UTAH Minority Business Enterprise Study Report (2022)

U T A H MINORITY BUSINESS ENTERPRISE STUDY REPORT 2 0 2 2

U T A H

2 0 2 2

U T A H 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 – Nanoshell Company; Owner: Dr. Agnes Ostafiin and Dr. Hiroshi Mizukami

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SECTION II.

Challenges/Strategies – Minority Business Enterprises

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SECTION III.

Access to Capital

31

SECTION IV.

Role Models/Resources

35

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 676 telephone interviews were conducted with Utah businesses from April 1 through April 20, 2022. This was broken down into 179 MBEs and 477 non-MBEs (20 were not identified). The original target was to contact 400+ MBEs, but sample sources were significantly lower for Utah businesses than other states because of the lower percentage of MBEs. 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 (16 interviews).

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

SURVIVING AND THRIVING BUSINESSES –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) 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.

CHALLENGES DURING THE PANDEMIC – While some businesses/industries thrived during the pandemic, most of those surveyed faced a series of challenges that were mentioned throughout the study.

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

DECREASED SALES/LOSING CUSTOMERS – 31% of MBEs top-of-mind mentions – The top mentioned challenge during the pandemic by Utah MBEs was significant decreases in

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STUDY HIGHLIGHTS revenue. While not all businesses were affected, many of the businesses experienced an initial hit to their revenues in early 2020. Most of those who participated in the survey were in some level of recovery by the time of the survey.

KEEPING EMPLOYEES – 21% of MBEs top-of-mind – After the initial revenue decreases at the start of the pandemic, the next step involved restarting businesses or recovering from the initial shutdowns. Replacing employees continues to be a major obstacle during this recovery phase. 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 INVENTORY SHORTAGES – 15% of MBEs top-of-mind – Another continued challenge during the current phase of the pandemic involves supply chain issues resulting in shortages in supplies, materials and inventory.

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) INFLATION AND ACCESS TO CAPITAL – BBoth were less than 10% of MBEs top-of-mind; however, their response was still significantly higher than non-MBEs as challenges they faced during the pandemic.

PANDEMIC STRATEGIES/SOLUTIONS – 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.

CUT LOSES/LOW HANGING FRUIT – Mentioned by 9% who said “changed staffing,” 8% mentioned “changed operations,” and 7% “mentioned switching to remote working 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 regarding the length of the pandemic. These changes were typically the first solutions that were implemented.

SEEKING HELP/APPLIED FOR LOANS – Mentioned by 11% of MBEs top-of-mind – As expenses mounted, businesses began to apply for the government loans that were made available. Even though 11% mentioned applying for loans top-of-mind, 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 or government funding, the PPP and EIDL were part of the strategies tried during this phase.

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STUDY HIGHLIGHTS

FOLLOWING CDC GUIDELINES/MASKS/VACCINES – Mentioned by 12% top-of-mind. The controversies associated with adherence to CDC guidelines grew as the pandemic continued; however, some businesses considered making these changes a critical strategy for the safety of their employees and customers.

INCREASING MARKETING EFFORTS – Mentioned by 16% of MBEs top-of-mind (most often mentioned strategy) --As the pandemic continued, MBEs needed to identify new revenue sources to make up for the lost customers. 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 OF BEING MBE – Half of MBEs (49%) felt they have had

to overcome negative perceptions associated with being a minority-owned business; one third (31%) felt cultural differences have affected their business practices, and one third (32%) agree they have been treated differently because they are minority-owned.

CHANGE OF ATTITUDE – The most often top-of-mind strategy to overcome the

negative perceptions was to change their attitude (28% mentioned making changes such as working harder to prove themselves and/or not giving up). Some of stories mentioned by Utah MBEs involved putting up with customer/supplier negative attitudes or ignoring derogatory comments. Most MBEs had to develop a mental attitude and accept this was a normal part of doing business.

INCREASE MARKETING/BUILD RELATIONSHIPS – The main strategies used to address the negative impacts of being a minority-owned business involved increasing their visibility and relationships through various marketing efforts. MBEs were asked a series of questions (aided questions) about specific steps they might have taken. Most companies network with other MBEs (61%). Half (50%) promote the fact they are an MBE, and half (47%) use their minority status to pursue business opportunities (e.g., government contracts).

ACCESS TO CAPITAL When asked specifically (aided questions), access to capital became an ongoing theme 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 (27%).

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STUDY HIGHLIGHTS

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

SIGNIFICANT CHALLENGE – More than half (52%) of Utah MBEs said gaining access to capital was at least somewhat of a challenge (compared to 33% of non-MBEs).

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

Median revenue was $182,142 in 2021.

Median staff size is 4 employees. (6 for non-MBEs) Median age of the business is 9 years old.

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 47 years old (52 for non-MBEs).

Education: o College graduate -- 57% (63% for non-MBEs) Owner’s median annual income in 2021 o $88,750 ($96,768 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/STRATEGIES AMONG HUBZONE BUSINESSES HUBZone Pandemic Challenges – Keeping employees, experiencing decrease in sales and having supply chain challenges were the top three challenges for both the HUBZone and non-HUBZone businesses. o

MBEs in HUBZones were more likely to mention being affected by a drop in sales (37%) than non-HUBZone businesses (22%).

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STUDY HIGHLIGHTS

HUBZone Strategies - The top four strategies used by HUBZone businesses were changing marketing/communication efforts, following CDC guidelines, making staff changes, and changing operations. o

MBEs in HUBZones were more likely to advertise (16%) than non-HUBZone businesses (5%).

ACCESS TO CAPITAL MBEs in HUBZones are more slightly more likely to feel gaining access to capital is a significant challenge (28%) than non-HUBZone businesses (15%).

BUSINESS/OWNER PROFILE DIFFERENCES Business Characteristics – A comparison of the business characteristics of HUBZone MBEs highlight that they tend to be smaller (lower revenue), more likely to be homebase and newer than non-HUBZone businesses.

Owner Characteristics – HUBZone MBE business owners are not significantly different than most of the non-HUBZone businesses.

INDIGENOUS COMMUNITY/REMOTE TRIBAL COMMUNITIES WestGroup completed 16 interviews with businesses in Indigenous Communities/Remote Tribal Communities in Utah (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 Keeping employees (4 of 16) Decreasing sales/loss of business (4 of 23) Their top strategies to survive/get through the pandemic were: Changed their marketing efforts (3 of 16) Changed staff (3 of 16)

ACCESS TO CAPITAL Gaining access to capital among Tribal Community MBEs is clearly a challenge (7 out of 16). The majority (10 of 16) currently finance their business from within the business or personal loans.

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CONCLUSIONS 1. MBEs followed the same patterns as non-MBEs regarding the challenges they faced during the

pandemic and how they dealt with the problems. The problems and solutions that MBEs faced a natural flow of problems and businesses responses.

HOW WERE BUSINESSES AFFECTED?

WHAT HAPPENED? Stage 1: GOVERNMENT

WHAT DID BUSINESSES DO?

SHUT-DOWN BUSINESSES

Immediate loss of revenue

Cut expenses, laid off workers

State 2: CONFLICTS

Conflicts with employees/ customers/ suppliers

Most stayed within government requirements

Stage 3: RETURN TO

Needing cash to replace lost business

Applied for government loans/grants; Increased marketing efforts (e.g., started new lines of business)

ADHERING TO CDC GUIDELINES

BUSINESS

Trying to replace workers

Stage 4: PARTS OF ECONOMY

Supply chain issues

MORE AFFECTED THAN OTHERS

Changed hiring practices, still a problem Longer wait times, Tried new lines of business, still a problem.

Comparing responses between MBEs with other groups highlighted differences: MBEs were more severally affected by the loss of business than non-MBEs MBEs had more difficulty accessing capital than non-MBEs When MBEs were able to receive government loans/grants (e.g., PPP), they typically received less assistance than non-MBEs. MBE companies had significantly lower annual revenues, were newer companies (years in business), and more likely to be home-based than non-MBEs. HUBZone MBEs had greater difficulty accessing capital than non-HUBZone businesses MBEs in Indigenous Communities were more likely to feel that accessing capital was a significant challenge than other MBEs and non-MBEs.

2. NEGATIVE PERCEPTIONS – In the midst of the pandemic, half of the MBEs still felt they had

to overcome negative perceptions associated with being a minority business. Utah MBEs have taken steps to increase their visibility and marketing efforts to try and overcome the barriers.

On the other hand, most have experienced enough discrimination or derogatory comments throughout their lives and have had to learn to deal with these negative perceptions.

3. PREPARING FOR THE FUTURE – When asked what they would have done differently regarding responding to the pandemic, most mentioned something about being better prepared for a disaster– e.g., stocked more inventory and supplies, adopted new technology ahead of time. This is especially critical for MBEs who are smaller and less funded/prepared to handle a pandemic. Efforts to assist these businesses should focus on helping them develop the financial depth and funding resources to get them through a disaster.

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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 Utah 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: Utah had 34,366 minority-owned businesses, which represents the total number of firms with or without paid employees. (A total of 4,866 minority-owned businesses had paid employees.) (4) Minority-owned firms represented 11.0% of all Utah businesses. (4) The 2022 Utah 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 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 is from those that stayed in business throughout the two years since the start of the pandemic. There were 30 out of 179 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 MBEs faced during the pandemic were: o

Decrease in sales/Lost businesses – The top mentioned challenge by MBEs during the pandemic was a drop in sales and lost business (31%). MBEs were significantly more likely to mention decreased sales than non-MBEs (18%).

o

Keeping employees – The second most mentioned top-of-mind challenge by MBEs was trying to keep employees (21%). As businesses began to reopen after the initial shutdowns, finding employees willing to come back into the workforce or return to their original jobs was a significant challenge.

o

Supply/inventory shortages – A total of 15% of MBEs mentioned supply shortages as one of the top challenges facing their company during the pandemic. Both MBEs and non-MBEs considered this one of the top three challenges. As the pandemic progressed, concerns about supply chain issues represented a third wave of challenges, after decrease in revenues and workforce shortages.

o

Inflation and Access to capital– Both of these challenges were mentioned by less than 10% of MBEs; however, their responses were significantly higher than nonMBEs as a challenge they faced during the pandemic.

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STUDY FINDINGS

SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC

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

31%

D EC R EASE I N SA LES/LOSS OF BUSINESS

18% 21% 25% 15% 16% 11% 11% 7% 8% 6% 2% 5% 1% 5% 5% 4% 6% 2% 7% 2% 5%

K EEP I N G EM PLOYEES S U P P LY S H ORTAG ES/D EC R EASED INVENTO RY N O P R OB LEMS/CHALLENGES CO MMU N I C ATI N G W ITH C U STOMER S/ EM PLOYEES D U R I N G QUARANTINE IN FLATI ON/R ISING COSTS ACCESS TO CAPIT AL C H A NG ES I N G OV ER NMENT R EGULATIO NS SH U TTI N G D OWN D URING COVID KE E P I N G EMP LOY EES FR OM C ATCHING VIRUS EMP LOY EES WOR K I N G FRO M HO M E 0%

MBE S

20%

N o n -M i n o r i t y

CIRCLED IN BLACK – SIGNIFICANTLY DIFFERENT AT 95% CONFIDENCE LEVEL BETWEEN MBEs AND NON-MBEs BY 3% OR LESS NOT LISTED

led in black - Significantly different at 95% confidence level between MBEs and non-MBEs NOTE: OTHER INDIVIDUAL COMMENTS MADE e: Other individual 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 that they tried during COVID. MBEs tried numerous strategies over the past few years with the top three being: 1. Changed marketing strategies (16%) –When asked about the strategies they tried

to overcome the challenges during the pandemic, the top mentioned solution by MBEs was making changes to their marketing strategies. This involves any one of a number of approaches, including 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).

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).

2. Following the CDC guidelines (12%) – The second most often strategy involved following

the continually changing guidelines that were either mandated or “strongly recommended” during the pandemic. The controversies about vaccines and mask requirements still were an important step for some of these businesses to protect employees, customers and suppliers.

3. Applying for loans (11%) – Applying for loans was considered one of the three, top-of-mind strategies MBEs tried during the pandemic. In addition, MBEs were significantly more likely to mention applying for loans than non-MBEs (5%).

Non-MBEs were significantly more likely to mention strategies to move their employees to work from home (12%) than MBEs (3%), and pay their employees more (6%) than MBEs (2%).

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STUDY FINDINGS

SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC

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

Chart 2 Strategies/Solutions to Challenges During Pandemic Minority vs. Non-Minority

16%

CHANGED MA R KETING STRATEG I E S

13% 12% 14% 11%

FOLLOWED CDC GU I DEL I NES , MASKS , VACC I NE S A PPLIED FO R LOA N S

5%

D ID NOT H I N G CHANGED STA F F ING/H IR ING PRACT I C E S CH A NGED O PERAT I ON S SWITCH ED TO R EMOTE WO R K FO RC E

4%

CH A NGED A TTITU DE S PER SISTENCE, PO SITI V I T Y

4%

CUT BACK O PERAT I ON S

4%

WO R KED H A RDE R

3%

NEW R EV ENU E STRAT EGY

R EMOTE WO RK I N G

2%

PA ID EMPLOYEES M ORE

12%

9% 10% 8% 9% 7% 7% 7% 7%

6%

3% 5% 2% 3%

CH A NGED STR A TE G I E S , SO U GHT H ELP, A DV I C E

12%

6%

0%

MBE S

9%

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

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

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20%

STUDY FINDINGS

SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC

MBE PANDEMIC CHALLENGES AND STRATEGIES COMMENTS FULL SERVICE EVENTS FIRM Challenge:

They (government) shut down all gatherings of all events.

Strategy:

We applied for all possible funding opportunities. We were lucky to be featured by media outlets- radio, TV. Salt Lake chamber, and Visit Salt Lake all supported us

INDUSTRIAL MACHINERY DISTRIBUTING Challenge:

We had a lot of struggles with lead times.

Strategy:

Managing expectations of our customers better by communicating more. We also tried to increase stock in inventory

MECHANICAL CONSTRUCTION Challenges:

Keeping up with demand.

Strategies:

Listed on Indeed for workers.

T R U C K I N G , T R A N S P O R TAT I O N , L O G I S T I C S Challenges:

Getting paid for service. Keeping our drivers, Staying competitive, Make profit.

Negotiating on delivery in a way that was profitable.

Strategies:

We focused on the relations we had with our brokers. They were willing to work with us for a better rate on the loads we were booking with them.

PROTECTIVE EQUIPMENT FOR CONSUMERS AND GOVERNMENT Challenges:

Decrease in sales.

Strategies:

We pivoted to different markets.

MEDICAL DURABLE SUPPLIES Challenges:

Patients passing away. Supply chain demand.

Strategies:

Reaching out to find new vendors.

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STUDY FINDINGS

SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC 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.

Four out of ten Utah MBEs received PPP – When asked directly, 43% of the Utah MBEs mentioned they received PPP loans. Of those receiving PPP loans, more than half of the businesses received only one PPP loan during 2020 (61%) and one-third (32%) said they received two loans by 2021.

MBE vs. non-MBEs – A comparable percentage of MBEs and non-MBEs received PPP loans (not significantly different). On the other hand, MBEs were also more likely to receive lower loan amounts ($14,000 median loan amount) than non-MBEs ($30,000 median loan amounts).

RECEIVED PPP LOAN IN 2020/21 Received PPP Loan in 2020/21

MBE N=179

Non-MBE N=477

Not Received PPP

Not Received PPP

48%

53%

Don't know

14%

Don't know Received PPP

5%

Received PPP

38%

43%

Among those receiving loan: Received 1 loan 61% Received 2 loans 32% Don’t Know 8% Median loan amount – $14,000

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Among those receiving loan: Received 1 loan 64% Received 2 loans 28% Don’t Know 8% Median loan amount – $30,000

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STUDY FINDINGS

SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC

COMPARISON 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.

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. (4) Results from the Utah MBE study highlighted that businesses receiving PPP funds were comparable to nonMBEs; however, the average funding received by non-MBEs was significantly 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%). (5) Possible reasons for the potential differences between recent news reports and the MBE study regarding the disparity in PPP funding between MBEs and non-MBEs 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.

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STUDY FINDINGS

SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC

D. New Lines of Business – Additional questions in 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 business and opening or expanding another line – e.g. restaurants opening curbside service and closing dine-in options. A total of 8% agreed that they tried “new lines of business” when asked directly, which was comparable to non-MBEs (6%).

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

MBE N=179

Did Not Start New Line

90%

Non-MBE N=477

Did Not Start New Line

92% Started New Line

6% Started New Line

8% Don't Know, 2% No significant differences between MBEs and non-MBEs.

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U TA H 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

Don't Know

2%

STUDY FINDINGS

SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC 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, 30% switched to home-based during the pandemic (12% based to all MBEs).

There were significantly more MBEs who have home-based businesses (41%) than nonMBEs (26%). The percent switching to home-based during the pandemic was comparable between MBEs and non-MBEs.

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 shift to more businesses conducting online business for MBEs (8 percentage points higher than before the pandemic) and non-MBEs (4 point higher) during the pandemic.

Among those who conducted business online, the average percentage of online business was comparable after the pandemic started for MBEs and non-MBEs than before the pandemic.

BEFORE PANDEMIC

2022

CHANGE

(PERCENTAGE POINTS)

PERCENTAGE HAD ONLINE SALES MBE

50

58%

8%

NON-MBEs

51%

55%

4%

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

47%

48%

1%

NON-MBEs

39%

40%

1%

BOLDED FIGURES ARE SIGNIFICANTLY DIFFERENT – PAIRED T-TEST

U TA H 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 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 (51%). This was significantly lower than non-MBEs (61%).

Among those who provided steps they might have taken, the top solutions were: Save more/stocked supplies/inventory 30% (MBEs, and 29% among non-MBEs).

Implemented more technology and better prepared for remote working environment 15% (MBEs and 14% non-MBEs).

Learned new ways to sell services/products (9% MBEs compared to 4% non-MBEs).

Forecasting the future – The top two 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).

MBEs vs. non-MBE differences – Most of the alternative strategies they could have tried were comparable between MBEs and non-MBEs. The only significant difference was that non-MBEs were more likely to say they would have increased marketing efforts (9%) than MBEs (2%).

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

MINORITY VS. NON-MINORITY

30% 29%

SAV E D M O R E , STO C K E D S U P P L I E S / I N V E N TO RY/ M O R E T ECH N O LO GY, P R E P TO R E M OT E WO R K I N G LE A R NE D NE W WAYS TO S E L L S E RV I C E S / P R O D U C TS

4%

8% 4% 6% 8% 6% 4% 5% 6% 5% 9% 5% 5% 2% 9%

I M P L E M E N T COV I D P R OTO CO L S STA F F C H A N G E S - H I R E M O R E O R C U T M O R E C LOS E D E A R L IE R A P P L I E D FO R P P P/ G OV E R N M E N T LOA N S STAYE D O P E N / S H O U L D N OT H AV E C LOS E D N OT FO L LOWE D M A N DAT E S I N C R E AS E D M A R K E T I N G E FFO RTS 0%

MBE S

9%

15% 14%

10%

20%

30%

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

20

U TA H 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 Significantly different at 95% confidence level between MBEs and non-MBEs Note: Other individual comments made by 3% or less not listed

STUDY FINDINGS

SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC

PANDEMIC STRATEGIES IN RETROSPECT COMMENTS RETAIL OF LASER ENGRAVING. I would have tried to get a loan and stock up on merchandise.

RESEARCH AND DEVELOPMENT We would have gotten more prepared for people to work at home.

SERVICE BUSINESS I would have closed the business down.

DOG TRAINERS I would have created some type of online service.

PRODUCTION COMPANY I would have been more diversified in what we do, instead of focusing on the one that makes the most money.

E-COMMERCE SHOP I would have had more suppliers. Try to arrange multiple sources of products so I would not be stuck with one source.

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STUDY FINDINGS

SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC

BUSINESS PROFILE

NanoShell Company Owners

DR. AGNES OSTAFIN & DR. HIROSHI MIZUKAMI TRANSITIONING SCIENCE INTO A BUSINESS WHO IS NANOSHELL COMPANY? Nanoshell Company applies nanoscience technology to develop products for the medical and consumer goods industries. Nanoshell is led by Dr. Agnes Ostafin and Dr. Hiroshi Mizukami who manage the company along with a staff of three employees who work in the manufacturing part of the business. Nanoshell is a live example of scientists understanding the commercial value of their research and transitioning their work from academia to a successful private sector development and manufacturing business.

In layman’s terms, “nano” is something very small that can penetrate more places, faster, more efficiently, and with less waste. For example, nanomedicine is able to deliver drug dosages to specific parts of the body, such as chemotherapy, more precisely, accurately and less damaging. Nanoshell uses the science to develop products, such as pharmaceuticals, vitamins and personal care products.

HOW DID NANOSHELL COMPANY GET STARTED? Prior to starting Nanoshell, Dr. Ostafin was on the faculties of the University of Utah and Notre Dame University specializing in nanoscience. She did research and published papers in the medical and materials-related aspects to nanotechnology. Over time, Dr. Ostafin wanted to pursue her interest in private sector so she left her academic positions and started Nanoshell together with Dr. Mizukami in 2005. For the first 6 or 7 years, the company focused on the medical aspects of nano technologies, and started developing treatments for specific blood disorders. Nanoshell developed a technology that would isolate a desired or undesired component of the blood as well as ways to retrieve those components from the blood for diagnosis and analysis. Most of the funding for the business during these first years came via grants from the National Institutes of Health and National Science Foundation.

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SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC

In the following 10+ years, Nanoshell has used the nanotechnology to branch further into more mainstream products that “people could actually buy,” such as vitamins and personal care products.

WHAT CHALLENGES DID NANOSHELL FACE DURING THE PANDEMIC? Prior to the pandemic, Nanoshell served as a wholesaler by manufacturing products for other companies. Once the pandemic began, Nanoshell experienced a significant drop in revenue as customers discontinued their contracts due to the uncertainty in the marketplace.

Another challenge Nanoshell experienced was losing two of their employees during the pandemic. Finding people to replace them has been especially challenging as well as training and bringing the new staff up to pre-pandemic levels.

HOW DID NANOSHELL ADDRESS THEIR PANDEMIC CHALLENGES? One of the first steps that Nanoshell took was to apply for government funding through the Emergency Injury Disaster Loan (EIDL) program.

This made cash available and helped them through the initial economic downturns.

Another step Dr. Ostafin and Dr. Mizukami took was to change their marketing strategy from a “wholesale only” model and began to add retail/direct-to-consumer products to expand their revenue options. Nanoshell developed their own line of products and is currently building the marketing channels for distribution.

One of the challenges that Nanoshell faces is prioritizing the science aspect of their work versus the money making aspects. As scientists, the owners are used to solving problems and developing scientific solutions, but not necessarily on the sales and marketing side of the business. The pivot from wholesale to retail accentuates the challenge of having to become even more marketing focused.

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STUDY FINDINGS

SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC WHAT CHALLENGES HAS NANOSHELL FACED BEING A MINORITY-OWNED BUSINESS? Dr. Ostafin mainly discussed the advantages of being a minority-owned business (and being a womanowned business). In technology-focused industries, minority status does not appear to be a major downside as long as the company has the technical expertise and business savvy to produce and deliver the products.

In addition, NanoShell has used their minority status to their advantage with the federal grants.

WHAT HAVE BEEN SOME OF NANO SHELL’S BIGGEST SUCCESSES? Dr. Ostafin’s top-of-mind response when asked about Nanoshell’s success was, “We are not bankrupt!”

Making it through the pandemic has definitely been a challenge.

Other successes include receiving patents and federal grants related to a number of their nano technologies.

These successes help provide credibility to their customers and suppliers.

The company also recently started a subsidiary in Poland to begin entering the EU market.

WHAT ADVICE WOULD YOU OFFER TO SOMEONE STARTING A BUSINESS LIKE YOURS? They need money, an investor, and/or a partner that has the knowledge to (run the business) with less money. Finding the right people to work with is better than going at it alone.

24

U TA H 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

STUDY FINDINGS

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 (46%) 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) Helping run the business

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

31%

NO UNIQ UE CHALLE N G E S/SAME AS OTHER BU S I N ESS ES

16% 12%

DON'T KNOW/NO A N SWER N OT BEIN G TAKEN S ERI O US LY

6% 5% 5% 3% 2% 2% 2%

FIN DIN G CLIE N TS/G E TTI N G WO RK HELP RUNNIN G THE B U S I N ESS DISCRIM I N ATI O N COMP ETITION WITH LARG E R CO M PA N I ES SECURIN G LOANS/ FUN D I N G FINDING E M PLOY EES CULTURAL BARRIE RS/LA N GUAGE 0%

10%

20%

30%

U TA H 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

40%

25

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.

Half (49%) of MBEs felt overcoming negative perceptions of their business being minority-owned was at least somewhat of a challenge (16% significantly challenge, 33% somewhat of a challenge).

One-third (31%) felt that cultural differences have had an impact on their business practices (12% significant challenge, 19% somewhat of a challenge).

One third (32%) 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

16% Not a Real Challenge

52%

Somewhat of a Challenge

33%

26

ARIZONA MINORITY BUSINESS ENTERPRISE REPORT

STUDY FINDINGS

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

19% Not a Real Challenge

69%

PERCEPTION OF BEING TREATED DIFFERENTLY

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

Don't know

6%

Strongly Agree

10% Strongly Disagree

Agree

23%

22%

Disagree

40%

U TA H 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 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) 28%.

Changing their marketing strategies was next (17%), followed by seeking advice/input and increased networking.

HOW BUSINESSES OVERCAME BARRIERS AS A MINORITY OWNED BUSINESS How Businesses Overcame Barriers as a Minority Owned Business – Top Unaided Responses

TOP UNAIDED RESPONSES

28%

CHANGED THEI R ATTITUDE

17%

CHANGED M ARKETING STRATEGY

14%

SOUGHT ADVI CE/INPUT

12%

NETWORKI NG

5%

HIRED A NGLO/MALE PARTNER

4%

GOOD CUSTOMER SERVICE BUDGETED

3%

HI RED MORE

3%

GOT LOANS

3%

TOOK CARE OF EMPLOYEES

3% 0%

28

10%

U TA H 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

20%

30%

STUDY FINDINGS

SECTION II. CHALLENGES/STRATEGIES – MINORITY BUSINESS ENTERPRISES

Increasing 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 the MBE visibility/brand was the top response.

Two-thirds (61%) networked with other MBEs. Half (50%) promoted the fact that they were an MBE. Half (47%) used their minority status to pursue business opportunities.

AGREEMENT WITH STATEMENTS UNIQUE TO MINORITY BUSINESSES ENTERPRISES Chart 11 Agreement With Statements Unique to Minority Businesses Enterprises

22%

I T RY T O N ETW O R K W I TH O TH ER M B E S

19%

I T RY TO PR O M OTE M B E STATUS

I U SE M Y M B E S TA TUS TO PUR S UE B US I N ES S O PPO R TUN I TI ES

31%

16% 0%

31% 20%

STRONGLY AGREE

61%

39%

40%

50%

47% 60%

80%

AGREE

U TA H 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 II. CHALLENGES/STRATEGIES – MINORITY BUSINESS ENTERPRISES

CHALLENGES FACING MBEs AND STRATEGIES COMMENTS HOUSE PAINTING Challenges:

One incident… Someone saw my website and the web designer just copy and pasted his dad’s website and changed the name of it, but left a pic of his dad on the website. His dad was a white man. One customer thought that the white man on the website would show up, and the customer had a very surprised look.

Strategies:

I updated the picture on the website.

BUSINESS PLANNING SERVICE Challenges:

Seemed like I could only do business within Tribal areas and not offTribal areas.

Strategies:

I still have not overcome that yet. We’re still working within our own Tribal areas.

EDUCATION NON-PROFIT Challenges:

Access to capital.

Strategies:

We have tried to find alternative sources. We have turned to private donations.

PLUMBING Challenges:

The customers are Caucasian and they assume that I don’t really know things.

Strategies:

Constantly answer their questions and being positive

BUSINESS CONSULTING

30

Challenges:

Being taken seriously

Strategies:

Participate in more organizations. Reaching out to other companies and really selling myself and hiring more seasoned talent.

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SECTION III. ACCESS TO CAPITAL One theme that surfaced throughout the interviews was the challenge associated with gaining 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 (27%).

Self-funding – Significantly more MBEs self-fund their business (27%) than non-MBEs (16% from 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% 44%

FUNDING FROM BUSINESS OPERATIONS

27%

SELF FUNDING

16% 15% 11% 11% 8% 5% 3% 3% 4% 3% 2%

BANKS - OTHER LENDING INSTITUTIONS

CITY/STATE/FEDERAL LOANS/GRANTS

CREDIT CARDS

INVESTORS/PARTNERS/FAMILY

DONATIONS/CONTRIBUTIONS/NON-PROFIT 0%

MBE S

10%

20%

30%

40%

50%

Non-Minority

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

* Significantly different at 95% confidenceCOMMENTS level betweenMADE MBE and NOTE: OTHER INDIVIDUAL BYnon-MBE 3% OR LESS Note: Other individual comments made by 3% or less not listed

ARIZONA MINORITY BUSINESS ENTERPRISE REPORT

31

STUDY FINDINGS

SECTION III. ACCESS TO CAPITAL

Significant Challenge – Half (52%) of MBEs said gaining access to capital was at least somewhat of a challenge (compared to 33% of non-MBEs).

Of those 52% 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., Do we really need the loan?)

Increased their marketing efforts Applied for government loans – e.g., PPP Found other financing

A total of 12% disagreed with the statement that they were “treated with respect when applying for a business loan.”

Chart 13 Gaining Access to Capital

GAINING ACCESS TO CAPITAL MBEs N=179

Non-MBEs N=477

Not a Real Challenge

Not a Real Challenge

41%

56%

Somewhat of a Challenge

26%

Don't Know

Don't Know

7% Significant Challenge

11% Somewhat of a Challenge

26%

32

U TA H 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

21%

Significant Challenge

12%

STUDY FINDINGS

SECTION III. ACCESS TO CAPITAL

ong top responses:

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

A M ON G T OP RE S PON S E S :

24%

CHA NG E D ATTITUD E INCRE ASE D M A R KETING

15%

A PPL IE D FOR G OVERNMENT LOA NS/ G RA NTS (E .G., PPP)

15%

FOUND OT HE R F INANCING

14%

E D UCAT ION/ L E A RNE D M ORE FROM OT HE RS A B OUT F IN ANCING

11%

SE L F F INANCED

10% 8%

CUT BACK E XPENSES B UILT UP CRED IT

7%

SOUG HT HE L P/ADVICE

7% 5%

CHA NG E D M A RK E T ING TARGETS

3%

DID N OTHING 0%

20%

40%

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

U TA H 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 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

Strongly Disagree

Disagree

10%

2%

Agree

44%

Don't Know

23%

Strongly Agree

21%

STEPS TAKEN TO GAIN ACCESS TO CAPITAL COMMENTS CEMENT COMPANY Worked harder to gain funding through other venues.

RETAILER I’m trying to learn more on how to navigate through things.

REAL ESTATE Borrow money from family and use my savings.

CAR AUDIO COMPANY Getting a PPP loan and using our personal money.

MANUFACTURING We went to the federal government to get a loan instead of locally.

BUSINESS CONSULTING Currently attending different seminars provided by the SBA and with the chamber of commerce.

34

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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: Elon Musk (7%) Donald Trump (5%) Marcus Lemonis (2%) Michelle Obama (2%) Among “categories” of potential advisors, business experts were mentioned most often: Business experts/advisors (17%) Politicians (9%) Friend/Family member (3%)

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

TOP MENTIONS

29%

DON'T K NOW/NO ONE

B US IN ESS EXP ERTS/A DVISORS CP A, IT, M&A , HR. SUCCESSFUL

17%

S PECIFIC BUSINESS LEA DERS

17% 9%

P OLITICIA NS

3%

FA MILY MEMBER/FRIEND

2%

CELEBRITIES 0%

10%

20%

30%

40%

*ALL INDIVIDUAL MENTIONS WERE LESS THAN 1% N=288

dual mentions were less than 1%

ARIZONA MINORITY BUSINESS ENTERPRISE REPORT

35

STUDY FINDINGS

SECTION IV. ROLE MODELS/RESOURCES

PEOPLE TO ADVISE BUSINESS 17 People to Advise Business Top Names Mentioned TOP Chart NAMES MENTIONED

7%

E LO N M U S K

5%

D O N A L D T RU M P

MARCUS LEMONIS

2%

M I C H E L L E O BA M A

2% 0%

5%

10%

NOTE: OTHER INDIVIDUAL COMMENTS MADE BY 1% OR LESS NOT LISTED

ther individual comments made by 1% or less not listed N= 288

36

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STUDY FINDINGS

SECTION IV. ROLE MODELS/RESOURCES

“IF YOU COULD HAVE ANYONE IN THE WORLD VISIT YOUR BUSINESS” COMMENTS… OFFICE EQUIPMENT SALES/SERVICE It would be nice to have the governor see what we do so we can to explain our concerns and our business model.

BAKERY Gordon Ramsey. He could help us with good tips and promotions.

CONSTRUCTION INDUSTRY A lot of work with Space X and Elon Musk would be perfect, He is a large supplier for us and would be good to be more involved in future projects and plans for us.

IT SERVICES Bill Gates because he started a tech business with no capital and no experience and was able to grow it into a multi-billion dollar company.

E-COMMERCE Famous Amos Cookie guy. He started a business during the time when being a minority own business was difficult due to discrimination, but he was able to preserve.

MEDIA PRODUCTION COMPANY Any investor or someone to take over the investor part of the business. Because that is the least fun for me.

U TA H 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 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 UTAH MINORITY BUSINESS ENTERPRISE INCLUDES: Median revenue was $182,142 in 2021.

Median staff size is 4 employees. (6 for non-MBEs) Median age of the business is 9 years old.

More than half are family-owned (58%).

Almost half (41%) are home-based businesses (26% for non-MBE) Half (51%) were women-owned businesses (32% for non-MBE) A total of 7% are not-for-profit (12% for non-MBE) More than open-third (40%) seek after government or private contracts as a source of revenue.

The top three industries MBEs work are Services, Construction and Accommodations/ Food Service.

WHO ARE THE CUSTOMERS? More than half do work in retail (56%).

Half do work with other businesses (B to B - 48%).

One-third (31%) 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). One-third (35%) of these firms conduct business outside of Utah and within the U.S. and 16% conduct business internationally.

Among those who work outside of Utah in the U.S. (besides online business): More than one-third work throughout the U.S. – i.e., multiple states throughout the U.S. (41%).

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STUDY FINDINGS

SECTION V. BUSINESS CHARACTERISTICS

Among those who work internationally (besides online business): Almost half service Europe (46%) 27% serve Canada 15% serve in multiple countries worldwide.

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 newer companies (years in business), and more likely to be home-based than non-MBEs. MBEs are more likely to do business with 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. (6)

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STUDY FINDINGS

SECTION V. BUSINESS CHARACTERISTICS

MBE BUSINESS CHARACTERISTICS MBE

Non-MBE

179

477

$182,142

$406,250

4

6

9 years

16 years

Family-owned

58%

49%

Home-based

41%

26%

Retail consumers

56%

61%

Business

48%

49%

Government

31%

22%

Conducts business internationally

16%

15%

Conducts business nationally

35%

41%

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 Chart 18 Customer Segments Served CHARACTERISTICS SECTION V. BUSINESS

CUSTOMER SEGMENTS SERVED

56%

RETA IL CONSUME RS

48%

BUSINE SSE S

GOVE RNME NT (C ITY, S TATE , FE DE RAL , M UNICIP AL ITIE S)

31% Chart 19 Type of Business

N=179

0%

20%

40%

60%

TYPE OF BUSINESS 28%

OTH ER SERV ICES ( EXCEPT PUBLIC ADM IN. ) CO N STRUCTIO N ACCOMO DATION AN D FOOD SERV IC E S PRO F ESSION AL SERV IC E S RETAIL TRADE MAN UFACTUR ING REAL ESTATE, REN TAL & LEAS ING HEALTH CARE AN D SOCIAL ASSISTANC E WHO LESALE TRADE TRANSPO RTATIO N AN D WAREHOUS ING A DMIN. SUPPORT, WASTE MGMT & REMEDIAT IO N AGRICULTU R E EDUCATIO N AL SERVIC E S F IN AN CE AN D IN SURA NC E UTILITIE S UNABLE TO CATEGO RIZE/REFUS E D

N=179

10% 9% 6% 6% 6% 6% 5% 5% 3% 2% 2% 2% 1% 1% 10% 0%

10%

20%

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30%

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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$182,142 $182,142 Median

$500,000 to $999,999

12%

$100,000 to $499,999

26%

$1M to $4.9M

12% $5M+

9%

Less than $100,000

40%

N=257 (29% did not report revenue) N=121 (29% did not report revenue)

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

Age of Business Age of Business Median 99 Years Median Years

6 to 10 years

22%

11+ years

35% 4 to 5 years

18% 3 years or Less

25%

N=172 (7 did not report business age) N=172 (7 did not report business age)

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STUDY FINDINGS

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

MBE SERVICE AREA

(BESIDES INTERNET-BASED BUSINESS) 39%

WITHIN NEIGHBORHOOD

46%

W I T H I N C I TY/ TOW N

49%

W I T H I N CO U N TY

57%

W I T H I N STAT E

35%

T H R O U G H O U T T H E U. S .

16%

I N T E R N AT I O N A L LY

N=166

0%

10%

20%

30%

40%

50%

60%

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 An=166 L A N D I N T E R N AT I ON A L B USI N E SSE S.

NORTHWEST 17% MIDWEST 10% SOUTHWEST 21%

NORTHEAST 7% SOUTHEAST 7%

ALL STATES 41% SAMPLE SIZE: N=58 THOSE WHO WORK OUTSIDE OF UTAH IN THE U.S. Sample size: n=58 Those who work outside of Utah 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

WO R L D M A P 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

27%

46%

ASIA

19%

MEXICO

15%

CENTRAL AMERICA

12%

AFRICA

4%

SOUTH AMERICA

15%

AUSTRALIA

4%

WORLD-WIDE

15%

SAMPLE SIZE: N=26 THOSE WHO WORK INTERNATIONALLY Sample size: n=26 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, are middle-aged, and have wide spread of political affiliations.

Characteristics of the owners of MBEs included: Most started the company (91%) Were born in the U.S. (66%) Half speak another language besides English (61%) o 61% speak Spanish (of those who speak a second (or more) language Average age of the owner is 47 years old.

Political affiliation: o Independent – 30% o Republican – 24% o Democrat – 17% o Other – 7% o No preference – 3% o Refused – 19% Education: o College graduate – 57% Owner’s median annual income in 2021: o $88,750 Compared to the general population – MBE owners were significantly more likely to have a college degree (22 percentage points higher) and had 20% higher annual income compared to the state’s median household income *.

2020 Utah education attained – 35% college degree owners in 2022

(7)

compared to 57% among MBEs

2020 Utah median household income – $74,197 (7) compared to the $88,750 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 Utah 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

S A MPL E SIZE

179

477

S TA R T ED COMPA N Y

91%

71%

47 years

52 years

57%

63%

$88,750

$96,786

Born in U.S.

66%

96%

Speak another language besides English

61%

27%

Independent

30%

24%

Republican

24%

33%

Democrat

17%

11%

Other

7%

3%

No preference

3%

4%

Refused

19%

26%

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 SIGNIFICANTLY 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.

Keeping employees, experiencing decrease in sales and having supply chain challenges were the top three challenges for both the HUBZone and non-HUBZone businesses. o

MBEs in HUBZones were more likely to mention being affected by drop in sales (37%) than non-HUBZone businesses (22%).

The top three strategies used by HUBZone businesses were changing marketing/ communication efforts, following CDC guidelines, making staff changes, and changing operations. o

MBEs in HUBZones were more likely to advertise (16%) than non-HUBZone businesses (5%).

CHALLENGES/STRATEGIES BEING A MBE HUBZone and non-HUBZone businesses appeared to experience relatively comparable levels of challenges – 53% could not thing of any challenges among HUBZone MBEs compared to 45% nonHUBZone MBEs. The most often mentioned top-of-mind challenge mentioned was being taken seriously for both groups.

(7% HUBZone MBEs compared 13% non-HUBZone MBEs).

HUBZone MBEs were more likely to say they “work harder” (46%) than non-HUBZone MBEs (23%).

Non-HUBZone MBEs were more likely to seek help/advice (17%) than HUBZone MBEs (4%).

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STUDY FINDINGS

SECTION VII. RURAL AND ECONOMICALLY DISTRESSED AREAS ACCESS TO CAPITAL

MBEs in HUBZones are more slightly more likely to feel gaining access to capital is a significant challenge (28%) than non-HUBZone businesses (15%).

BUSINESS CHARACTERISTICS

A comparison of the business characteristics of HUBZone MBE highlight that they tend to be smaller (lower revenue), more likely to be home-base and newer than non-HUBZone businesses.

BUSINESS CHARACTERISTICS

HUBZone/Non-HUBZone/HUBZone MBEs HUBZone

NonHUBZone

HUBZone MBE

187

489

43

$350,000

$390,909

$166,667

7

5

4

15 years

14 years

7 years

Family-owned

49%

52%

54%

Home-based

21%

33%

40%

Woman-owned

32%

38%

37%

35%

31%

37%

Conducts business throughout U.S.

40%

38%

33%

Conducts business internationally

13%

16%

10%

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 SIGNIFICANTLY 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

489

43

S TA R T ED THE COMPA N Y

68%

75%

86%

SPE A KS A SE COND L A NGUAGE

29%

34%

54%

COL L EGE GR A DUAT E

59%

62%

55%

54

53

52

$92,857

$99,167

$75,000

AV ER AGE AGE MEDIA N INCOME BOLDED FIGURES ARE STATISTICALLY DIFFERENT.

IMPLICATIONS Most responses by HUBZone MBEs and non-HUBZone businesses were similar. Compared to non-HUBZone businesses, HUBZone MBEs were more likely to: Experience significant decrease in sales during pandemic Advertise as a strategy during pandemic.

Be significantly challenged applying for loans.

Be significantly smaller (in revenue) and newer.

Overall, HUBZone MBEs appear to have been more severally affected by the pandemic than non-HUBZone businesses, at least in part due to their smaller size and more limited access to capital.

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STUDY FINDINGS

SECTION VIII. INDIGENOUS COMMUNITY/REMOTE TRIBAL COMMUNITIES

WestGroup was able to conduct 16 interviews with businesses in Indigenous Communities/Remote Tribal Communities in Utah 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: Keeping employees (4 of 16) Decreasing sales/loss of business (4 of 23) Their top strategies to survive/get through the pandemic were: Changed their marketing efforts (3 of 16) Changed staff (3 of 16) In addition, half received a PPP loan (56%)

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

Restrictive government regulations. It created an extra layer of work to comply with government regulations.

Strategies

Nothing really, I just work through the government regulations

HOTEL/BED AND BREAKFAST

50

Challenges:

Keeping staff. They worked for a week and quit or I will interview them and offer a job and they don’t show up the next day. I turnover 19 employees a month.

Strategies:

Used the Indeed app; used that to set up staff for all shifts

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STUDY FINDINGS

SECTION VIII. INDIGENOUS COMMUNITY/REMOTE TRIBAL COMMUNITIES

HOSPITALITY Challenges:

Getting customers in because of the travel restrictions and keeping people healthy and had to let go of some people

Strategies:

Applied PPP bailout and keep it going with minimal staff.

ACCESS TO CAPITAL Gaining access to capital among Tribal Community MBEs is clearly a significant challenge (7 out of 16).

A majority (10 of 16) currently finance their business from within the business or personal loans.

ADDRESSING CAPITAL ACCESS CHALLENGES COMMENTS CEMENT COMPANY Worked harder to gain funding through other venues.

HOME HEALTH CARE Used family finances and a personal lines of credit, Opened a personal credit cards instead of business credit cards.

AUTOMOTIVE REPAIR SHOP Kept working hard

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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, but none were considered significantly different.

AMERICAN INDIAN, INDIGENOUS COMMUNITY

MBEs

S A MPL E SIZE

16

179

MEDIA N NUMBER OF EMPL OY EE S

4

4

10 years

9 years

56%

40%

Conducts business throughout U.S.

56%

35%

Conducts business internationally

31%

16%

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

16

179

S TA R T ED COMPA N Y

88%

91%

SPE A KS A NO THER L A NGUAGE

40%

61%

55 years

47 years

67%

57%

$95,000

$88,750

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 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. The main difference was that MBEs in Tribal Communities seemed to have more challenges gaining access to capital, compared to other MBEs and non-MBEs.

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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.” (8)

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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

52%

A F RIC A N A MERIC A N

14%

A SIA N

14%

A MERIC A N INDIA N

9%

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

5%

O THER

3%

C. Rural and economically distressed areas – One of the focuses of the research was 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

58%

5 TO 9

20%

10 T O 19

12%

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

51%

WHO WAS INTERVIEWED FOR THE UTAH 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

67%

A DMINIS T R AT OR / M A N AGER

22%

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

6%

O THER

7%

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 of the 1,983 interviews from the three states have a margin of error of +/-2.2% at the 95% confidence level. The 676 interviews in Utah have 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 completed: Completed 179 MBE interviews (margin of error +/- 7.3 at the 95% confidence level).

Completed 477 non-minority business interviews (margin of error +/- 4.5 at the 95% confidence level).

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

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STUDY BACKGROUND AND METHODOLOGY

Completed 489 interviews with business outside of the HUBZones (margin of error +/- 4.4 at the 95% confidence level).

Completed 16 interviews with businesses with Indigenous Native American ownership.

Utah had significantly fewer minority businesses to contact for this study compared to the other states in the study. All sources of minority-owned businesses were used until sample was no longer available. For example, the total number of Utah MBEs with paid employees in the state as of 2018 were 4,866 businesses compared to Arizona’s 16,438.

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 Utah

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 Utah surveying began on April 1, 2022, and was completed on April 20, 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.

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

5.

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

6.

7.

8.

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, 2020 Quick Facts, https://www.census.gov/quickfacts/fact/table/US/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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STUDY FINDINGS

NOTES

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STUDY FINDINGS

NOTES

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