Closing Indy's business gaps
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The City of Indianapolis is conducting a year-long disparity study to clear the roadblocks standing in the way of minority and women-owned businesses.
Why it matters: Indy's Black-owned businesses are booming with year-over-year growth that eclipses the national average, but experts say challenges related to access and capital keep these enterprises from reaching their full potential.
Driving the news: The Office of Minority and Women Business Development, in conjunction with BBC Research & Consulting, is leading the city's first disparity study in five years.
- The focus of the study is to encourage the participation of minority and women-owned businesses in state contracting and create a fair, competitive, and equitable environment for those businesses.
What they're saying: "Part of it is access to opportunity and how to navigate the system. And once you get an opportunity, can you afford to keep it?" said Marshawn Wolley of Black Onyx Management, a partner to the city in this effort. "What we're going to be trying to do is understand the true barriers that are happening in the market."
Flashback: The previous study conducted in 2019 and released the following year was a nearly 850-page document that found minority and women-owned businesses were behind in categories like mentorship, contract dollars and education.
Inside the room: Wolley said the results led the city to overhaul its business development program to be more impactful. For example, Indy improved its supplier diversity program by clarifying that a "good faith effort" in trying to identify MWBE businesses needed to be documented.
- The Office of Minority Women Business Development is also now empowered to withhold payment, disbar a contractor from participating in future bids or terminate an agreement if found to be noncompliant.
- "They changed the program based on the disparity study. They got more involved in gap financing. They revisited payment terms, because that was something that was big," Wolley told Axios. "This is an opportunity to raise any issues, but also affirm the things that you like whether you're an XPE or just somebody doing business with the city."
State of play: The number of Black-owned business openings in the Indianapolis area grew by 59% in 2023, the third-highest in the nation, according to Yelp data.
- That outpaces the national year-over-year increase of 24% for Black-owned businesses.
- Yelp found that much of the Black-owned business growth is in the areas of travel, home services, local services and automotive services.
Reality check: The Annual Business Survey found that only about 3% of U.S. businesses were Black-owned in 2021 and accounted for just 1% of gross revenue from all classifiable companies that year.
- The survey estimated the percentage of Black-owned businesses in Indiana was between 1% and 3% during that time.
What's next: The Office of Minority and Women Business Development is holding two public meetings next week to gather feedback and establish a five-year recurring cycle for such evaluations.
- Wolley said the entire process will take about a year to complete.
If you go: The meetings are at 10am and 3pm Tuesday at the downtown Indianapolis Public Library, 40 E. Saint Clair St.
- Interested residents can also attend virtually by registering here.