One of the most important ways for small businesses to access capital is through connections to resource networks. Business networks are the set of arrangements and information platforms that business owners use to increase exposure and sales, gain knowledge of their markets, develop financial management skills, and familiarize themselves with sources of financing. Networks can also connect people to other service providers, such as nonprofit organizations and professionals that support business owners through technical and financial training, referrals, legal services and procurement opportunities. For example, the Small Business Administration (SBA) supports intermediaries such as Small Business Development Centers, SCORE (Service Corps of Retired Executives), and other resource partners that help potential business owners develop business plans and understand where to get the appropriate capital for their businesses. Resource networks may also involve coordinated actions between businesses and the communities in which they operate, such as initiatives whereby business owners support programs like crime prevention, clean-up, and beautification that improve the local business environment. In addition, networks may involve business-to-business linkages facilitated by local institutions or developed though business contacts. In many ways, the city of Detroit is a resource-rich place. By one count, thousands of programs exist to connect small business owners to legal, financial, managerial and marketing expertise, as well as to formal and alternative financing sources. A number of foundations, local planners, and nonprofits are investing in strategies to support knowledge sharing and referrals between institutions that provide such services to small businesses. Since 2008, an important part of this vision has involved the creation of a three-and-a-half mile ‘innovation corridor’ of entrepreneurial services (between the Downtown area and the Woodward Corridor in Midtown) to promote synergies between business development intermediaries. The network includes organizations that provide training to business owners, those that produce ideas and intellectual property, and those that fund small businesses. By providing a road-map to the services offered in the community, the goal is to help entrepreneurs better understand the services and capital available to them.
In spite of these opportunities, black business owners in Detroit report having relatively less access to resources and information than other minority groups. In a survey by New Detroit of minority-owned businesses in Southeast Michigan, business owners report that one of the most important impediments to their business is the lack of networks (ranking it as important as financing and macroeconomic issues). It is unclear whether the lack of networks expressed by minority business owners is due to a lack of knowledge and information about what is available, inadequate supply of resources, or some other reason.
Please download the entire publication to see any charts, tables, sources, or notes included in this article.