Black and ethnic minority businesses need support to overcome pandemic

The coronavirus pandemic has highlighted the underlying inequality that ethnic minorities face in the UK. In England, the two mortality rate and hospitalization rate are more than twice as high for blacks or people of South Asian descent as for whites.

Poorer COVID-19 scores among black and Asian populations are a result of underlying social and economic risk factors ethnic minorities face, such as living in overcrowded housing, being employed in less skilled jobs and more risky, have poorer access to health care, let alone structural racism.

But among these well-documented racial inequalities, there is another hidden story: the specific plight of Black, Asian and Ethnic Minority (BAME) business owners who have also been disproportionately affected by the pandemic.

Specific challenges

During the first foreclosure in March, many businesses in the UK temporarily closed with the majority of those who were able to operate doing so at reduced capacity with lower turnover. This has had important implications for BAME-owned companies, which are traditionally concentrated in the sectors those most affected by the lockdown such as retail, health and social care, education, restaurants and accommodation.

Ethnic minority businesses are more likely to be concentrated in sectors affected by the foreclosure.
Stefan Rousseau / AP

Before the pandemic, BAME business owners were less likely than non-BAME business owners to get into the mainstream business support and at the onset of the coronavirus, nearly two-thirds of BAME business owners felt unable to state supported access loans and grants, leaving many on the brink of financial ruin.

The economic crisis these companies are facing is compounded by the fact that they are more likely hire a significant number of BAME employees and attract more BAME customers. The significantly higher risk among these groups of COVID-19 implies that these companies would have had to incur considerable costs to protect their staff and customers.

COVID-19 has also exacerbated pre-existing disadvantages in the business sector. Although there are a few exceptions, BAME entrepreneurs have on average lower success rates to start businesses and see less success overall compared to other entrepreneurs.

Black business owners have special experience worst results than their white counterparts. Last year, black business leaders in the UK achieved a median turnover of £ 25,000, compared with £ 35,000 for white business leaders. The median productivity of black business owners is also less than two-thirds of that of white business owners, and only half of black entrepreneurs meet their non-financial goals, compared to nearly 70% of white entrepreneurs.

Our research

To help better understand how COVID-19 has affected business owners, we are currently request UK entrepreneurs on their experiences with the pandemic.

So far, we’ve found a range of options that many BAME-owned companies have used to cope with these uncertain times. These include raising the prices of certain products to cover the cost of complying with new regulations, adjusting operations to accommodate social distancing, adopting new technologies to facilitate day-to-day business activities and to fully engage in new business activities.

A hairdresser cleans the chair in a barber shop.
Business owners have made significant changes to keep their customers safe.
Dominic Lipinski / AP

Adaptability and scalability have been crucial in keeping BAME-owned businesses afloat during this pandemic, especially as restrictions have become localized and three-level locks were introduced.

Despite this tendency to adapt to changing times, some BAME business owners have reported that their clients have stayed away for fear of contracting the virus due to the higher death rates reported for their ethnic groups. .

How the government can help

We need to appreciate the concrete actions that BAME business owners have already taken to protect their clients and staff during this time of crisis. But the government can do more to protect individuals from adverse effects on health and the economy.

State-backed grants and loans should be made more accessible as an incentive to business owners who have incurred additional costs to protect clients and staff. Above all, the process to obtain them should not be too onerous, which may deter people from applying. Regional governments should also ensure that BAME companies are plugged into the supply chains of local projects in response to the pandemic.

As a community, we need businesses to get through this pandemic in one piece, and we need to help protect those who are most at risk. This means working specifically with BAME business owners in creative ways to ensure their survival.

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