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Ezenwayi Amaechi Ejiribe[/caption]
The story plays out every day. An industrious woman – an “entrepreneur by necessity”– starts a business because she has no other income potential. She juggles children, a household, a low-paying job, and now a side hustle.
Despite her hard work, she struggles. With no seed funding, roadmap or friends and family to invest in her business, her likelihood of success is low, and highly correlated with factors we call the “social determinants of business.”
According to the World Health Organization, “social determinants of health” are nonmedical, social and structural conditions – including safe housing, education and nutritious foods – that influence health outcomes.
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Julie Sullivan Owens[/caption]
The social determinants of business are a parallel construct with an undeniable effect on an entrepreneur’s likelihood of success. Those determinants include:
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Generational wealth. For each $1 in wealth possessed by white families, Black families have 12 cents and Latino families have 21 cents, according to the Economic Progress Institute. Sixty-five percent of entrepreneurs rely on personal and family savings to fund a startup, says a 2019 report by the Ewing Marion Kauffman Foundation. So those without “friends and family” investment must tap into less-forgiving sources of capital.
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Connections. The Igbo language says, “Onye nwere mmadu ka onye nwere ego” – “A person with a vast network is better off than an individual who only has money.” Those with a network cultivated over generations – through elite education and robust resources – can see greater success as a result of these connections.
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Quality education. Business training can catalyze success, leading to increased sales, profit, ability to secure capital, and innovation.
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Structural racism and discrimination. These systemwide conditions directly impact access to opportunities and resources. This can impact the inability of micro-businesses to secure loans due to systemic biases.
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Culture and language. A business owner’s success is dependent on the ability to communicate effectively with customers, suppliers and partners. Those not fluent in English, spoken by over 91% of Americans, can struggle to access support and funding, and sell to a broad mix of customers.
A disadvantage in any social determinant of business can be a “make or break” factor, and programs that address these realities are an investment in a stronger, more just and resilient economy.
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Outposts. Every economic development organization needs to bring services to ZIP codes with low to moderate incomes. A small-business hub can offer “business clinics” that play a role like urgent care does in the health care system, enabling those with a specific need to plug into an ecosystem of support. Social Enterprise Greenhouse’s Grow program offers such services in Woonsocket, Central Falls and Pawtucket.
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Shared services. Small-business owners wear many hats, from bookkeeping to marketing to information technology, so a pool of fractional/contract resources would be a tremendous way to outsource non-core tasks.
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Child care. As two working moms, we understand the complexity and fragility of our care economy, the sector that provides care for children, the elderly and people with disabilities. A state-led initiative to bolster care co-ops could increase the supply of child care providers and introduce a less-expensive option to working parents.
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A “one-stop shop.” The myriad of government agencies, business support organizations and nonprofits offering resources for small businesses is nearly impossible to navigate. The R.I. Department of State’s RI Business Assistant is a positive step. Such tools can enable small businesses to access available programs, increasing the likelihood of success.
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Mentors and networks. We all need to be mindful of who has “a seat at the table.” Representation matters. When in a meeting or a networking event, observe the composition of the room. When there is a lack of inclusion, open your circle to those who may not have the benefit of an invite. Mentorship can break cycles of disinvestment.
Rhode Island’s Health Equity Zone initiative has seen a 21% reduction in social vulnerabilities that adversely impact health. SEG champions policies and programs that bring this same intentional approach to the business community. In doing so, we can make our state’s motto – Hope – a reality for the underserved and underestimated entrepreneurs seeking to create economic prosperity for their families and communities.
Ezenwayi Amaechi Ejiribe is a professor and faculty/applied learning coordinator, Master of Public Health Program at Johnson & Wales University. She is also the founder and executive director of Micro Enterprise Social Entrepreneurship – MESENow. Julie Sullivan Owens is CEO of Social Enterprise Greenhouse.
