Clockwise from top left: Hector Castillo Carvajal, founder of Don Carvajal Café, LaParis Phillips, founder of Brooklyn Blooms and Israel Veliz, founder of City Tamale
At eBay, fostering inclusive entrepreneurship and fueling opportunities for small businesses to thrive are core to our purpose. Our eBay Foundation partners with nonprofit organizations that address and remove ongoing systemic barriers to entrepreneurship in historically underserved communities. Last year, the Foundation granted over $16 million to support communities and small businesses impacted by the pandemic worldwide, with many of those funds supporting entrepreneurs who are people of color, women, newcomers/refugees or are from communities already contending with generations of inequality. A recent collaborative survey between two of our 2020 grantees, Start Small Think Big and Small Business Majority, shows how these small businesses have been especially impacted by the pandemic —and shares how we can support their growth.
“Entrepreneurship is often the pathway for those who don’t have access to mainstream economic opportunities, such as people of color, immigrants, women, and those who are system-impacted,” said Jenny DaSilva, Founder and Executive Director of Start Small Think Big. “So the question is, how do we make that path as wide and clear and supportive as possible?”
Our nonprofit partners are helping provide those solutions. Small Business Majority provides a policy and research voice across the U.S., acting as a hub that connects small businesses to a variety of resources through their Venturize platform, whether it’s one-on-one technical assistance, community sources of lending capital or insight into current policy developments affecting small businesses. As a complementary partner in this entrepreneur-support ecosystem, Start Small Think Big is a direct service provider, offering customized technical support from highly skilled volunteers to micro-businesses (with revenue generally under $50,000) in underserved communities for legal, marketing and finance needs.
An Insightful Partnership
Surveying over 1,300 small businesses across the U.S. between November 2020 and January 2021, the nonprofits were able to gain insight into microbusinesses; over half had under $100,000 in annual revenue with 5 or less employees, and the majority were businesses owned by people of color or women. Typical data sets generally group all small businesses up to 500 employees, said Jenny, and often don’t take communities of color into account. “This is a problem because very large small businesses and microbusinesses are vastly different from each other. How they reacted to this crisis and what will support their long term resilience looks very different,” she said.
Overall, the data was a clear reflection of the pandemic’s impact, particularly in terms of equity; 65% of small businesses in the survey closed at some point over the past year, with over a quarter remaining closed for four months or more. Almost a third of all entrepreneurs of color found themselves behind in their rent or mortgage because of the impacts of the pandemic, 68% reported a significant sales decline and 70% reported a significant decrease in household income. These disparities highlight the need for more systemic and creative capital solutions — so that all small businesses can recover and grow.
Signs of Strength
At the same time, 85% of those surveyed were able to stay open in some capacity last year — and adapt to the new pandemic environment. “We saw a lot of resiliency, and I think what is so inspiring about small businesses in general is their entrepreneurial nature and their ability to pivot and change in the face of something that came as a complete shock,” said Brian Pifer, Vice President of Entrepreneurship at Small Business Majority. “We saw folks trying to meet customers where they’re at.”
With many people sheltering at home and brick-and-mortar businesses still shuttered or modified in terms of capacity, one of the main ways that businesses adapted was to move their services or goods online. The survey found that 41% had established or grown their online presence, 42% added new products or services, and 29% changed their business model entirely.
By shifting online, entrepreneurs were able to reframe and keep their businesses afloat. Since March 2020, Tammeca Rochester’s New York City-based exercise studio, Harlem Cycle Fitness Studio, has been closed to in-person classes. With financial and technical help from Start Small, Tammeca quickly created a new online platform, offering virtual classes, on-demand routines and other video events for clients. “No one gave me permission to open Harlem Cycle,” Tammeca said. “No one will tell me that I need to close it. I’ll continue to persist on.” The virtual offerings are now an integral part of her brand — and one that she plans to continue even after she opens back to in-person classes.
Another Start Small client, New York City-based LaParis Phillips of Brooklyn Blooms found herself in the opposite situation: during the pandemic, floral orders grew exponentially and very suddenly during COVID. She added an ecommerce layer, which was so successful that it enabled her to open another brick-and-mortar store. “Both of these women are excellent examples of the power of people seizing this moment, seeing what people in their community need, and responding,” Jenny said.
Highlighting a Path to Growth
There’s no question that ecommerce is now an integral and necessary part of general small business practice, and that it will continue to be so — a fact we also found through our recent 2021 U.S. Small Online Business Report. “People need to be able to do business online in order to move forward,” Jenny said. “eCommerce is not going away; it’s just added another layer of opportunity for people.” Tools, services and programs that help engender this growth will continue to be paramount, whether it’s individualized technical assistance, local networking opportunities or legal advice to help get businesses online.
Indeed, we recognize that this is important work that must be done on a broader scale to achieve true economic equity. “We all collectively need to double down and ensure that the resources we develop and the services we offer to these businesses are built with inclusivity in mind and are targeted at these communities that have been left behind even before the pandemic,” Brian said. “So as much as we can help these businesses get online and have the same opportunities to sell their product or service to a global audience, the more successful these communities will be — and the better off the country will be.”
To this end, eBay Foundation has committed $9 million to support Start Small Think Big, Small Business Majority and other grantees advancing inclusive and equitable entrepreneurship in 2021. In tandem, eBay Inc. will continue to support individual entrepreneurs on our marketplace through grant programs such as Up and Running. “eBay’s capacity to bring groups together is key,” Jenny said. “People cannot do this work by themselves. We need to collaborate to build this new ecosystem.”
Learn more about the Foundation and its impact-driven mission at ebayinc.com/impact.