Small business owners cherish their independence, but they can also use outside advice and technical assistance to be successful—or simply to survive a crisis like the pandemic. And that's where business development organizations (BDOs) come in. LISC BDO partners link their on-the-ground networks and insight with LISC’s national scale, funding and expertise to support small businesses, in the midst of COVID, and for the future.
America’s millions of small businesses are essential to the country’s functioning and to its diverse ways of life. They create jobs and keep consumer dollars circulating within local economies. Along with goods and services they bring distinctiveness and variety to Main Streets both urban or rural. And while it’s no small feat to create a thriving business in the face of structural inequities, independent entrepreneurship is the vehicle by which many people of color, women, and immigrants build wealth for their families and communities.
With independence, of course, comes risk. The coronavirus pandemic has had a harsh and disproportionate impact on the country’s smaller businesses, especially restaurants and nightspots, retail shops, and providers of personal services including neighborhood barbershops and beauty salons—and particularly among enterprises owned by people of color. In one survey of small business owners taken early in the pandemic, more than half said if the COVID crisis lasted four months they didn’t expect to be in business by the end of the year.
Small businesses can’t be expected to go it all alone. They may need support to get on their feet and grow in normal times, and to weather economic shocks like the COVID pandemic. That’s where a lesser-known entity comes in: the business development organization, or BDO.
Since the pandemic began in March 2020, LISC has deployed nearly $240 million in grants to buoy the suffering small-business sector, with dedicated support from partners including Lowe’s, Verizon, U.S. Bank Foundation, Sam’s Club, Truist and many others who have contributed to our COVID-19 relief and recovery efforts. Those investments include direct grants to some 16,000 small businesses, money that may help proprietors cover rent and utilities, pay employees and suppliers, or mount an online marketing campaign. And it includes $5 million in assistance to some 130 BDOs across the country that since the onslaught of COVID have been running on all cylinders to address sharply increased demand for advice and resources.
These BDOs come in all shapes and sizes. Some have ample staffs and serve businesses across a city or region. Some are tiny and work with enterprises in their immediate neighborhood. They provide a range of services, from help accessing affordable capital to free guidance in the nitty-gritty of business planning, cash-flow management, marketing, and staffing. Some incubate small businesses by offering low-cost commercial or manufacturing space.
All are longtime, trusted partners of LISC. And all possess strong connections to local businesses and a keen understanding of their local markets.
“These BDOs provide very geographic- and demographic-specific services that are culturally competent, that are in the language that people are used to,” says Elizabeth Demetriou, national program director for economic development at LISC. “Businesses trust them, know how to reach them; they understand their local BDO can connect them with all kinds of expert business assistance. And in the pandemic, we wanted to make sure that funders are not only supporting immediate relief but are really building the infrastructure on the ground that’s necessary for recovery.”
Indeed LISC has long taken a systems approach to economic development in disinvested communities, aligning and layering three types of investment: support for individual businesses, support for the BDOs they rely upon, and support for their larger business ecosystems. The latter is a years-long effort that might include developing real estate, helping communities beautify and brand their commercial corridors, and sharing information and forging helpful connections among local businesses, BDOs, government entities, and grassroots organizations.
BDOs are especially critical to advancing economic justice. LISC prioritizes those that focus on tackling structural barriers to promote more equitable opportunity for business owners of color, women entrepreneurs, owners from immigrant and refugee communities, and those with low or moderate incomes.
“It’s not about the short term,” Demetriou says of LISC’s small-business program. “It’s not a transaction, ‘here’s a grant.’ It’s about meeting you where you are now and supporting you as you recover, retool, and hopefully grow.”
To see what that looks like in action, we have profiled LISC-supported BDOs that are nurturing the aspirations of Black-owned businesses in Atlanta, small food producers in rural western Massachusetts, and restaurants and retailers in diverse neighborhoods along the light rail serving Arizona’s largest metropolitan area:
Small businesses create the texture and flavor of life along the light rail line that passes from Phoenix through the neighboring cities of Tempe and Mesa in Arizona’s Valley of the Sun. To the east of downtown Mesa with its eclectic shops and eateries is a district of Latinx businesses, and to the west a concentration of Asian stores and food spots. On Apache Boulevard in Tempe one finds a foodie’s delight of Middle Eastern grocers, bakeries, and restaurants.
When restaurants and universities closed due to COVID-19 in March, the market for many small food producers in rural western Massachusetts shifted overnight. Caroline Pam and Tim Wilcox, proprietors of Kitchen Garden Farm, had been growing organic vegetables in Sunderland, MA, for 15 years. The couple quickly reached out to a handful of other local producers—“our closest Sunderland farmer friends,” Pam says. Together they came up with an ingenious solution.
Today’s Atlanta surely hints at the promised land its native son Martin Luther King Jr. talked about more than half a century ago. Capital of the so-called New South, Atlanta is a majority-Black global city, widely celebrated as a font of Black talent and achievement in the realms of higher education and business, culture and politics.