutdowns at the start of the pandemic. Most of those who participated in the survey were in some level of recovery by the time of the survey.

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STUDY HIGHLIGHTS

WORKFORCE ADJUSTMENTS – Mentioned by 20% of MBEs top-of-mind – While many of the businesses had layoffs during the initial stages of the pandemic, the next step involved restarting their businesses or recovering from the initial shutdowns, which meant re-staffing or trying to “get back to normal.” Early retirements, fears of COVID exposure, and redistribution of the workforce (e.g., taking new jobs) were among the factors making it difficult to find the workers needed to conduct business.

SUPPLY CHAIN PROBLEMS – Mentioned by 13% of MBEs top-of-mind – The public’s initial pandemic concerns resulted in supply chain issues at the consumer level (e.g., toilet paper shortages). Two years later, businesses experienced broader supply chain issues that continue to affect operations and revenue.

An article from Duke University highlighted some of the causes of the supply chain shortages: It appears that three major issues have contributed most to the (supply chain) chaos: COVID creating a shortage of workers that has reduced production capacity around the world, distortions to typical demand due to changes in customer purchasing behavior, and the fact that manufacturing and logistics systems are often run at or near their maximum capacity. (3) ACCESS TO CAPITAL – Mentioned by 9% of MBEs top-of-mind – In Nevada, access to capital surfaced as the main difference between MBEs and non-MBEs.

PANDEMIC STRATEGIES – In the two years since the start of the pandemic, MBEs (as well as non-MBEs) top strategies fell into the following three categories and followed a natural progression.

REDUCING THE DAMAGE – Mentioned by 8% who said “remote workforce,” 8% “changed operations,” 7% “changed hiring practices” of MBEs top-of-mind. During the initial pandemic shutdowns, MBE businesses mentioned having to close their operations (often due to the government mandates), cut staff, and reduce operational expenses. Operational changes were considered “low hanging fruit” decisions, especially with the uncertainty of the length of the pandemic, and were typically the first solutions that were implemented.

SEEKING HELP/APPLIED FOR LOANS – Mentioned by 12% of MBEs top-of-mind --As expenses mounted, businesses began to apply for the government loans that were made available. Almost half the MBEs surveyed applied and received some government assistance (e.g., Paycheck Protection Program and Economic Injury Disaster Loans). While most MBEs are self-funded without much reliance on commercial, government or private funding, the PPP and EIDL were part of the strategies tried during this phase.

INCREASING MARKETING EFFORTS – Mentioned by 17% of MBEs top-of-mind --As the pandemic continued, MBEs needed to identify new revenue sources to make up for the lost

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STUDY HIGHLIGHTS

customers. The top pandemic strategy mentioned involved changes to marketing efforts. A wide-range of solutions were mentioned including starting new lines of businesses, increasing advertising, targeting new customer markets, expanding social media efforts, networking, and promoting MBE status.

MINORITY BUSINESS CHALLENGES/STRATEGIES NEGATIVE PERCEPTIONS – Despite the overwhelming impact of the pandemic on their businesses, these owners were also aware of negative repercussions associated with being an MBE. Almost half (46%) felt they had to overcome negative perceptions of being a minority-owned business. One-third felt cultural differences had an impact on their business and the same percentage felt they were treated differently because they are minority owned.

ADDRESSING MINORITY CHALLENGES – The main strategies used to address the negative impacts of being a minority-owned business involved increasing their visibility through various marketing efforts. Most network with other MBEs (72%).

More than half (59%) promote the fact they are an MBE, and half (51%) use their minority status to pursue business opportunities.

ACCESS TO CAPITAL When asked specifically (aided questions), access to capital was one of the top themes that preceded the pandemic and continues to affect these businesses during the recovery.

CREDIT SOURCE – Most MBEs currently fund their business internally – either through the profits/revenue of the business (41%) and/or from owners’ own personal savings/ credit (35%).

MBE VS. NON-MBE DIFFERENCES

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o

Self-funding – Significantly more MBEs self-fund their business than non-MBEs (e.g., personal loans to the business, from their own retirement fund)

o

Greater challenge – More than half (57%) of MBEs said gaining access to capital was at least somewhat of a challenge (compared to 29% of non-MBEs).

o

Treated with respect – A total of 23% disagreed with the statement that they were “treated with respect when applying for a business loan.”

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STUDY HIGHLIGHTS

BUSINESS CHARACTERISTICS The following are some of the characteristics of an MBE during 2022.

Median revenue was $156,000 in 2021 ($375,000 for non-MBEs) Median staff size is 3 employees. (5 for non-MBEs) Median age of the business is 6 years old (18 years for non-MBEs) The size and age differences between MBEs and non-MBEs appeared to significantly affect the businesses’ ability to handle the pandemic – i.e., MBEs not having the resources and experience.

OWNER CHARACTERISTICS The following is a profile of the MBE owners: Average age of the owner is 48 years old (56 for non-MBEs).

Education: o College graduate – 62% (63% for non-MBEs) Owner’s median annual income in 2021 o $90,476 ($113,157 for non-MBEs)

RURAL AND ECONOMICALLY DISTRESSED AREAS One of the key research objectives was to survey businesses in rural and economically distressed areas as defined by their location via “HUBZones.” The Small Business Administration defines HUBZones as “... small business in historically underutilized business zones.” (1) HUBZone businesses throughout the state were surveyed for this study. HUBZone and non-HUBZone businesses were compared for this analysis.

PANDEMIC CHALLENGES Challenges during the pandemic were not significantly different between businesses in HUBZones and those non-HUBZone businesses. The top three challenges, loss of sales, keeping employees and supply chain issues were the same for HUBZone, MBE HUBZone and non-HUBZone businesses.

Safety – The main significant differences between these groups was that HUBZone businesses were more likely to be challenged with keeping employees and customers safe from the virus.

More aggressive response – When asked what they would have done different, MBEs in HUBZones were more likely to have tried some strategy (i.e., any of those listed) mentioned by 52% compared to those not in a HUBZone (32%).

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STUDY HIGHLIGHTS

Access to capital – HUBZone MBEs were more likely to feel that gaining access to capital was a significant challenge (44%) than the other groups (24% HUBZone overall to 24% Non-HUBZone).

BUSINESS/OWNER PROFILE DIFFERENCES Business Characteristics – HUBZone businesses MBEs were almost half the median revenue size ($136,363 in 2021 revenue) of non-HUBZone businesses ($248,000 in 2021 revenue).

Owner Characteristics – HUBZone MBE business owners made less income ($75,000), than non-HUBZone companies ($100,345) comparing 2021 annual salaries.

INDIGENOUS COMMUNITY/REMOTE TRIBAL COMMUNITIES WestGroup completing 23 interviews with businesses in Indigenous Communities/Remote Tribal Communities in Nevada (targeted completing at least 50). While there were very few differences when comparing these businesses with other MBEs or non-MBEs, a few themes surfaced.

PANDEMIC CHALLENGES/STRATEGIES Supply chain shortages (5 of 23) Decreasing sales/loss of business (4 of 23) Staying in touch with employees/customers (3 of 23) Being forced to shut down due to the pandemic (3 of 23) Their top strategies to survive/get through the pandemic were: Changed their marketing efforts (5 of 23) Changed their operations (4 of 23) Followed CDC guidelines (4 of 23)

ACCESS TO CAPITAL Gaining access to capital among Tribal Community MBEs is clearly a significant challenge (48%).

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CONCLUSIONS 1. MBEs faced greater challenges during the pandemic and had to be more aggressive in trying to address these challenges than non-MBEs. Contributing to this was that MBEs were generally smaller and did not appear to have the financial resources and experience that non-MBEs had in order to handle the pandemic challenges.

2. The pandemic continues to challenge Nevada MBEs with workforce shortages and supply chain delays. Even at the time of this report, concerns about COVID variants appear to be far from over which makes determining next steps more difficult for these businesses.

3. Finding access to capital was one of the major differences that MBEs faced at a significantly higher level than non-MBEs. These concerns occurred at two levels – Availability of funds and support in the loan application process. A review of survey comments highlighted a number of owners who have been frustrated with trying to find loans for MBEs. In addition, the difficulty with the loan application process has limited businesses the opportunity to expand. Education and availability are key to helping these MBEs now and in the future.

4. Businesses operating in rural/economically distressed areas businesses as well as those in Indigenous Communities have typically experienced greater needs during the pandemic (lost business, workforce issues, and supply chain problems) and have had to be more aggressive to overcome these obstacles compared to non HUBZone areas. They also had greater concerns/ limitations from lack of capital options.

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STUDY OVERVIEW The Arizona Hispanic Chamber of Commerce and Arizona Minority Business Center have been conducting research with minority-owned businesses for the past 17 years. This is the first year that the study has expanded from Arizona to include other states. This report is a summary of the findings from the Nevada study.

The focus of the research has been to provide insights into the needs and opportunities of minority business enterprises as a resource to a wide range of audiences including government officials, and analysts; business and community leaders; and educators.

For perspective, the U.S. Census records prior to the pandemic estimated the following in 2018: Nevada had 97,000 minority-owned businesses, which represents the total number of firms with or without paid employees. (A total of 9,612 minority-owned businesses had paid employees.)(4) Minority-owned firms represented 36% of all Nevada businesses.(4) The 2022 Nevada study focused on the following topics: Impact of the COVID-19 pandemic on minority businesses.

Impact of being minority-owned businesses.

Strategies minority businesses have taken to address these challenges.

Comparisons of these challenges and strategies of businesses in rural/economically distressed areas.

Comparisons of these challenges and strategies of businesses in Indigenous Communities.

Research conducted by WestGroup Research throughout the pandemic has highlighted that the impact and adjustments made by all businesses (as well as individuals/households) have been a moving target since March 2020. The uniqueness of the pandemic’s challenges has resulted in a continual series of pivots being made by minority businesses in order to adapt to the changes in the marketplace. Government-mandated business shutdowns, medical/mask requirements, work-from-home adjustments, school shutdowns/impact on workforce, rapidly changing employment opportunities, quickly rising labor costs, and now record levels of inflation have affected all businesses, but especially minority business enterprises.

The purpose of this study is to help focus how to address the overall and specific needs of minority-owned businesses.

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STUDY FINDINGS SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC Minority Business Enterprises provided a top-of-mind perspective of their biggest challenges during the pandemic and what strategies they used to address them. It is important to note that the input from companies/organizations in this study represent those that stayed in business throughout the two years since the start of the pandemic. There were 28 out of 288 minority owned businesses that started during the pandemic, but most of the companies were in business since before 2020.

A. Challenges – What types of challenges have minority business enterprises (MBEs) faced during the COVID pandemic and how have they addressed them?

The biggest challenges that both MBEs and non-MBEs faced during the pandemic were o

Decrease in sales/Lost businesses – One-quarter (24%) specifically mentioned facing significant decreases in sales during the pandemic. It was clear that some businesses had started recovering to pre-pandemic sales levels by the time of this survey in 2022.

o

Keeping employees – Mentioned by 20% of the MBEs, the availability of the workforce began to surface as a major challenge when companies began to reopen after the mandated shutdowns. This continues to have a significant impact on businesses trying to recover.

o

Supply/inventory shortages – Mentioned by 13% of MBEs top-of-mind, supply chain issues represented a third phase of challenges affecting business during the pandemic.

Companies expressed a wide-range of concerns related to the inability to restock inventory, waiting on raw materials for building/manufacturing processes, or cutting back available services/products for retail and/or wholesalers.

o

Access to capital – Mentioned by 9% of MBEs. The single biggest issue differentiating Nevada MBEs and non-minority businesses is concerns about having access to capital.

Reviewing top-of-mind responses, more MBEs mentioned this as a top pandemic issue compared to non-MBEs (1%).

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STUDY FINDINGS

SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC

CHALLENGES DURING PANDEMIC Chart 1 Challenges During Pandemic Minority vs. Non-Minority MINORITY VS. NON-MINORITY

24% 21% 20% 24%

DECR EAS E I N SA L ES / LOSS O F B US I N E SS K EEP I N G E M P LOYE E S

13% 12% 9%

S UPPLY S H ORTAGES / D EC REAS ED I N V E N TO RY ACC ESS TO C A P I TA L

1% 8% 6% 8% 10% 8% 9% 8% 11% 6% 4% 5% 5% 2% 2%

KEEPIN G EM P LOY EES F R C ATC H I N G V I RU S COM MU N I C AT I N G WI T H CUSTO MERS / EM P LOY EES D U RI N G Q UA RA N T I N E S H U T T I N G D OW N D U R I N G COV I D N O P ROB L EMS /C H A LLE N G E S I N F LAT I ON /R I S I N G COSTS CHANG ES I N GOVERN MEN T R EG ULAT I O N S EM P LOY EES WORK I N G FR O M H O M E 0%

MBE S

20%

Non-Minority

CIRCLED IN BLACK – SIGNIFICANTLY DIFFERENT AT 95% CONFIDENCE LEVEL BETWEEN MBEs AND NON-MBEs NOTE: OTHER INDIVIDUAL COMMENTS MADE BY 3% OR LESS NOT LISTED

Significantly different at 95% confidence level between MBEs and non-MBEs dual comments made by 3% or less not listed

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40%

STUDY FINDINGS

SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC Survivor’s perspective – It is important to note that participants in this study were all businesses who had made it through the pandemic. Businesses who closed down during the pandemic would most likely provide a different perspective.

B. Strategies – NOTE: These are unaided top-of-mind recall of strategies companies tried. Aided recall would have had higher percentages, but these focus on the strategies that most stood out in the business owner’s mind they tried during COVID. MBEs tried numerous strategies over the past few years with the top seven being: 1. Changed marketing strategies (17%) – The top strategy focused on recovering the lost revenue streams by increasing advertising/contacting potential customers via emails, social media, website, phone calls, networking, and events, as well as starting new lines of business (e.g., curbside pickup for restaurants).

2. Did nothing (12%) – Those who said they “did nothing” was mentioned throughout the

study. “Nothing” takes on a wide range of meaning to these businesses. Some businesses were not negatively affected or actually thrived during the pandemic and did not need to make changes. Some businesses took a wait and see approach. Others tried unsuccessfully to make changes.

3. Applying for loans (12%) – MBEs were significantly more likely to apply for loans than nonMBEs (5%) in order to get through the pandemic.

4. Following the CDC guidelines (8%) – This strategy focused at two levels – 1. Keeping

employees healthy and 2. Providing assurances to customers about the safety of the products, services, and locations. Non-MBEs tended to use this strategy more (16%) than MBEs.

5. Changed operations (8%) – These changes included, shortened hours, added technology,

more outsourcing, and changed inventory practices. When analyzing the data, changes to hiring practices and switching to remote working force (see below), were also considered operational changes.

6. Remote workforce (8%) – Some businesses were able to move their workforce from the office to their homes in order to stay productive while reducing employees’ exposure to COVID.

7. Changed hiring practices (7%) – Hiring practices changed as the labor pool began to shrink – e.g., expanded efforts to find more employees, Non-MBEs used this strategy more (12%) than MBEs.

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STUDY FINDINGS

SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC

STRATEGIES/SOLUTIONS TO CHALLENGES DURING PANDEMIC MINORITY VS. NON-MINORITY

Strategies/Solutions to Challenges During Pandemic Minority vs. Non-Minority

CHA N G ED MARKE TING STRATEG I E S DID NOTHI N G

9%

APPLIE D FOR LOAN S

5%

FOLLOW E D CDC GU IDE LI N E S , MAS KS , VACC I N E S

12%

8%

8% 10% 8% 8% 7% 12% 7% 7% 6%

SWITCH ED TO RE MOTE WO RK FO R C E CH ANGE D OPE RAT I O N S CH ANGE D S TAFF I N G / H IRING PRACT I C E S CH ANGE D ATTITU D E S PE RS ISTE NCE , POS ITI VI TY WORKE D H AR D E R

PAID E MPLOYE E S M O R E NE W RE VE NU E SOU R C E S CHA NGE D STRATEGIE S , SOUG H T H E LP, ADVI C E 0%

10%

Non-Minority

CIRCLED IN BLACK – SIGNIFICANTLY DIFFERENT AT 95% CONFIDENCE LEVEL BETWEEN MBEs AND NON-MBEs NOTE: OTHER INDIVIDUAL COMMENTS MADE BY 3% OR LESS NOT LISTED

ack - Significantly different at 95% confidence level between MBEs and non-MBEs individual comments made by 3% or less not listed

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16%

3% 5% 4% 5% 4% 3% 3% 2% 2%

D OWNS IDE D OPE RATIONS /STAFF

MBE S

17% 15% 12%

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20%

STUDY FINDINGS

SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC Pivoting – Of these businesses who made it through the pandemic, one key strategy involved changing their marketing strategies – i.e., pivoting from their current efforts and trying new things – new products/ services/lines of business, more advertising/promotions/networking/ social media. Bottom line, even though most businesses cutback operations to reduce costs, these businesses needed to make up for lost revenue on the other side of the P&L statement and bring in business.

In crisis mode, most businesses began the pandemic by cutting back operations and applying for loans (shorter-term solutions), but as the pandemic continued, MBEs (and non-MBEs) had to find a way to increase the revenue streams that were lost/reduced (long-term solutions).

MBE PANDEMIC CHALLENGES AND STRATEGIES COMMENTS D I S A S T E R S S Y S T E M S A N D E M E R G E N C Y M A N A G E M E N T C O N S U LTA N T Challenge:

Generating new business because of changing Federal guidelines

Strategy:

Keep plugging along, putting ourselves out there; obtain certain certifications and running our business remotely

H E A LT H C A R E Challenge:

Attracting clients, because of their inability to receive service in-person

Strategy:

Used “Telehelp” service

M A I N T E N A N C E A N D R E PA I R S Challenges:

Not being able to have contacts with clients…. I have to make contact to shake the hands, but because of COVID, I could not do this.

Strategies:

Sending e-mails all day long every day.

ACCOUNTING FIRM Challenges:

Honestly. it is just getting paid. We are an accounting firm and we are considered “essential.” Payroll goes through us, taxes go through us and these are needed.

We continued to work during the pandemic. Our biggest issue was being paid by our clients because their doors were closed or their business was limited.

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STUDY FINDINGS

SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC

Strategies:

Initially, we just allowed clients to pay when they could. After a while it got too much because we had to pay our bills and we didn’t have money coming in. So, we slowly started to discontinue services to these clients.

H O M E A N D C O M M E R C I A L S E C U R I T Y C A M E R A S , D ATA N E T W O R K S Challenges:

Having to cater to the customers’ COVID needs, price of insurance has gone up., materials gone up short supply.

Strategies:

Making due with what we have.

CONSTRUCTION Challenges:

Not getting workers and especially not able to get qualified workers.

Strategies:

Worked by myself a lot. Went through the effort of finding people.

B O O K K E E P I N G / PAY R O L L Challenges:

Lost a lot of clients and shutdown business; prices have gone up.

Strategies:

Increased marketing, cut down employees and raise prices on product or services.

C. Paycheck Protection Program (PPP) Did you receive a Paycheck Protection Program or PPP loan?

PPP loans were made available in 2020 and again in 2021. In most cases the loans did not require repayment in all or part to the government.

One-third of Nevada MBEs received PPP – When asked directly, 39% of the Nevada MBEs mentioned they received PPP loans. Of those receiving PPP loan, roughly half of the businesses received one PPP loan during 2020 and almost half said they received two loans by 2021.

MBE vs. non-MBEs – MBEs were more slightly more likely to receive a PPP loan (39%) than non-MBEs (30%). MBEs were also more likely to receive lower loan amounts ($10,000 median loan amount) than non-MBEs ($18,000 median loan amounts).

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STUDY FINDINGS

SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC Received PPP Loan in 2020/21

RECEIVED PPP LOAN IN 2020/21 MBE N=288

Non-MBE N=347

Not Received PPP

Not Received PPP

54%

59% Don't Know

Don't Know Received PPP

8%

39%

12% Received PPP

30%

Among those receiving loan: Received 1 loan 55% Received 2 loans 41% Don’t Know 4% Median loan amount – $10,000

Among those receiving loan: Received 1 loan 61% Received 2 loans 34% Don’t Know 6% Median loan amount – $18,000

COMPARISON OF MBE SURVEY RESULTS TO NATIONAL PPP NEWS A review of various national articles written after the distribution of the PPP loans highlighted that the funds were disproportionate in assisting minority-owned businesses.

A New York Times analysis of data from several sources — including the Small Business Administration, which is managing the loan program — and interviews with dozens of small businesses and bankers show that Black- and other minority-owned businesses were disproportionately underserved by the relief effort, often because they lacked the connections to get access to the aid or were rejected because of the program’s rules.

Because lenders are not required to collect demographic details on their borrowers, data on the Paycheck Protection Program’s racial breakdown has been scarce, but economists have consistently found signs of gaps.

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STUDY FINDINGS

SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC

And data from the Small Business Administration shows the relief effort’s tilt. The vast majority of lenders did not report demographic data on the 3.6 million loans they made this year, but of the 996,000 that included information on the borrower’s race, 71 percent of the dollars went to white-owned businesses. (5) Results from the Nevada MBE study highlighted that businesses receiving PPP funds were slightly higher than non-MBEs; in addition, the average funding received by non-MBEs was higher. The difference in the amount of funding highlighted in the article and the MBE study seem consistent.

The initial results from the Census 2021 Annual Business Study also highlighted that the percentage of MBEs requesting government-sponsored financial assistance during the pandemic were comparable between minority (74%) and non-minority owned firms (72%). (6) Possible reasons for the potential differences between recent news reports and the MBE study regarding PPP funding include: Limited data – Since ethnic/race data was not required in the loan process, national and state level results do not appear to be available. MBE participation in PPP in Arizona, Nevada and Utah might have been different than other states.

Results of surviving businesses – All survey participants were currently in business at the time of the research. Companies that closed down at the time of the survey were not represented in these results. In other words, those who did not receive PPP and might have subsequently closed down were not included in the MBE study.

Confusion with PPP, EIDL and other government grants – A range of loans and grants were made available to businesses over the past two years under the umbrella of the CARES Act. Businesses could have been confused about the source of their loans.

D. New Lines of Business – Additional questions added to the survey specifically asked if businesses added new lines of businesses as a strategy during the pandemic. For some businesses, this meant closing one part of their company and opening or expanding another line – e.g. restaurants opening curbside service and closing dine-in options. A total of 12% agreed that they tried “new lines of business” which was higher than non-MBEs (7%).

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SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC

STARTED NEW LINE OF BUSINESS DURING COVID Chart 4 Started New Line of Business During COVID

MBE n=288

Non-MBE n=347

Did Not Start New Line

Did Not Start New Line

91%

87% Started New Line

12% Don't Know

1%

Started New Line

7% Don't Know

2%

Significantly more MBEs tried new lines of business than non-MBEs

E. Moving back to home-based operation – One cost cutting measure involved moving businesses operations from storefronts/bricks and mortar locations to 100% remote/home-based operations. Among home-based businesses, MBEs were asked if they moved their operations from a separate location and into their home as a result of COVID. Of the 41% who considered their business home-based, 27% switched to home based during the pandemic (11% based to all MBEs).

There were significantly more MBEs who have home-based businesses (41%) than nonMBEs (25%). The percent switching to home-based were fairly comparable between MBEs and non-MBEs.

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SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC F. Online Business – MBEs were asked to estimate the percentage of sales conducted online before the pandemic and two years after the pandemic began.

There seemed to be a slight shift in increased online business among MBEs (7 percentage points higher than before the pandemic) compared to non-MBEs (1 point higher).

The average percentage of online business was slightly higher after the pandemic started for MBEs (5 percentage points than before).

BEFORE PANDEMIC

2022

CHANGE

(PERCENTAGE POINTS)

PERCENTAGE HAD ONLINE SALES MBE

53

60%

7%

NON-MBEs

46%

47%

1%

AVERAGE PERCENTAGE OF ONLINE SALES AMONG THOSE WHO HAD AT LEAST SOME ONLINE SALES MBEs

47%

52%

5%

NON-MBEs

45%

48%

3%

BOLDED FIGURES ARE SIGNIFICANTLY DIFFERENT – PAIRED T-TEST

53% conducted some business online before the pandemic and 60% two years since the start of the pandemic The average amount of sales online before the pandemic was 47% and 52% two years since the start of the pandemic

G. Retrospect – What would you have done differently?

When asked how they would have changed their response to the pandemic, half of the MBEs said they would have done the same thing (49%) or did not know any other options they would have tried (9%).

This was significantly lower than non-MBEs (66%) who would have done the same thing or did not know (9%).

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SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC Among those who provided steps they might have taken (based to the 42% who gave a response), the top solutions were: Save more/stocked supplies/inventory 22% (MBEs, and 19% among non-MBEs).

Applied for the PPP/government funding 14% (MBEs compared to 8% non-MBEs).

Implemented more technology and better prepared for remote working environment 12% (MBEs and 15%, similar to non-MBEs).

Learned new ways to sell services/products (12% MBEs compared to 7% non-MBEs).

Trying to forecasting the future – Two of the top three responses required being able to “forecast the impact of the pandemic” – i.e. stock supplies/inventory ahead of time and being prepared with the technology (e.g., ready to have a remote work force). Applying for the PPP or other government funding seemed to be a more actionable feasible response in retrospect.

MBEs vs. non-MBE differences – Most of the strategies mentioned were comparable between MBEs and non-MBES.

STRATEGIES/SOLUTIONS SHOULD HAVE TRIED DURING PANDEMIC Strategies/Solutions Should Have Tried During Pandemic Minority vs. Non-Minority

MINORITY VS. NON-MINORITY

SAVED MORE , STOCKED SUPPL I ES/ I NVENTORY A P P LI E D FO R P P P/ G OV E R N ME N T LOA N S

8%

M O RE T EC H N O LO GY, P R E P TO R E MOT E WO R K I N G L EA RNED NE W WAYS TO S E LL S E RV I C E S / P R O D U C TS

7%

C LOS E D E A R L I E R

4%

STAF F C H A N G E S - H I R E MO R E O R C UT M OR E I N C R E AS E D MA R KE T I N G E F FORTS

4%

I MP LE ME N T COV I D P R OTOCOL S

4% 0%

MBES

5%

14%

22% 19%

12% 15% 12% 12%

8% 10% 8% 12% 10%

15%

20%

25%

Non-Minority

CIRCLED IN BLACK – SIGNIFICANTLY DIFFERENT AT 95% CONFIDENCE LEVEL BETWEEN MBEs AND NON-MBEs NOTE: OTHER INDIVIDUAL COMMENTS MADE BY 3% OR LESS NOT LISTED Circled in black - Significantly different at 95% confidence level between MBEs and non-MBEs Note: Other individual comments made by 3% or less not listed

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SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC

PANDEMIC STRATEGIES IN RETROSPECT COMMENTS PROJECT MANAGEMENT BUSINESS CONSULTING FIRM I would have probably tried to maximize revenue sources before the pandemic, I would have attempted to get capital from outside sources other than my own service revenue.

ENTERTAINMENT AND MERCHANDISING I would have gotten a PPP loan.

MORTGAGE BROKER I would have pivoted and tried to do something different (rather than kept doing the same thing) because help/customers did not come fast enough.

MEDICAL HOME HEALTHCARE Would not have started the business. Everything had to be closed down.

E-COMMERCE SALES I would have bought more inventory ahead of time.

HEALTHCARE/WELLNESS I would probably pick a different line of business and certain goods and services were more profitable during the pandemic.

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SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC

BUSINESS PROFILE

Sierra Winds, Inc. Owner

RICHARD OLIVAS Vice President

MELANIE HUNTER WHO IS SIERRA WINDS PRODUCTS FOR LEISURE, LLC? Sierra Winds represents manufacturers’ of commercial outdoor playground, recreation/sports equipment as well as flagpoles, park shelters, shades, benches, tables all associated with parks or schools. Sierra Winds handles everything for the customer from design through installation.

HOW DID SIERRA WINDS GET STARTED? In August 1979, Dick Olivas began a company called Reno Fasteners that provided supplies to the construction industry, such as nail guns, tools, nuts and bolts. After a few years in the industry, Dick was looking for a new challenge and saw an ad for a sales rep to sell playground equipment. Dick was intrigued at the possibly of selling playground equipment instead of nail guns. He took the job and bought Sierra Winds a few years later. Sierra Winds progressed from serving the Reno/Sparks community and eventually to all of Nevada and areas east of the Sierras since 1985. Over the past 40 years, the company continued to grow, even during the pandemic.

WHAT CHALLENGES DID SIERRA WINDS FACE DURING THE PANDEMIC? The pandemic did not seem to negatively affect Dick’s business. Sierra Winds already had contracts prior to COVID and continued to work those jobs. Sales continued to grow because customers seemed to be using the slow down during pandemic to improve their properties and add/upgrade recreational equipment. In addition, none of Dick’s installation crew contracted COVID because most of the work was done outside and they were less susceptible to the virus.

Staffing issues – The biggest challenge during the pandemic continues to be hiring and expanding the staff.

Dick has been trying to increase his workforce to handle the additional growth throughout the pandemic. The available labor force has so many employment options that it is difficult to find and keep staff. Dick talked about how potential workers were being offered $25/hour for entry-level construction jobs in the Reno area. In addition, Dick mentioned, N E VA D A M I N O R I T Y B U S I N E S S E N T E R P R I S E R E P O R T

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STUDY FINDINGS

SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC No one wanted to work because they were receiving $1,200 a week in unemployment and government COVID subsidies.

Supply delays – Another issue has been supply chain issues during the pandemic. Normally, the manufacturer can provide products to Sierra Winds within 4 to 6 weeks, but now has been taking 12 to 20 weeks.

Cash flow – Project delays slowed down Sierra Winds cash flow. Dick still had to meet payroll and purchase equipment/products, but now had to wait longer to get paid for his completed projects. These delays have caused a cash crunch for the company.

HOW HAS SIERRA WINDS ADDRESSED THE CHALLENGES? Keeping the current labor force. Dick has managed to keep his team busy, even throughout the supply chain delays. Rather than layoff and rehire staff, Dick kept his current labor force.

I kept the guys busy working, even when we were waiting for projects. During the pandemic, we painted the office and put up a fence at our facility.

Financing – Dick received money through the Paycheck Protection Program (PPP loan), but primarily has had to finance the company out of his own pocket to cover payroll and address the cash flow delays.

Understanding clients – Fortunately, most his customers have been understanding, despite the labor and supply issues delaying some projects several months. Dick has built a strong, loyal customer base through quality products/installations and competitive pricing. A key element that Dick attributes his strong relationship with customers is the time he has spent getting to know their needs and helping them get to know his business.

WHAT CHALLENGES HAS SIERRA WINDS FACED BEING A MINORITY-OWNED BUSINESS? When Dick started the business, he hoped that his minority business status would help him gain government contracts and available funding. As Sierra Winds grew, the potential contracts did not seem to match his company capacity very well and he was often frustrated by the growing paperwork required by the government, especially during the pandemic.

After almost 40 years of being in business, Dick has found ways to work around these obstacles through personal sacrifice and strong customer relationships.

WHAT HAVE BEEN SOME OF SIERRA WINDS BIGGEST SUCCESSES? The company has several examples of large, high visibility contracts that Sierra Winds has won over the years, such as his work for the Reno Aces, the local minor league baseball club. Being able to drive through the area and point out examples of his work feels like he has “left a mark” in the community.

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SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC

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SECTION II. CHALLENGES/STRATEGIES – MINORITY BUSINESS ENTERPRISES COVID was the overriding issue in 2022 that influenced responses about the challenges and strategies associated with being minority-owned businesses. Many of the MBEs and non-MBEs were struggling to keep afloat during the pandemic. While being an MBE had its challenges, the basic survival of the businesses had a significantly larger impact on them than issues such as discrimination or competing on “an even playing field.”

Almost half (43%) of the MBEs did not feel they faced significantly different challenges (or could not think of any challenges top-of-mind). While they might have experienced negative minority-related issues, most primarily focus their efforts at overcoming the challenges of running a business that is common to most organizations.

A. Top-of-Mind Recall of Minority-Related Challenges Of those who were able to recall specific issues, the top ones mentioned were: Being taken seriously Finding customers (i.e., finding contracts, clients) Unable to get contracts

MOST SIGNIFICANT CHALLENGES OR BARRIERS FACED AS A MINORITY-OWNED BUSINESS Most Significant Challenges or Barriers Faced as a Minority-Owned Business

24%

N O U N IQ U E CH A L L E NG E S / SA M E AS OT HE R B US I NESSES

19%

D O N'T K NOW/ NO A N SW ER

9% 7% 7% 6% 6% 5% 3% 2% 1%

NOT B E I NG TA K E N S E R IOUSLY FI ND I NG C L I E NTS / G E T T I NG WO RK ISSU ES W ITH CONT RAC TS / UNA B L E TO G E T CO NTRACTS CO M P E T I T I O N W I T H LA R G E R CO M PA NIES S EC UR I NG LOA NS / FUNDING D I SC R I M I N ATIO N FI ND I NG E M P LOY EES NOT M A K I NG E NO UG H M O NEY C ULT URA L BA R R I E R S / LA N GUAGE 0%

26

10%

ARIZONA MINORITY BUSINESS ENTERPRISE REPORT

20%

30%

STUDY FINDINGS

SECTION II. CHALLENGES/STRATEGIES – MINORITY BUSINESS ENTERPRISES

B. Aided Recall of Minority Business Challenges MBEs were asked a series of aided questions to quantify the challenges they faced.

Almost half (44%) of MBEs felt overcoming negative perceptions of their business being minority-owned was at least somewhat of a challenge (18% significantly challenge, 26% somewhat of a challenge). These responses have held relatively even over the past 15 years.

One-third (34%) felt that cultural differences have had an impact on their business practices (12% significant challenge, 22% somewhat of a challenge).

One third (33%) agreed they have been treated differently because they are a minority-owned business.

OVERCOMING NEGATIVE PERCEPTIONS OF BEING A MINORITY-OWNED BUSINESS Chart 7 Overcoming Negative Perceptions of Being a Minority-Owned Business

Significant Challenge

18% Not a Real Challenge

57%

Somewhat of a Challenge

26%

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SECTION II. CHALLENGES/STRATEGIES – MINORITY BUSINESS ENTERPRISES

WHETHER CULTURAL DIFFERENCES HAVE IMPACT ON BUSINESS PRACTICES Chart 8 Whether Cultural Differences Have Impact on Business Practices

Significant Challenge

12% Somewhat of a Challenge

22%

Not a real Challenge

67%

PERCEPTION OF BEING TREATED DIFFERENTLY

BY SUPPLIERS OR CUSTOMERS Chart 9 Perception of Being Treated Differently by Suppliers or Customers

Don't Know

5%

Strongly Agree

12% Strongly Disagree

27%

Agree

21%

Disagree

35%

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SECTION II. CHALLENGES/STRATEGIES – MINORITY BUSINESS ENTERPRISES

C. Strategies Overcoming Racial Barriers MBEs were asked how they overcome the challenges associated with being minority-owned. The top-ofmind responses included: The most often mentioned top-of-mind reactions was changing their attitude (e.g., working harder, becoming more positive) 21%.

Changing their marketing strategies was next (15%), followed by increased networking.

HOW BUSINESSES OVERCAME BARRIERS AS A MINORITY OWNED BUSINESS TOP UNAIDED RESPONSES

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STUDY FINDINGS

SECTION II. CHALLENGES/STRATEGIES – MINORITY BUSINESS ENTERPRISES Increasing marketing/visibility – MBEs significantly increased their efforts to promote their minority status as a way to overcome their challenges. In a series of aided responses questions, businesses were asked how strongly they agree with statements about specific promotion strategies. Networking and promoting the MBE visibility/brand were the top responses.

Third-quarters (72%) networked with other MBEs. More than half (59%) promoted the fact that they were an MBE. Half (51%) used their minority status to pursue business opportunities.

AGREEMENT WITH STATEMENTS UNIQUE TO MINORITY BUSINESSES ENTERPRISES

30

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SECTION II. CHALLENGES/STRATEGIES – MINORITY BUSINESS ENTERPRISES

CHALLENGES FACING MBEs AND STRATEGIES COMMENTS HEALTHCARE Challenge:

Availability of government funds or contracts

Strategy:

Tried bidding on everything, tried to bid on government bid sites

SUPPLY CHAIN MANAGEMENT Challenge:

Being a minority and also probably just lack of knowledge about the workforce. The biggest challenge has been me not knowing things I could do and resources that were actually available to me. Based on my demographic and background, I had not done my own research and I definitely was not going to be given the knowledge freely.

Strategy:

1. Developing legitimate businesses or companies in my community.

2. Doing my research and development.

Challenge:

Pretty much in your face discrimination, especially when they did not know the owner was Hispanic. Crazy people are so prejudice.

Strategy:

Owner took over dealing with clients; he is a people person.

RETAILER

FINANCIAL INVESTOR Challenge:

Being a minority owned business owner is a barrier and the prejudice we experience.

Strategy:

Filed with the feds to help get government contracts.

SMALL BUSINESS Challenge:

Denied credit; hard to get financing

Strategy:

Picked up outside work and used personal finances.

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SECTION II. CHALLENGES/STRATEGIES – MINORITY BUSINESS ENTERPRISES

CARPET CLEANING Challenge:

Working in the Carson City area, people don’t like it if you send a Hispanic to their home. The owner does not like working down there. He has a white person go down there.

Strategy:

When I have issues here at the lake, some people will not answer their phones because of the Hispanic Caller ID There are two solutions for that… Either I call the customer with my Caucasian last name or we have a brand new phone that says “Carpet Cleaner” because I worked the 2nd part of the day at home.

HEALTH AND WELLNESS

32

Challenges:

Being recognized as an expert in the field.

Strategy:

Marketing my expertise and certifications.

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SECTION III. ACCESS TO CAPITAL One theme that surfaced throughout the interviews was the challenge associated with needing access to capital.

Topics included where MBEs obtain resources to finance their business, how difficult it is to obtain financing, and how they were treated when applying for a loan.

Credit Source – Most MBEs currently fund their business internally – either through the profits/revenue of the business (41%) and/or from owners’ own personal savings/ credit (35%).

Self-funding – Significantly more MBEs self-fund their business than non-MBEs (e.g., personal loans to the business.)

CURRENT FUNDING TOP SOURCES

Waiting for Tom

Current Funding Top Sources Minority vs. Non-Minority

MINORIT Y VS. NON-MINORITY

41% 46% 35%

F U N D I N G FR O M BUS I NE SS O PE RATI O NS

S E LF FUND I NG

9% 6% 7% 7% 5% 2% 4% 2% 1% 5%

BA N KS - OTH E R LE ND I NG I NSTI TUTI O NS

C I TY/ STATE /FE D E RAL LOANS /GRANTS

I NVE STO R S /PARTNE R S /FAM I LY

CR E D I T C AR DS

D O N AT I O N S / CO NTR I BUTI O NS /NO N-PR O FI T 0%

MBES

10%

15%

20%

30%

40%

50%

Non-Minority

* SIGNIFICANTLY DIFFERENT AT 95% CONFIDENCE LEVEL BETWEEN MBE AND NON-MBE OR LESS NOT LISTED

* Significantly different at OTHER 95% confidence level between MBE and non-MBE NOTE: INDIVIDUAL COMMENTS MADE BY 3% Note: Other individual comments made by 3% or less not listed

ARIZONA MINORITY BUSINESS ENTERPRISE REPORT

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SECTION III. ACCESS TO CAPITAL

Significant Challenge – More than half (57%) of MBEs said gaining access to capital was at least somewhat of a challenge (compared to 29% of non-MBEs).

Of those 57% who felt this was a significant challenge, the most often mentioned “capital-related strategies” they used to address the issue were: o o o o

Changed their attitude (e.g., Decided if we really need the loan) Found other financing Increased their marketing efforts Applied for government loans – e.g., PPP Chart 13

A total of 23% disagreed with the statement that they were “treated with respect when Gaining Access to Capital applying for a business loan.”

GAINING ACCESS TO CAPITAL MBEs N=288

Non-MBEs N=347

Significant Challenge

Somewhat of a Challenge

18%

40%

17%

Don't Know Not a Real Challenge

40%

34

Somewhat of a Challenge

Significant Challenge Not a Real Challenge

4%

N E VA D A M I N O R I T Y B U S I N E S S E N T E R P R I S E R E P O R T

70%

11%

Don’t Know

5%

ong top responses:

STUDY FINDINGS

SECTION III. ACCESS TO CAPITAL

OVERCOMING CHALLENGES OF GAINING ACCESS Chart 14 TO CAPITAL Overcoming Challenges of Gaining Access to Capital

A M ON G T OP RE S PO N S E S :

17% 17% 14% 13% 10% 9% 8% 7% 7% 7% 5% 4%

CHANGED ATT IT U D E FOUND OTHER FINA NC ING INCREAS ED MAR KET ING A PPLIED FOR GOVE R NMENT LOA NS /GRA NTS (E.G . , PPP) CUT BACK EX PENSES BUILT UP C R ED IT S ELF FI NA NC ED DID NOT HING EDUCATION/LEA RNED MO R E FROM OTHERS ABOUT FIN A NC ING SOUGHT HELP/A DV IC E DID NOT GIV E U P WORK ED HA R D ER 0%

10%

20%

N-235 AMONG THOSE WHO FELT ACCESS TO CAPITAL WAS AT LEAST SOMEWHAT OF A CHALLENGE

se who felt access to capital was at least somewhat of a challenge

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SECTION III. ACCESS TO CAPITAL

TREATED WITH RESPECT WHEN APPLYING FOR LOANS

I was treated with respect when applying for a business loan at a bank or financial institution Chart 15 Treated With Respect When Applying For Loans , I was treated with respect when applying for a business loan at a bank or financial institution

Don't Know

26%

Disagree

15%

Strongly Agree

19% Strongly Disagree

8% Agree

32%

STEPS TAKEN TO GAIN ACCESS TO CAPITAL COMMENTS SOFTWARE CONSULTANT

Tried to depend less on needing capital.

PERSONAL CARE SERVICES

We just have to use our own savings to make up the need.

BUSINESS CONSULTING

Continue to apply for business funding.

SERVICES

PRINTING

We did apply for a loan and were turned down. We did not get involved in the PPP loans. We tried to do it the old-fashioned way. Don’t know why we were turned down, we could have used the loan. I work 7 days a week to make up for it.

I’m applying for a grant for minority-based startups. Taking advantage of some programs for minorities and retired military.

CIVIL ENGINEERING CONSULTING Had to use retirement money.

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SECTION IV. ROLE MODELS/RESOURCES If you could have anyone visit.... – “If you could have anyone in this world visit your business, and their intentions were to specifically help your business, who would you want these people to be?” Among the top individuals mentioned by MBEs were: Donald Trump (5%) President Biden (4%) Elon Musk (3%) Oprah Winfrey (3%) Among “categories” of potential advisors, business experts were mentioned most often: Business experts/advisors (22%) Politicians (10%) Celebrities (4%) Responses of non-MBEs were comparable to MBEs’ role models/advisors.

PEOPLE TO ADVISE BUSINESS Chart 16 People to Advise Business – Top Mentions

TOP MENTIONS

22% 19%

B U S I N E S S E X P E RT S / A D V I S O RS C P A , I T, M & A , H R. S U C C E S S F U L SP EC I F I C B U S I N E SS L E A D E RS

10%

POLITICIANS

4% 2% 1% 1% 1%

C E L E B RI T I E S FA M I LY M E M B E R/ F RI E N D RE L I G I O U S L E A D E RS S P O RTS F I GU RE S MUSICIANS

25%

D O N ' T KN OW/ N O O N E 0%

10%

20%

30%

*ALL INDIVIDUAL MENTIONS WERE LESS THAN 1% N=288 *All individual mentions were less than 1% n=288

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STUDY FINDINGS

SECTION IV. ROLE MODELS/RESOURCES

PEOPLE TO ADVISE BUSINESS TOP NAMES MENTIONED

Chart 17 People to Advise Business Top Names Mentioned

5%

DO NA LD T RUM P

4%

PRES I DENT BI DEN

ELO N M US K

3%

O PRA H W I NFREY

3%

WA R R EN BUFFET

2%

J EFF BEZOS

2%

G OV ER NO R S I SO LA K

2% 0%

2%

NOTE: OTHER INDIVIDUAL COMMENTS MADE BY 1% OR LESS NOT LISTED comments made N= 288by 1% or less not listed

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4%

6%

STUDY FINDINGS

SECTION IV. ROLE MODELS/RESOURCES

“IF YOU COULD HAVE ANYONE IN THE WORLD VISIT YOUR BUSINESS” COMMENTS… AUTO CARE Ray Crock. The McDonald man who made them what they are today, CONSULTING George Lopez. His business savvy and is successful in his career.

WHOLESALER Jeff Bezos, I am an Amazon wholesale seller through his warehouses and on his platform on Amazon.com PROFESSIONAL COUNSELING Warren Buffet. The fact that even though he is wealthy, he seems to be down to earth and I think he is out there supporting other businesses and teaching others how to make themselves profitable.

TAX, ACCOUNTING AND SMALL BUSINESS CONSULTING FIRM. Michelle Obama because of her class, her status and her understanding what it means to be a black woman in the United States.

FINE ART AND GRAPHICS Oprah Winfrey. She is smart with an extremely large audience or Ellen DeGeneres, These people tend to do well.

BROKER Lady who created Spanx, Sara Blakely. She started as a female owned business with zero capital and was able to overcome all her challenges. I would like to gain insight on how she got through some of those challenges.

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SECTION V. BUSINESS CHARACTERISTICS

WHAT ARE THE CHARACTERISTICS OF MBEs? A key screening criterion for survey participants was that the businesses had to have at least one full-time employee.

A PROFILE OF NEVADA MINORITY BUSINESS ENTERPRISE INCLUDES: Median revenue was $156,000 in 2021.

Median staff size is 3 employees. (5 for non-MBEs) Median age of the business is 6 years old.

Half are family-owned (49%).

Almost half (41%) are home-based businesses Half (53%) were women-owned businesses (28% for non-MBE) Almost half (49%) seek after government or private contracts as a source of revenue.

Two out of four of the top industries MBEs work in involve parts of the services industry – “Other services” and Professional services o Construction is ranked second and retail trade ranked fourth.

WHO ARE THE CUSTOMERS? More than half do work for other businesses (business to business – 56%).

Half of the businesses (50%) conduct business with retail customers One-third (37%) do work with the government.

WHERE ARE THEIR CUSTOMERS/EMPLOYEES? Service area – By design, the survey targeted businesses who work in rural areas in order to better understand those working in HUBZone areas (SEE SECTION ON HUBZONE). Less than half (41%) of these firms conduct business outside of Nevada and within the U.S. and 20% conduct business internationally.

Among those who work outside of Arizona in the U.S. (besides online business): More than one-third work throughout the U.S. – i.e., multiple states in the U.S. (39%).

One-quarter (24%) serve specifically in the Southwest.

The rest service in the Midwest, Northwest, Southeast and Northeast.

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STUDY FINDINGS

SECTION V. BUSINESS CHARACTERISTICS

Among those who work internationally (besides online business): One-quarter service Europe (24%) 18% serve Canada 20% serve in multiple countries worldwide.

The rest work in specific regions of the world (e.g., Mexico, Asia, Australia, South America, and Central America).

COMPARISON BETWEEN MBEs AND NON-MBEs Some key demographic differences identified that MBEs were significantly smaller than non-MBEs in general.

MBE companies had significantly lower annual revenues, were younger in age, and more likely to be home-based than non-MBEs. MBEs are more likely to do business with other businesses and government compared to non-MBEs. One the main differences that surfaced is how well businesses were prepared to handle something like a pandemic. Financially, non-MBEs seemed to have a stronger foundation before the pandemic began than MBEs. A report by the House of Representatives Small Business Committee, indicated differences in the availability of private or government assistance with MBEs and non-MBEs. In a May 2020 McKinsey survey, more than 50 percent of surviving Black-owned businesses reported being very or extremely concerned about the viability of their business. SCORE, one of SBA’s largest Resource Partners, also conducted a client survey in August 2020. Of the roughly 3,500 responses, they found that Black-owned businesses were significantly more disrupted than their white counterparts and were more likely to seek, but less likely to receive, additional private or government assistance. (7)

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STUDY FINDINGS

SECTION V. BUSINESS CHARACTERISTICS

MBE BUSINESS CHARACTERISTICS MBE

Non-MBE

288

347

$156,000

$375,000

3

5

6 years

18 years

Family-owned

49%

43%

Home-based

41%

25%

Retail consumers

50%

57%

Business

56%

42%

Government

37%

25%

Conducts business internationally

20%

16%

Conducts business nationally

41%

38%

S A MPL E SIZE MEDIA N R E V ENUE MEDIA N NUMBER OF EMPL OY EE S MEDIA N AGE OF COMPA N Y BUSINE S S DE S CRIP TIONS

CUS T OMER DE S CRIP TIONS

GEOGR A PHIC S COPE

BOLDED FIGURES ARE SIGNIFICANTLY DIFFERENT (MEDIAN DIFFERENCES USE MANN-WHITNEY TEST)

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STUDY FINDINGS

SECTION V. BUSINESS CHARACTERISTICS Chart 18 Customer Segments Served

CUSTOMER SEGMENTS SERVED 56%

BU SINESSES

50%

R ETA IL CONSU MER S

GOV ER NMENT ( CIT Y, ST A T E, F EDER A L, MU NIC IP A LIT IES)

37% 0%

20%

40%

Chart 19 Type of Business

N=288

60%

TYPE OF BUSINESS n=288

OT HER SERVI CES (EXCEPT P UB LI C ADMIN.)

16%

CO N STRUCTION P R O FESSI O N AL S ERVICE S R ETAI L TRADE HEALTH CAR E AN D SO CI AL ASSI STANCE TRAN S P O RTATI O N AN D WAR EHO USING WHO LESALE TRA DE MAN UFACTURING R EAL ESTATE, R EN TAL & LEASING FI N AN CE AN D I N SURANCE AD M IN. S U PP O RT, WASTE MG MT & R EMEDI ATION ACCO MO DATI O N AN D FO O D SERVICE S

1% 1% 1% 1%

ARTS, EN TERTAI N MEN T, R ECR EATION AG R I CULTURE EDUCATI O N AL SERVICE S I N FO R MATION UN ABLE TO CATEG O R I Z E/R EFUSE D 0%

9% 9% 8% 6% 6% 5% 4% 4% 4% 4%

24%

5% 5%

10%

15%

20%

25%

30%

N=605

N E VA D A M I N O R I T Y B U S I N E S S E N T E R P R I S E R E P O R T n=288

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STUDY FINDINGS

SECTION V. BUSINESS CHARACTERISTICS

ANNUAL REVENUE

MINORITY-OWNED BUSINESSES Revenue in 2021 Revenue in 2021

Chart 20 Annual Revenue

Minority-Owned Businesses

Median Median$156,000 $156,000

$500,000 to $999,999

$100,000 to $499,999

11%

28%

$1M to $4.9M

15% $5M+

Less than $100,000

4%

42%

N=257 (29% did not report revenue) N=257 (29% did not report revenue)

LENGTH OF TIME IN BUSINESS Chart 21 Length of Time in Business

Age Aof Business ge of Bus iness Median 6 6 Years Median Years

4 to 5 years

17% 3 years or less

29% 6 to 10 years

21% 11+ years

33%

N=276not (7% didreport not report business age) age) N=276 (7% did business

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STUDY FINDINGS MBE Service Area (Besides Internet-based business) SECTION V. BUSINESS CHARACTERISTICS

MBE SERVICE AREA

(BESIDES INT ERNET-BASED BUSINESS)

33%

W I T H I N N EIGH BORH OOD

43% 40% 43% 41%

WI T HIN C ITY/TOW N W ITH IN COU NTY W ITH IN STATE T H R O U GH OU T TH E U. S.

20%

I N T ERNATIONAL LY 0%

10%

20%

30%

40%

50%

SPAN OF NATIONAL BUSINESS

Chart 23 Span of National Business U.S. map with percentage of those who do business by section

of the U.S.- both national and international businesses.

U .S . M A P WI T H P ER C ENTA G E OF T H OSE W H O DO B USI N E SS B Y SE C T I O N OF T HE U . S . – B O T H NAT I ON A L A N D I N T E R N AT I ON A L B USI N E SSE S. n=288

NORTHWEST 14% MIDWEST 14% SOUTHWEST 24%

N ORTHEAST 8% S OUTHEAST 12%

ALL STATES 39% SAMPLE SIZE: N=104 THOSE WHO WORK OUTSIDE OF NEVADA IN THE U.S. Sample size: n=104 Those who work outside of Nevada in the U.S.

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STUDY FINDINGS

SECTION V. BUSINESS CHARACTERISTICS Chart 24 Span of International Business World map with percentage of those who do business in each continent.

SPAN OF INTERNATIONAL BUSINESS

W O R L D MAP W I TH P ERC EN TAG E O F T HO SE WHO DO BUSINE SS IN E ACH CO NT INENT.

CANADA

EUROPE

18%

24%

ASIA

14%

MEXICO

8%

CENTRAL AMERICA

7%

AFRICA

12%

SOUTH AMERICA

6%

AUSTRALIA

10%

WORLD-WIDE

20%

SAMPLE SIZE: N=51 THOSE WHO WORK INTERNATIONALLY Sample size: n=51 Those who work internationally

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STUDY FINDINGS

SECTION VI. OWNER CHARACTERISTICS

WHO OWNS THESE MINORITY BUSINESS ENTERPRISES? MBE owners are educated, have higher income than the general public. They are also multi-lingual, middleaged, and have a wide spread of political affiliations.

Characteristics of the owners of MBEs included: Most started the company (89%) Were born in the U.S. (77%) Half speak another language besides English (48%) o 67% speak Spanish (of those who speak a second (or more) language Average age of the owner is 48 years old.

Political affiliation: o Independent – 30% o Democrat – 20% o Republican – 18% o No preference – 6% o Refused – 25% Education: o College graduate – 62% Owner’s median annual income in 2021: o $90,476 Compared to the general population – MBE owners were more than twice as likely to have a college degree and had 50% higher annual income compared to the state’s median household income *.

2020 Nevada education attained – 26% college degree compared to 62% among MBEs owners in 2021. (8) 2020 Nevada median household income – $62,043 (8) compared to the $90,476 among MBE owners in 2021. * Note: The income for MBE owners is not a direct comparison with the overall household figures because the state’s 2020 median income accounts for multiple wage earners in the home compared to the MBE owner’s individual income. The difference of MBEs household income would be even greater than Nevada household income. In addition, the 2021 median income figures were not available at the writing of this report for comparison to the 2022 MBE report.

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STUDY FINDINGS

SECTION VI. OWNER CHARACTERISTICS

OWNER PROFILE

MBE

Non-MBE

288

347

48 years

56 years

62%

63%

$90,476

$113,157

Born in U.S.

77%

92%

Speak another language besides English

48%

23%

Independent

30%

21%

Democrat

20%

11%

Republican

18%

29%

No preference/Other

7%

7%

Refused

25%

32%

S A MPL E SIZE DEMOGR A PHIC S

Average Age Percentage with college degree or more education Median Household Income CULT UR E / L A NGUAGE

P OLITIC A L A F FILIATION

BOLDED FIGURES ARE STATISTICALLY DIFFERENT.

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STUDY FINDINGS

SECTION VII. RURAL AND ECONOMICALLY DISTRESSED AREAS

One of the focuses of the research was to listen to challenges and strategies of businesses in rural and economically distressed areas as defined by their location via “HUBZones.” The Small Business Administration defines HUBZones as “... small business in historically underutilized business zones.” (1). HUBZone business from both urban and rural locations were used in this research, but rural areas were targeted when possible.

Business comparisons were made with the following groups: Operating in a HUBZone Not Operating in a HUBZone Minority Business Enterprise operating in a HUBZone.

CHALLENGES/STRATEGIES DURING THE PANDEMIC HUBZone businesses generally faced the same challenges and used similar strategies during the pandemic as those not operating in a HUBZone. In addition, there were few differences between HUBZone business overall and HUBZone minority-owned businesses. Even when differences were considered “significantly different” between the groups, the percentage differences were relatively small.

CHALLENGES The top three challenges, loss of sales, keeping employees and supply chain issues, were the same for HUBZone, MBE HUBZone and non-HUBZone businesses.

The main significant difference between these groups was that HUBZone businesses were more likely to be challenged with keeping employees and customers safe from the virus.

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STUDY FINDINGS

SECTION VII. RURAL AND ECONOMICALLY DISTRESSED AREAS

TOP CHALLENGES DURING PANDEMIC Top HUBZONE Challenges During VS. Pandemic HUBZone vs. Non-HUBZone NON-HUBZONE

22% 20% 24% 17% 19% 23% 14% 14% 12% 16% 11%

D ECREASE IN SALES/LOSS OF BUSINESS

KEEPING EMPLOY EES

SU PPLY SHORTAGES/DECREASED INVENTO RY

K EEPING EMPLO Y EES / CUSTOMERS SAFE FROM V I RUS

5% 0%

10%

20%

30%

CIRCLED IN BLACK - SIGNIFICANTLY DIFFERENT AT 95% CONFIDENCE LEVEL BETWEEN HUBZONE AND NON-HUBZONE NOTE: ONLY MOST OFTEN MENTIONED TOP-OF-MIND CHALLENGES WERE LISTED

MBE HUBZone

HUBZone

Non-HUBZone

STRATEGIES

rcled in black - Significantly different at 95% confidence level between HUBZone and non-HUBZone ote: Only most often mentioned top-of-mind challenges were listed

More likely to do something – Strategies by HUBZone businesses to address the pandemic were comparable with non-HUBZone businesses and HUBZone MBEs. For each of these groups, the top strategies they used were: o Changing marketing/communication strategies o Changing operations o Choosing not to make any changes o Making staff changes

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STUDY FINDINGS

SECTION VII. RURAL AND ECONOMICALLY DISTRESSED AREAS

ACCESS TO CAPITAL One of the larger differences between HUBZone and non-HUBZone businesses was having access to capital.

More of a challenge – HUBZone MBEs were more likely to feel that gaining access to capital was a significant challenge (44%) than the other groups (24% HUBZone overall to 24% Non-HUBZone). o

During the loan application process, non-HUBZone businesses were almost twice as likely to strongly agree that they were treated with respect (22%) than those in HUBZones (13%).

BUSINESS CHARACTERISTICS A comparison of the business characteristics of HUBZone MBE highlight that they tend to be slightly smaller and newer than non-HUBZone businesses.

HUBZone MBEs are more likely to seek government or private contracts (52%) than HUBZone (40%) and nonHUBZone businesses overall (37%).

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STUDY FINDINGS

SECTION VII. RURAL AND ECONOMICALLY DISTRESSED AREAS

BUSINESS CHARACTERISTICS

HUBZone/Non-HUBZone/HUBZone MBEs HUBZone

NonHUBZone

HUBZone MBE

187

470

87

$182,429

$248,000

$136,363

4

4

3

15 years

10 years

7 years

Family-owned

48%

44%

55%

Home-based

31%

32%

41%

Woman-owned

36%

40%

47%

40%

37%

52%

Conducts business throughout U.S.

42%

38%

41%

Conducts business internationally

23%

16%

24%

S A MPL E SIZE MEDIA N R E V ENUE MEDIA N NUMBER OF EMPL OY EE S MEDIA N AGE OF COMPA N Y BUSINE S S DE S CRIP TIONS

AC TIV ELY SEEKS GOV ER NMEN T A ND PRIVAT E CON T R AC T S GEOGR A PHIC S COPE

BOLDED FIGURES ARE STATISTICALLY DIFFERENT.

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STUDY FINDINGS

SECTION VII. RURAL AND ECONOMICALLY DISTRESSED AREAS

OWNER CHARACTERISTICS HUBZone MBE business owners are not significantly different than most of the non-HUBZone businesses.

HUBZone

NonHUBZone

HUBZone MBE

S A MPL E SIZE

187

470

87

S TA R T ED THE COMPA N Y

73%

76%

86%

SPE A KS A SE COND L A NGUAGE

33%

36%

49%

COL L EGE GR A DUAT E

55%

66%

57%

AV ER AGE AGE

52 years

52 years

48 years

MEDIA N INCOME

$88,125

$100,345

$75,000

BOLDED FIGURES ARE STATISTICALLY DIFFERENT.

IMPLICATIONS The pandemic and being a minority-owned business generally affected HUBZones MBEs similarly than in nonHUBZone areas. The main differences were mainly financially-driven. HUBZone MBEs were smaller in size (half the revenue size) and were significantly more challenged trying to gain access to capital.

In addition, HUBZone MBEs had a greater urgency to try different strategies to get through the pandemic than non-HUBZone businesses.

Helping these HUBZone MBEs requires focusing on building a larger financial foundation to weather the challenges they faced during the pandemic.

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STUDY FINDINGS

SECTION VIII. INDIGENOUS COMMUNITY/REMOTE TRIBAL COMMUNITIES WestGroup was able to conduct 23 interviews with businesses in Indigenous Communities/Remote Tribal Communities in Nevada to provide some insights into their needs and strategies. Some of the businesses are located close to urban areas, but most were in rural areas.

CHALLENGES/STRATEGIES DURING THE PANDEMIC MBEs in Tribal Communities experienced similar issues as MBEs overall during the pandemic. These surviving businesses felt the biggest challenges were: Supply chain shortages (5 of 23) Decreasing sales/loss of business (4 of 23) Staying in touch with employees/customers (3 of 23) Being forced to shut down due to the pandemic (3 of 23) Their top strategies to survive/get through the pandemic were: Changed their marketing efforts (5 of 23) Changed their operations (4 of 23) Followed CDC guidelines (4 of 23) In addition, almost one-third received a PPP loan (30%)

CHALLENGES DURING THE PANDEMIC WITH BUSINESSES IN INDIGENOUS COMMUNITIES COMMENTS RETAILER Challenges:

Ensuring that everyone is safe including staff and customers and CDC guidelines.

Strategies

Enforced masks, hand sanitizing stations, six feet apart distance wise.

SPECIALTY COFFEE

54

Challenges:

Inconsistency of government information for relief programs. Dropping the ball and alienated from other grants.

Strategies:

Constant communication reaching out to get advocate for IRS.

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STUDY FINDINGS

SECTION VIII. INDIGENOUS COMMUNITY/REMOTE TRIBAL COMMUNITIES CONSTRUCTION MANAGEMENT Challenges:

Lack of business; Can’t get contracts; Loss of revenue

Strategies:

Reaching out to different contractors; soliciting my services and doing different marketing and advertising

CHALLENGES/STRATEGIES OF BEING AN MBE Almost half (10 of 23) mentioned that overcoming the negative perceptions of being a minority-owned business was at least somewhat of a challenge.

One-third (7 of 23) felt their cultural differences had a significant impact on their business practices.

Marketing focus – MBEs in Tribal Communities appear to be more likely to promote that they are MBE (73% compared to 59% for MBEs overall).

ACCESS TO CAPITAL Gaining access to capital among Tribal Community MBEs is clearly a significant challenge (48%). One-third (7 of 23) currently finance their business from within the business or personal loans.

CHALLENGES ACCESSING CAPITAL SOURCES COMMENTS LIVE ENTERTAINMENT Maintain good credit program. Let go a majority of staff to maintain stay above water.

CONSTRUCTION MANAGEMENT Applied for loans, but have not receive any capital loans. The loans I have received I had to put my car up for collateral; a small amounts like $5000, but nothing significant.

REHABILITATION SERVICES Increase volume, visiting doctors and advertising more.

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STUDY FINDINGS

SECTION VIII. INDIGENOUS COMMUNITY/REMOTE TRIBAL COMMUNITIES

BUSINESS CHARACTERISTICS Relatively smaller sample sizes made it difficult to compare business characteristics between those in Tribal Communities and MBEs overall.

The following are some comparisons to serve as points of reference.

AMERICAN INDIAN, INDIGENOUS COMMUNITY

MBEs

23

288

$150,000

$156,000

3

3

12 years old

6 years old

70%

49%

Conducts business throughout U.S.

57%

41%

Conducts business internationally

29%

20%

S A MPL E SIZE MEDIA N R E V ENUE MEDIA N NUMBER OF EMPL OY EE S MEDIA N AGE OF COMPA N Y CUS T OMERS

Seeks government/ Private contracts GEOGR A PHIC S COPE

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STUDY FINDINGS

SECTION VIII. INDIGENOUS COMMUNITY/REMOTE TRIBAL COMMUNITIES

OWNER CHARACTERISTICS AMERICAN INDIAN, INDIGENOUS COMMUNITY

MBEs

23

288

S TA R T ED COMPA N Y

87%

89%

SPE A KS A NO THER L A NGUAGE

22%

48%

54 years

48 years

71%

62%

$75,000

$90,476

Similar to business characteristics, the relatively smaller sample sizes made it difficult to compare owner profiles between those in Tribal Communities and MBEs overall.

S A MPL E SIZE

AV ER AGE AGE OF OW NER EDUC ATION – COL L EGE DEGR EE MEDIA N INCOME

Business owners in Tribal Communities appeared to have lower personal incomes than MBE owners over.

IMPLICATIONS 1. MBEs in Tribal Communities tended to profile very similarly with MBEs in general regarding the challenges they faced and strategies they took to overcome them. They financially were hit hard by the pandemic, especially when they had to shut down their businesses. They were also concerned about keeping employees and customers safe from the COVID virus.

2. The need for capital was a continuing theme that was mentioned by these businesses and needed help applying for loans.

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STUDY BACKGROUND AND METHODOLOGY WHAT IS THE HISTORY BEHIND THE STUDY? The 2022 MINORITY BUSINESS ENTERPRISE SURVEY is the part of a series of related studies which began in 1990. The following is a brief timeline of these studies.

1990 — Dr. Loui Olivas began conducting research with Hispanic businesses as an annual project with the Hispanic Research Center at Arizona State University.

2005 — WestGroup Research was hired to conduct the survey. The methodology was switched from mail to telephone survey and the sample size of businesses increased at this time.

2007 — The survey grew to include both Hispanic and non-Hispanic minorities.

2012 — The Arizona Minority Business Center and Arizona Hispanic Chamber of Commerce became the primary project coordinators for the study and expanded the reporting to include individual reports businesses owned by minorities overall, Hispanic (specific), women, and families.

2022 — The study focused on the impact of the pandemic on MBEs and included economically disadvantaged/

rural locations as well as Indigenous Native American businesses. The study grew to include Arizona, Nevada and Utah.

WHY ARE THE ARIZONA MINORITY BUSINESS DEVELOPMENT CENTER AND ARIZONA HISPANIC CHAMBER OF COMMERCE CONDUCTING THIS RESEARCH? The Arizona Minority Business Center and Arizona Hispanic Chamber of Commerce would like this study to be a resource for government officials, planners and analysts; business and community leaders; and educators who want to understand the needs of minority-owned businesses. This research is designed to provide a voice to minority-owned businesses and let them give direction to these supporting organizations.

WHAT BUSINESSES PARTICIPATED IN THE SURVEY? A. Defining the business — This study focuses on businesses that have at least one full-time employee.

It is important to note that the definition of what is considered a “business” varies widely among sources and might present a challenge when comparing data and findings.

B. Defining minority businesses – Using the Arizona Minority Business Development Center definition,

“Minority group members are United States citizens who are Asian, Black, Hispanic and Native American.

Ownership by minority individuals indicates that the business is at least 51% owned by such individuals or, in the case of a publicly-owned business, at least 51% of the stock is owned by one or more such individuals i.e. the management and daily operations are controlled by those minority group members.” (9)

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STUDY BACKGROUND AND METHODOLOGY The following is a breakdown of various groups that participated in the research.

MINORITY GROUP REPRESENTATION MINORITY GROUPS

UNWEIGHTED PERCENT RESPONSE

HISPA NIC

42%

A F RIC A N A MERIC A N

35%

A SIA N

11%

A MERIC A N INDIA N

8%

N ATIV E /H AWAIIA N OR O THER PACIFIC ISL A NDER

4%

O THER

6%

C. Rural and economically distressed areas – One of the focuses of the research will be to listen to

minorities in rural and economically distressed areas as defined by their location via “HUBZones.” The Small Business Administration defines HUBZones as “... small business in historically underutilized business zones.” (1).

D. Number of Paid Employees

EMPLOYEES

UNWEIGHTED PERCENT RESPONSE

1 TO 4

60%

5 TO 9

22%

10 T O 19

8%

20 OR MOR E

10%

NOTE: ROUNDING RESULTS IN TOTALS GREATER OR EQUAL TO 100%

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STUDY BACKGROUND AND METHODOLOGY

E. Woman-owned MBEs

MINORITY GROUPS

PERCENT RESPONSE

WOMEN- OW NED

53%

WHO WAS INTERVIEWED FOR THE NEVADA SURVEY? Telephone interviewers screened respondents in order to reach the “highest level” person in the organization.

In most cases, interviews were conducted with the owner/Chief Executive Officer or President.

POSITION

PERCENT RESPONSE*

OW NER /CEO/ PR E SIDEN T

68%

A DMINIS T R AT OR / M A N AGER

20%

BOA R D MEMBER / E XECU TIV E M A N AGEMEN T

8%

O THER

5%

HOW MANY/WHERE/HOW WAS THE SAMPLE DRAWN FOR THE STUDY? This year’s study expanded to include Arizona, Nevada and Utah. The overall survey results from 1,983 interviews of the three states have a margin of error of +/-2.2% at the 95% confidence level. The 657 interviews in Nevada has a margin of error of +/- 3.8 % at the 95% confidence level. Subgroups with smaller sample sizes have a larger margin of error.

The following sample sizes were targeted within each state Completed 288 MBE interviews (margin of error of +/- 5.8% at the 95% confidence level).

Completed 347 non-minority businesses interviews (margin of error of +/- 5.3% at the 95% confidence level).

Completed 187 businesses within HUBZones (margin of error of +/- 7.2% at the 95% confidence level).

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STUDY BACKGROUND AND METHODOLOGY Completed 470 interviews with business outside of the HUBZones (margin of error of +/- 4.5% at the 95% confidence level).

Targeted 50 businesses with Indigenous Native American ownership, resulting 23 completed interviews.

Data weighting was used when combining the various quotas in order to provide a representative sample of each state.

The sample used for this study was purchased from various sources, including Scientific Telephone Samples. The following organizations supplemented the sample by providing contact lists: Arizona Hispanic Chamber of Commerce Minority Business Development Agency Business Center Small Business Administration Chambers of Commerce throughout the Nevada

WHAT METHOD WAS USED TO CONDUCT THE RESEARCH? The survey was conducted through telephone interviews. Due to the high incidence of Hispanic businesses, respondents were given the option of participating in the interview in Spanish.

WHEN WAS THE SURVEY CONDUCTED? The Nevada surveying began on February 15, 2022, and was completed on March 30, 2022.

WAS AN INCENTIVE USED TO ENCOURAGE PARTICIPATION? Respondents were given the option to include their name for a drawing for one of 10 $100 gift certificates.

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STUDY BACKGROUND AND METHODOLOGY

CONTACT INFORMATION For more information about the research, please email your questions or requests to: A R I Z O N A H I S PA N I C C H A M B E R O F C O M M E R C E

MS. MONICA S. VILLALOBOS MonicaV@azhcc.com WESTGROUP RESEARCH

MR. GLENN IWATA

glenn@westgroupresearch.com

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END NOTES 1.

U.S. Small Business Administration, 409 3rd St, SW. Washington DC 20416, https://www.sba.gov/federalcontracting/contracting-assistance-programs/hubzone-program

2.

Nicols, Chris, “Fact-check: Have one-third of US small businesses closed during the pandemic?“ PolitiFact. com, https://www.statesman.com/story/news/politics/politifact/2021/06/08/kamala-harris-small-business-closures-covidfact-check/7602531002/

3.

Duke University’s Fuqua School of Business, “Three Factors Contributing to the Ongoing Global SupplyChain Crisis,” December 13, 2021 https://www.fuqua.duke.edu/duke-fuqua-insights/robert-swinney-three-factorscontributing-ongoing-global-supply-chain-crisis#:~:text=It%20appears%20that%20three%20major,often%20run%20at%20 or%20near

4.

U.S. Census https://data.census.gov/cedsci/table?q=ABSCB2017.AB1700CSCB02%26nkd%3DQDESC~B01

5.

New York Times, “Minority Entrepreneurs Struggled to Get Small Business Relief Loans,” April 4, 2021, https://www.nytimes.com/2021/04/04/business/ppp-loans-minority-businesses.html

6.

U.S. Census, 2021 Annual Business Study, ABS Financing Module, https://www.census.gov/data/tables/2021/ econ/abs/2021-abs-financing-module.html

7.

8.

9.

Chairwoman Nydia M. Velazquez, House Committee on Small Business, “The State of Black Owned Small Businesses in America,” https://smallbusiness.house.gov/uploadedfiles/bob_report_final.pdf

U.S. Census, https://www.census.gov/quickfacts/fact/table/AZ/HCN010212?

Premier Quantitative Consulting Inc., “Contracting Barriers and Factors Affecting Minority Business Enterprises A REVIEW OF EXISTING DISPARITY STUDIES” PREPARED FOR Minority Business Development Agency Under Contract SB1352-15-SE-0425.

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