The American Dream for many people means starting a business and working for themselves. That’s a good thing because small businesses form the backbone of our economy.

According to recent statistics from the U.S. Small Business Administration, 99.9% of American businesses are small and employ 45.9% of American workers, or about 59 million people. Small businesses have accounted for 65.3 percent of net new job creation. There are 34,752,434 small businesses in the U.S. compared to 19,688 large businesses. In fact, most of the biggest of big companies started as small businesses.

Yet, successfully operating a small business isn’t an easy proposition. Unless you’re well connected or are supported by generational wealth, it can be hard to get the collateral needed to open a business or to sustain it during difficult times. Entrepreneurs without adequate funds from personal savings, family, or friends, have to get bank loans or have to seek and secure equity financing by selling shares in their company, exchanging some of their ownership of the business to new investors for cash.

Most of us aren’t aware of how many business establishments open and close each year. It’s a lot. In 2022, 1.4 million business establishments opened in the U.S. for the first time, and about 1.2 million establishments closed permanently. On average, almost 70 percent of new businesses survive at least two years, but less than 50 percent make it to five years and only 25 percent make it to 15 years. Obviously, while it’s not easy to start a business, it can be equally difficult to remain operational.

Even though support for minority-owned businesses began in 1969 when President Richard M. Nixon established the Office of Minority Business Enterprise, it took longer for women business owners. While we see many more women-owned businesses today than in the past, it’s important to recognize this is a relatively new phenomenon. That’s because before President Ronald Reagan created government support for women business owners by signing the Women’s Business Ownership Act into law in 1988, women had to deal with hurdles like needing a male co-signer to secure business loans.

Although that obstacle has been removed, according to some reports, women and members of minority groups are still more likely to face higher startup costs and to be denied bank loans. Many are more likely to invest their own money and resources into their businesses, taking on more personal financial risk than other owners.

Our government recognized these issues as particularly acute barriers for women and members of minority groups. That’s why the Minority- and Women-Owned Business Enterprise (MWBE) certification concept was created.

Earning MWBE certification is well worth the effort. It can open a wealth of opportunities, including the potential for contracts with federal agencies, state and local governments, and certain large corporations that designate a percentage of contracts specifically for certified small businesses. It can also open doors to networking, training, and educational programs for small business owners, and access to special perks like marketing opportunities and government grants, which can offer crucial financial support for growth and expansion.

The application takes time to complete, usually at least three to four weeks, and the review process can take nine to 12 months or longer. However, it’s well worth it. Not only can businesses qualify for reduced tax liabilities for projects funded with federal or state grants or receive tax incentives, but the federal government often offers tax incentives to businesses and states that work with minority or women-owned businesses. To learn more about the certification process and contracting opportunities send an email to MWBECertifications@esd.ny.gov.

The Northern Chautauqua Community Foundation’s Local Economic Development committee believes small businesses are the backbone of our local economy and supports consequential programs and agencies open to all Minority and Women Owned Businesses in Western New York including the New York State MWBE program and the Empire State Development’s Division of Minority and Women’s Business Development.

Patty Hammond is Economic Development Coordinator at the Northern Chautauqua Community Foundation. The Local Economic Development (LED) Initiative is a standing committee of the Northern Chautauqua Community Foundation (NCCF). Send comments or suggestions to Patty Hammond at phammond@nccfoundation.org