America DeLoach founded Salsa Don Sebastian in Richmond, Virginia, in 2016, selling salsa based on her mother-in-law’s recipe. She now has products in roughly a dozen stores in Central Virginia but has hit roadblocks when trying to expand her business. 

“Being an entrepreneur is really hard,” DeLoach said. “It’s like you’re on an island by yourself and you have to figure out how to catch the fish and how to climb the tree to get some coconut, and there is no one there you can ask for help.”

DeLoach isn’t alone in sometimes feeling baffled, but there are people who can offer help, said Floyd Miller, President of the Metropolitan Business League, a nonprofit association that fosters small business development in central Virginia. MBL is a key player in Richmond’s business ecosystem, which is the network of public, private and nonprofit stakeholders who offer funding, guidance, market support and professional services to local business owners.

“There is a strong ecosystem” in Richmond, Miller said. “But we need to be intentional in strengthening it…and making sure we do a better job of working collaboratively and sharing information.” 

That ecosystem is a critical factor in helping small businesses grow, scale and build wealth, but many are not taking advantage of the opportunities or are unaware they exist. 

Black entrepreneurs in Richmond reach out to support organizations less often than white entrepreneurs, according to early findings from a study by Elsie Harper-Anderson, Associate Professor and Director of the PhD program at Virginia Commonwealth University. Respondents said they were not aware that these resources existed or did not get what they needed when they reached out in the past. Meanwhile many white entrepreneurs have the opposite problem, reporting an overwhelming amount of information and difficulties determining how to use all the available resources. 

A recent Capital One Insights Center report, conducted in partnership with Boston Consulting Group, found similar results: Black and Hispanic business owners in Richmond experienced less access to initial capital, growth funding, markets and support networks than their white counterparts. Without those same supports, many have a harder time navigating available financing and resources. 

“White and Black entrepreneurs are having very different experiences in the Richmond ecosystem and that’s something we should all be concerned about,” Harper-Anderson said.

_{Business owners and ecosystem partners attend the May 2023 “Create, Grow, Scale: Black and Hispanic Entrepreneur Convening,” hosted by Capital One and Virginia Commonwealth University, in Richmond, Virginia.}

Working together to strengthen Richmond’s business ecosystem

The Capital One and Boston Consulting Group report offers other recommendations for strengthening business ecosystems, including connecting to Black and Hispanic businesses earlier in their life cycles, avoiding crowding the market with the same services provided by others and offering targeted skills training. The report also emphasizes the importance of coordination among various ecosystem actors.

“In Richmond, we found that the coordination across organizations needed more attention,” said Kedra Newsom Reeves, Managing Director and Partner at Boston Consulting Group. “It was hard for organizations to reach businesses at the right point in time…and also difficult for the entrepreneurs to navigate that local ecosystem of supports.”

Harper-Anderson observed the same lack of connectivity in Richmond when she interviewed ecosystem actors, noting that greater collaboration and unified leadership can create a stronger ecosystem. “There seemed to be a lot of pots on the stove cooking, but in their individual spaces, without a lot of connectivity.”

The need for better coordination isn’t lost on many of the community partners in Richmond.

“All of us who play a supportive role in the business ecosystem need to work together,” said Rasheeda Creighton, President and CEO of the JWC Foundation, a nonprofit organization working to build sustainable Black-owned businesses. “We need to understand each organization’s priorities and each other’s programs so that we can do more warm handoffs between our clients.”

To improve coordination, Miller, Creighton and leaders at several other organizations that support local entrepreneurs of color have begun meeting quarterly. Together, they are creating a roadmap that clearly identifies each organization’s respective services and areas of expertise, both to better orient local business owners to the range of available supports and to better organize themselves.

“We are really trying to educate each other on what we do as an organization, because a lot of times we don’t really know what services or resources the other organizations have, which we need to know in order to make the right referrals when a business owner needs assistance,” Miller said.

In doing so, he added, the organizations are also concluding that “we are more powerful together and can increase our capacity by finding ways to partner more and compete less.”

About the Capital One Insights Center

The Center combines Capital One research and partnerships to produce insights that advance equity and inclusion. As a nascent platform for data and dialogue, the Center strives to help changemakers create an inclusive society, build thriving communities and develop financial tools that enrich lives. The Center draws on Capital One’s deep market expertise and legacy of revolutionizing the credit system through the application of data, information and technology. 

Disclaimer 

This material has been prepared by the Capital One Insights Center, a non-partisan center for objective research and insights, and is provided solely for general information purposes. Unless otherwise specifically stated, any views, analysis or opinions expressed herein are solely those of the Capital One Insights Center’s staff, researchers and listed partners (if applicable) and may differ from the views and opinions expressed by Capital One Financial Corporation, other departments or divisions of Capital One Financial Corporation, or its affiliates and/or subsidiaries (Capital One). Information has been obtained from sources believed to be reliable. 

Analysis and conclusions constitute the Capital One Insights Center’s judgment as of the date of this report and are subject to change without notice. Furthermore, the analysis and views will not be updated or otherwise revised to reflect information that subsequently becomes available or circumstances existing, or changes occurring, after the date of publication. 

Any opinions expressed herein should not be construed as an individual recommendation for any particular customer or client and is not intended as advice or recommendations of particular securities, financial instruments, market conditions or strategies. Capital One Financial Corporation and its affiliates and/or subsidiaries may issue reports or have opinions that are inconsistent with, and reach different conclusions from, this report.