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ADVANCING EQUITY

Small Business

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The following resource provides guidance to support civic leaders in advancing equitable community planning by applying Fourth Economy’s Equitable Community Planning Toolkit. The toolkit is designed to help you and your community become stronger and more vibrant through equitable planning practices. It includes a step-by-step framework to approach systems change plus resources, activities, and tools to help communities advance their equitable planning processes.

A Framework for Equitable Community Planning

Identify and Understand the Work

Identify and Engage Community Members

Identify, Evaluate, and Implement the Methods

Identify and Measure

Outcomes

Step 1

Establish a Baseline


Planning for equity in small business starts with developing an understanding of economic and business data to establish a baseline for comparing performance of a given group or sector against overall small business performance. This may begin with questions such as:


  1. Who owns and operates businesses within a given geography (i.e. municipality, county, region, etc.)?

  2. What businesses exist in a geography, broken down by sector?

  3. What is the percentage of small businesses within a geography, compared to the total amount of businesses in the area?


After establishing a business baseline, performing comparative benchmarking can further contextualize who owns these businesses and how that compares to other places. Comparing across business ownership characteristics such as race or sex can identify where equitable investment may be needed to assist more aspiring entrepreneurs. Additionally, comparing business counts over time can indicate patterns in business births and deaths, informing where interventions may be needed. 


Further identifying peer or aspirational geographies can help plot goals for the business ecosystem. These may include increasing the overall number of small businesses, the tenure of businesses, or the share of businesses owned by people of various Small Business Administration (SBA) identified categories: Women, Minority, Native-American, Veteran, or LGBTQ. 


As SBA and partners offer certifications and assistance for businesses owners of these identities, ecosystem leaders can serve as resource connectors for both existing and aspiring businesses owners while establishing a community baseline.    


Example


To establish a baseline of small business performance, it is crucial to first understand what questions you are trying to answer. In our work with Prosper, a Birmingham, AL-based nonprofit seeking to alter data from the Brookings Institute that showed Birmingham ranking last of 38 major metropolitan statistical areas (MSAs) in rate of Black business ownership, we ensured that the upfront questions that needed answering guided our baseline analysis. Prosper wanted to know: Who is involved in the small business ecosystem? What are organizations and individuals doing to better socioeconomic inequities? What are other cities doing in this space that strengthens their Black business ownership rate? How can we quantify a ‘good’ ecosystem? 


Reviewing data from sources such as the Annual Business Survey and County Business Patterns, we were able to come to a variety of early conclusions that served as the groundwork for the remainder of the planning effort. Data revealed that the largest share of Black business owners (28%) in Birmingham are within the Health Care/Social Assistance sector, and another 29% were lifestyle-oriented businesses. Data also spoke to perceptions of a lack of business growth. The number of Black-owned businesses in Birmingham did grow over the last decade, but the disparity in business ownership remains extreme. For every 10,000 metro residents, there are only 21 Black-owned businesses compared to 238 white-owned businesses. Achieving parity would see more than 7,000 additional Black-owned businesses in the metro.

Identify and Understand the Work

Deploy Inclusive Planning and Implementation 


Robust community and stakeholder engagement is another critical component in ensuring equity and transparency throughout a planning effort. Stakeholder engagement is an opportunity to further understanding  of a community’s characteristics, dynamics, issues, and unique circumstances. Further, engaging stakeholders can build trust and buy-in to the process and identify those individuals who will be catalysts for advancing proposed solutions.


In any effort relevant to government, nonprofit, or public-private matters related to economic development, it is a best practice to cast a wide net through stakeholder engagement. Potential groups to engage include:


  • Local residents

  • Existing and potential tourists 

  • Government officials

  • Nonprofit and business leaders

  • Individual artists, creatives, and outdoor enthusiasts

  • Advocacy groups


Avenues of stakeholder engagement differ per circumstance. While some areas may respond well to town halls, opportunities for public comment, and educational speaker series, others may covet smaller focus groups and user-centered ideation sessions. It is important to always have a pulse on the best way to engage with any given community, and adapt when some engagement methods prove unsuccessful at first. The goal should always be to get the necessary feedback a planning effort needs to be truthful and holistic; this requires engagement across stakeholder groups, demographics, and income brackets. 


Example


In Fourth Economy’s work with Prosper, 25 interviews with individual stakeholders helped set the scene for some of the history and causes behind Birmingham’s low rate of Black business ownership. Generations of systemic racism and racial stratification, disparities in quality of life and place across neighborhoods, and access to critical resources such as capital and storefront space all proved to be limiting factors in Birmingham achieving any sort of equity. Stakeholders ranged from business owners to funders, civic leaders to community advocates. 


With this information in hand, the planning effort moved to conduct multiple ‘Build Sessions,’ Fourth Economy’s ideation sessions that have those who experience issues first-hand participate in the activity of building solutions. On top of this, numerous stakeholders participated in a ‘Vision Session’ to outline an achievable vision for Birmingham’s path towards solving this generational issue. The final vision served as the organizing principle of the project’s final deliverables:

“As an ecosystem, we hold a vision of Birmingham that is equitable, inclusive, and eager to support its greatest asset, its people. We strive to create an impact that will provide pathways of opportunity for entrepreneurs, both present and future, resulting in generational wealth and long-term progress for our community. We hold a shared perspective as we push forward towards our shared destiny — an economically prosperous destiny, opportunity dense, and equitably owned by all in our community.”

Identify and Engage Partners

Anchor 2

Identify, Evaluate, and Implement the Methods

Develop Strategies to Advance Equitable Development


Feasible strategies for achieving success are the ideal outcome of any planning effort. However, no strategy is finalized until there have been a variety of iterations which consider the impacts of  potential solutions, considering their needs for successful implementation, and discussing these action-items with a representative group of stakeholders who may be involved or affected by new programs, policies, and recommendations. Any plan’s final recommendations are meant to maximize impact that is achievable within various timeframes – actions that have failed in the past, have no public support, and will not create the intended outcome should be put on the chopping block in this drafting phase. 


When ensuring strategies will advance equity, it is key to put humans first. Any organizational leader, elected official, or other planner should always ask themselves:


  1. Who will this recommendation affect? 

  2. What will be the impact of this recommendation on numerous demographics?

  3. Does this solution work for disadvantaged members of our population?

  4. How will community members react to this idea?


Example


Human-focused solutions help ensure that a plan’s recommendations can be not only impactful, but equitable for populations who have perhaps been negatively affected by prior planning efforts, programs, and policies. For Prosper, the task of crafting solutions proved immensely tricky considering the city’s history of racial inequities and modern context of disparities in business ownership and numerous social indicators. The plan’s recommendations, broken down by timeframe, end up creating three primary avenues for impact, examining how the business support ecosystem, the local and state governments, and metropolitan community of Birmingham as a whole can work to shift a longstanding issue of business ownership disparities. Actions for this plan include:




Anchor 3
Anchor 4

Identify and Measure Outcomes

Measure Effectiveness of Interventions by Tracking Indicators


A variety of metrics can assist communities and their planners in achieving solutions and practicing accountability and transparency. Setting clear metrics for success, along with publishing consistent updates on the performance of these metrics via social media posts, public presentations, and data dashboards, helps all stakeholders stay in the know on the progress specific actions are making in catalyzing an impact. 


Often, the Fourth Economy team likes to pull metrics that are easy for clients to track internally, such as the Census American Community Survey or Quarterly Workforce Indicators. These data sources allow for clients to consistently check-in to their performance according to certain metrics not only in their own jurisdiction, but also compared to other benchmark communities. 


Example


Prosper’s organizational goal to create more equity in business ownership across Birmingham yielded a variety of complex actions needed to overcome generations of inequity in economic opportunity and socioeconomic mobility across races. After Fourth Economy honed in on key strategies for making an impact on this goal, 6 key focuses were identified to track metrics of success. These focuses, and the metrics used to comprehend success, include:




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