The majority of businesses in the United States are small businesses, responsible for 44% of the United States’ economic activity. Many of these small businesses are run by Asian Americans, existing in a diverse array of industries. However, some of these businesses face challenges, such as a lack of financial resources, racism, and limited business connections, which are unprecedented by others.
One of the main reasons why building a business is difficult is the finances required to kickstart the endeavor. Some business owners need to take out loans from banks to secure the capital required to start up or maintain operations. However, some Asian Americans find difficulty acquiring the financial support required to expand their business because of language barriers, unfamiliarity with financial systems, or discrimination. Due to these struggles, Asian-American business owners may find it difficult to maintain or scale their company.
With the prevalence of racism in the United States, Asian-American business owners have faced difficulty being accepted by their community. Especially with the COVID-19 Pandemic, anti-Asian sentiments have surged, leading to a decline in customers for Asian-owned businesses. Without customers, businesses are unable to continue their operations, forcing them to declare bankruptcy.
Based on a study on the effects of COVID-19 on Asian-American businesses, the anti-Asian sentiment from the pandemic cost Asian restaurants $7.42 billion in lost revenue in 2020. This significant decline has been detrimental to Asian-American businesses.
Furthermore, having business connections and networks will drastically ease the process of starting a business by having people to learn from and partner with. However, because many Asian-American entrepreneurs are immigrants entering a new world, they have few connections and find difficulty establishing professional networks to help them. This isolation from resources such as mentorship, partnership, and insight makes it significantly harder to navigate the competitive business landscape.
Despite the countless hurdles, Asian-American businesses make up approximately 10% of all businesses in the United States, with a significant increase from the past. Even through challenging times, many Asian-American small businesses have demonstrated remarkable resilience, continuing to find more success in their respective industries.