UTAH Minority Business Enterprise Study Report (2022) by ARIZONA HISPANIC CHAMBER OF COMMERCE

UTAH STUDYENTERPRISEBUSINESSMINORITYREPORT 2022

1MINORITY BUSINESS ENTERPRISE REPORT UTAH 2022 UTAH STUDYENTERPRISEBUSINESSMINORITYREPORT 2022 PRESENTED BY Arizon A Hisp A nic cHA mber of c ommerce f ound A tion FUNDED BY u . s . d ep A rtment of c ommerce m inority b usiness d evelopment Agency c oron Avirus r esponse A nd r elief f und RESEARCH CONDUCTED BY West g roup r ese A rc H

2 UTAH MINORITY BUSINESS ENTERPRISE REPORT ENDORSING ORGANIZATIONS Arizon A Hisp A nic cHA mber of c ommerce found A tion RESEARCH TEAM Glenn Iwata West g roup r ese A rc H Katy Gallert West g roup r ese A rc H Mon I ca S. V I llalobo S Arizon A Hisp A nic cHA mber of c ommerce c atal I na Perez Arizon A Hisp A nic cHA mber of c ommerce c er I la Ga I ll I ard o rc H estr A ting y our s uccess Kaaren- l yn Gra V e S A i A nn H* p roject n A bedc PRODUCTION TEAM c ar M en G. Mart I nez Arizon A Hisp A nic cHA mber of c ommerce ACKNOWLEDGMENTS *AMERICAN INDIAN, ALASKA NATIVE, & NATIVE HAWAIIAN (AIANNH)

UTAH MINORITY BUSINESS ENTERPRISE REPORT 3 STUDYSTUDYCONCLUSIONSSTUDYACKNOWLEDGEMENTSHIGHLIGHTSOVERVIEWFINDINGS SECTION I. Challenges/Strategies – COVID Pandemic BUSINESS PROFILE – Nanoshell Company; Owner: Dr. Agnes Ostafiin and Dr. Hiroshi Mizukami SECTION II. Challenges/Strategies – Minority Business Enterprises SECTION III. Access to Capital SECTION IV. Role Models/Resources SECTION V. Business Characteristics SECTION VI. Owner Characteristics SECTION VII. Rural and Economically Distressed Areas SECTION VIII. Indigenous Community/Remote Tribal Communities STUDY BACKGROUND AND METHODOLOGY END NOTES TABLE OF CONTENTS 42 503835252210911113145475459 NOTE: INDIGENOUS AREAS INCLUDE RURAL AND/OR ECONOMICALLY DISTRESSED AREAS

The Arizona Hispanic Chamber of Commerce designed this study to be a resource for businesses, organizations, educators, government agencies and individuals who want Minority Business Enterprises (MBEs) to succeed. This was funded by U.S. Department of Commerce, Minority Business Development Agency, Coronavirus Response and Relief Fund to assist with the following: a) identifying potential policy topics for MBDA to champion, b) comprehensive data collection which could be used in future MBE studies, c) information analysis on minority business enterprises, and d) information programming for business organizations. The MBE Study focused on providing insights regarding the challenges businesses faced during the pandemic and the strategies they used to overcome them. Other topics include challenges and strategies of being an MBE as well as gaining access to capital.

It is also important to note that the pandemic is still not considered “over” at the time of this writing so the challenges, solutions, and insights covered in this report are based on this continually evolving story.

SURVIVING AND THRIVING BUSINESSES –The storylines that surfaced in this study represent businesses that made it through the pandemic up to this point. While an estimated one-third of businesses nationwide shutdown (2) from March 2020 to approximately March 2022 during the pandemic, those surveyed for this study provide a picture of those who survived (or reopened) the pandemic and have recovered/are in the process of recovering.

CHALLENGES

UTAH MINORITY BUSINESS ENTERPRISE REPORT

STUDY HIGHLIGHTS

DURING THE PANDEMIC – While some businesses/industries thrived during the pandemic, most of those surveyed faced a series of challenges that were mentioned throughout the study. The following were among the top challenges facing Utah MBEs (and non-MBEs) during the pandemic that followed a progression of how the pandemic affected businesses.

DECREASED SALES/LOSING CUSTOMERS – 31% of MBEs top-of-mind mentions – The top mentioned challenge during the pandemic by Utah MBEs was significant decreases in

Comparisons were also made with businesses located in Historically Underutilized Business Zones (“HUBZones”), (1) and businesses operating in Indigenous Communities.

A total of 676 telephone interviews were conducted with Utah businesses from April 1 through April 20, 2022. This was broken down into 179 MBEs and 477 non-MBEs (20 were not identified). The original target was to contact 400+ MBEs, but sample sources were significantly lower for Utah businesses than other states because of the lower percentage of MBEs. Specific targets included economically disadvantaged businesses, especially those operating in rural areas (HUBZone locations – 187 interviews) minority businesses in general, comparison with non-minority-owned businesses, and businesses in Indigenous Communities (16 interviews). The businesses represent a range of industries, company sizes and locations throughout the state.

PANDEMIC STRATEGIES/SOLUTIONS

– In the two years since the start of the pandemic, MBEs (as well as non-MBEs) top strategies fell into the following three categories and followed a natural progression.

revenue. While not all businesses were affected, many of the businesses experienced an initial hit to their revenues in early 2020. Most of those who participated in the survey were in some level of recovery by the time of the survey.

KEEPING EMPLOYEES – 21% of MBEs top-of-mind – After the initial revenue decreases at the start of the pandemic, the next step involved restarting businesses or recovering from the initial shutdowns. Replacing employees continues to be a major obstacle during this recovery phase. Early retirements, fears of COVID exposure, and redistribution of the workforce (e.g., taking new jobs) were among the factors making it difficult to find the workers needed to conduct business.

INFLATION AND ACCESS TO CAPITAL – BBoth were less than 10% of MBEs top-of-mind; however, their response was still significantly higher than non-MBEs as challenges they faced during the pandemic.

While most MBEs are self-funded without much reliance on commercial or government funding, the PPP and EIDL were part of the strategies tried during this phase.

An article from Duke University highlighted some of the causes of the supply chain shortages: It appears that three major issues have contributed most to the (supply chain) chaos: COVID creating a shortage of workers that has reduced production capacity around the world, distortions to typical demand due to changes in customer purchasing behavior, and the fact that manufacturing and logistics systems are often run at or near their maximum capacity. (3)

SUPPLY INVENTORY SHORTAGES – 15% of MBEs top-of-mind Another continued challenge during the current phase of the pandemic involves supply chain issues resulting in shortages in supplies, materials and inventory.

UTAH MINORITY BUSINESS ENTERPRISE REPORT 5 STUDY HIGHLIGHTS

CUT LOSES/LOW HANGING FRUIT – Mentioned by 9% who said “changed staffing,” 8% mentioned “changed operations,” and 7% “mentioned switching to remote working MBEs top-of-mind. During the initial pandemic shutdowns, MBE businesses mentioned having to close their operations (often due to the government mandates), cut staff, and reduce operational expenses. Operational changes were considered “low hanging fruit” decisions, especially with the uncertainty regarding the length of the pandemic. These changes were typically the first solutions that were implemented.

SEEKING HELP/APPLIED FOR LOANS – Mentioned by 11% of MBEs top-of-mind – As expenses mounted, businesses began to apply for the government loans that were made available. Even though 11% mentioned applying for loans top-of-mind, almost half the MBEs surveyed applied and received some government assistance (e.g., Paycheck Protection Program and Economic Injury Disaster Loans).

MINORITY BUSINESS CHALLENGES/STRATEGIES

INCREASE MARKETING/BUILD RELATIONSHIPS

NEGATIVE PERCEPTIONS OF BEING MBE – Half of MBEs (49%) felt they have had to overcome negative perceptions associated with being a minority-owned business; one third (31%) felt cultural differences have affected their business practices, and one third (32%) agree they have been treated differently because they are minority-owned.

CREDIT SOURCE – Most MBEs currently fund their business internally – either through the profits/revenue of the business (41%) and/or from owners’ own personal savings/ credit (27%).

ACCESS TO CAPITAL

FOLLOWING CDC GUIDELINES/MASKS/VACCINES

6 UTAH MINORITY BUSINESS ENTERPRISE REPORT STUDY HIGHLIGHTS

CHANGE OF ATTITUDE – The most often top-of-mind strategy to overcome the negative perceptions was to change their attitude (28% mentioned making changes such as working harder to prove themselves and/or not giving up). Some of stories mentioned by Utah MBEs involved putting up with customer/supplier negative attitudes or ignoring derogatory comments. Most MBEs had to develop a mental attitude and accept this was a normal part of doing business.

– The main strategies used to address the negative impacts of being a minority-owned business involved increasing their visibility and relationships through various marketing efforts. MBEs were asked a series of questions (aided questions) about specific steps they might have taken. Most companies network with other MBEs (61%). Half (50%) promote the fact they are an MBE, and half (47%) use their minority status to pursue business opportunities (e.g., government contracts).

When asked specifically (aided questions), access to capital became an ongoing theme that preceded the pandemic and continues to affect these businesses during the recovery.

– Mentioned by 16% of MBEs top-of-mind (most often mentioned strategy) --As the pandemic continued, MBEs needed to identify new revenue sources to make up for the lost customers. A wide-range of solutions were mentioned including starting new lines of businesses, increasing advertising, targeting new customer markets, expanding social media efforts, networking, and promoting MBE status.

INCREASING MARKETING EFFORTS

– Mentioned by 12% top-of-mind. The controversies associated with adherence to CDC guidelines grew as the pandemic continued; however, some businesses considered making these changes a critical strategy for the safety of their employees and customers.

SIGNIFICANT CHALLENGE – More than half (52%) of Utah MBEs said gaining access to capital was at least somewhat of a challenge (compared to 33% of non-MBEs).

RURAL AND ECONOMICALLY DISTRESSED AREAS

The size and age differences between MBEs and non-MBEs appeared to significantly affect the businesses’ ability to handle the pandemic – i.e., MBEs not having the resources and experience).

OWNER CHARACTERISTICS

oEducation:College graduate -- 57% (63% for non-MBEs) Owner’s median annual income in 2021 o $88,750 ($96,768 for non-MBEs)

The following is a profile of the MBE owners: Average age of the owner is 47 years old (52 for non-MBEs).

SELF-FUNDING – Significantly more MBEs self-fund their business than non-MBEs (e.g., personal loans to the business, from their own retirement fund)

PANDEMIC CHALLENGES/STRATEGIES AMONG HUBZONE BUSINESSES

BUSINESS CHARACTERISTICS

UTAH MINORITY BUSINESS ENTERPRISE REPORT 7 STUDY HIGHLIGHTS

The following are some of the characteristics of an MBE during 2022. Median revenue was $182,142 in 2021. Median staff size is 4 employees. (6 for non-MBEs) Median age of the business is 9 years old.

One of the key research objectives was to survey businesses in rural and economically distressed areas as defined by their location via “HUBZones.” The Small Business Administration defines HUBZones as “... small business in historically underutilized business zones.” (1) HUBZone businesses throughout the state were surveyed for this study. HUBZone and non-HUBZone businesses were compared for this analysis.

HUBZone Pandemic Challenges – Keeping employees, experiencing decrease in sales and having supply chain challenges were the top three challenges for both the HUBZone and non-HUBZone businesses. o MBEs in HUBZones were more likely to mention being affected by a drop in sales (37%) than non-HUBZone businesses (22%).

Their top strategies to survive/get through the pandemic were: Changed their marketing efforts (3 of 16) Changed staff (3 of 16)

Keeping employees (4 of 16) Decreasing sales/loss of business (4 of 23)

Business Characteristics – A comparison of the business characteristics of HUBZone MBEs highlight that they tend to be smaller (lower revenue), more likely to be homebase and newer than non-HUBZone businesses.

HUBZone Strategies - The top four strategies used by HUBZone businesses were changing marketing/communication efforts, following CDC guidelines, making staff changes, and changing operations.

o MBEs in HUBZones were more likely to advertise (16%) than non-HUBZone businesses (5%).

PROFILE DIFFERENCES

Owner Characteristics – HUBZone MBE business owners are not significantly different than most of the non-HUBZone businesses.

BUSINESS/OWNER

WestGroup completed 16 interviews with businesses in Indigenous Communities/Remote Tribal Communities in Utah (targeted completing at least 50). While there were very few differences when comparing these businesses with other MBEs or non-MBEs, a few themes surfaced.

ACCESS TO CAPITAL Gaining access to capital among Tribal Community MBEs is clearly a challenge (7 out of 16). The majority (10 of 16) currently finance their business from within the business or personal loans.

ACCESS TO CAPITAL MBEs in HUBZones are more slightly more likely to feel gaining access to capital is a significant challenge (28%) than non-HUBZone businesses (15%).

8 UTAH MINORITY BUSINESS ENTERPRISE REPORT STUDY HIGHLIGHTS

INDIGENOUS COMMUNITY/REMOTE TRIBAL COMMUNITIES

PANDEMIC CHALLENGES/STRATEGIES

1. MBEs followed the same patterns as non-MBEs regarding the challenges they faced during the pandemic and how they dealt with the problems. The problems and solutions that MBEs faced a natural flow of problems and businesses responses.

Appliedrequirementsforgovernment Increased marketing efforts (e.g., started new lines of business)

Most stayed within government

loans/grants;

3. PREPARING FOR THE FUTURE – When asked what they would have done differently regarding responding to the pandemic, most mentioned something about being better prepared for a disaster– e.g., stocked more inventory and supplies, adopted new technology ahead of time. This is especially critical for MBEs who are smaller and less funded/prepared to handle a pandemic. Efforts to assist these businesses should focus on helping them develop the financial depth and funding resources to get them through a disaster. HAPPENED? HOW to

UTAH MINORITY BUSINESS ENTERPRISE REPORT 9 CONCLUSIONS

2. NEGATIVE PERCEPTIONS – In the midst of the pandemic, half of the MBEs still felt they had to overcome negative perceptions associated with being a minority business. Utah MBEs have taken steps to increase their visibility and marketing efforts to try and overcome the barriers. On the other hand, most have experienced enough discrimination or derogatory comments throughout their lives and have had to learn to deal with these negative perceptions.

BUSINESSESWEREAFFECTED? WHAT BUSINESSESDIDDO? Stage 1: GOVERNMENT SHUT-DOWN BUSINESSES State 2: CONFLICTS ADHERING TO CDC GUIDELINES Stage 3: RETURN TO BUSINESS Stage 4: PARTS OF ECONOMY MORE AFFECTED THAN OTHERS Immediate loss of revenue Conflicts with employees/ customers/ Needingsupplierscash to replace lost business Trying

HUBZone MBEs had greater difficulty accessing capital than non-HUBZone businesses MBEs in Indigenous Communities were more likely to feel that accessing capital was a significant challenge than other MBEs and non-MBEs.

Longer wait times, Tried new lines of business, still a problem.

WHAT

Comparing responses between MBEs with other groups highlighted differences: MBEs were more severally affected by the loss of business than non-MBEs MBEs had more difficulty accessing capital than non-MBEs When MBEs were able to receive government loans/grants (e.g., PPP), they typically received less assistance than non-MBEs. MBE companies had significantly lower annual revenues, were newer companies (years in business), and more likely to be home-based than non-MBEs.

replace workers Supply chain issues

Changed hiring practices, still a problem

Cut expenses, laid off workers

The 2022 Utah study focused on the following topics: Impact of the COVID-19 pandemic on minority businesses. Impact of being minority-owned businesses. Strategies minority businesses have taken to address these challenges. Comparisons of these challenges and strategies of businesses in rural/economically distressed Comparisonsareas.ofthese challenges and strategies of businesses in Indigenous Communities.

The purpose of this study is to help focus the overall and specific needs of minority-owned businesses.

The focus of the research has been to provide insights into the needs and opportunities of minority business enterprises as a resource to a wide range of audiences including government officials, and analysts; business and community leaders; and educators.

Research conducted by WestGroup Research throughout the pandemic has highlighted that the impact and adjustments made by all businesses (as well as individuals/households) have been a moving target since March 2020. The uniqueness of the pandemic’s challenges has resulted in a continual series of pivots being made by minority businesses in order to adapt to the changes in the marketplace. Government-mandated business shutdowns, medical/mask requirements, work-from-home adjustments, school shutdowns/impact on workforce, rapidly changing employment opportunities, quickly rising labor costs, and now record levels of inflation have affected all businesses, but especially minority business enterprises.

10 UTAH MINORITY BUSINESS ENTERPRISE REPORT STUDY OVERVIEW

The Arizona Hispanic Chamber of Commerce and Arizona Minority Business Center have been conducting research with minority-owned businesses for the past 17 years. This is the first year that the study has expanded from Arizona to include other states. This report is a summary of the findings from the Utah study.

For perspective, the U.S. Census records prior to the pandemic estimated the following in 2018: Utah had 34,366 minority-owned businesses, which represents the total number of firms with or without paid employees. (A total of 4,866 minority-owned businesses had paid employees.) Minority-owned(4) firms represented 11.0% of all Utah businesses. (4)

The biggest challenges that MBEs faced during the pandemic were:

A. Challenges – What types of challenges have minority business enterprises (MBEs) faced during the COVID pandemic and how have they addressed them?

o Inflation and Access to capital– Both of these challenges were mentioned by less than 10% of MBEs; however, their responses were significantly higher than nonMBEs as a challenge they faced during the pandemic.

o Decrease in sales/Lost businesses – The top mentioned challenge by MBEs during the pandemic was a drop in sales and lost business (31%). MBEs were significantly more likely to mention decreased sales than non-MBEs (18%).

Minority Business Enterprises provided a top-of-mind perspective of their biggest challenges during the pandemic and what strategies they used to address them. It is important to note that the input from companies/organizations is from those that stayed in business throughout the two years since the start of the pandemic. There were 30 out of 179 minority owned businesses that started during the pandemic, but most of the companies were in business since before 2020.

o Keeping employees – The second most mentioned top-of-mind challenge by MBEs was trying to keep employees (21%). As businesses began to reopen after the initial shutdowns, finding employees willing to come back into the workforce or return to their original jobs was a significant challenge.

SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC

o Supply/inventory shortages – A total of 15% of MBEs mentioned supply shortages as one of the top challenges facing their company during the pandemic. Both MBEs and non-MBEs considered this one of the top three challenges. As the pandemic progressed, concerns about supply chain issues represented a third wave of challenges, after decrease in revenues and workforce shortages.

UTAH MINORITY BUSINESS ENTERPRISE REPORT 11 STUDY FINDINGS

12 UTAH MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC CIRCLED IN BLACK – SIGNIFICANTLY DIFFERENT AT 95% CONFIDENCE LEVEL BETWEEN MBE S AND NON-MBE S NOTE: OTHER INDIVIDUAL COMMENTS MADE BY 3% OR LESS NOT LISTED CHALLENGES DURING PANDEMIC MINORITY VS. NON-MINORITY Chart 1 Challenges During Pandemic Minority vs. Non Minority 5% 7% 6% 5% 1% 2% 8% 11% 16% 25% 18% 2% 2% 4% 5% 5% 6% 7% 11% 15% 21% 31% 0% 20% 40% EMPLOYEES WORKING FROM HOME KEEPING EMPLOYEES FROM CATCHING VIRUS SHUTTING DOWN DURING COVID CHANGES IN GOVERNMENTACCESSREGULATIONSTOCAP IT AL INFLATION/RISING COSTS COMMUNICATING WITH CUSTOMERS/EMPLOYEESDURINGQUARANTINE NO PROBLEMS/CHALLENGES SUPPLY SHORTAGES/DECREASED INVENTORY KEEPING EMPLOYEES DECREASE IN SALES/LOSS OF BUSINESS MB E S N o n -M i n o r i t y Circled in black Significantly different at 95% confidence level between MBEs and non MBEs Note: Other individual comments made by 3% or less not listed

2. Following the CDC guidelines (12%) – The second most often strategy involved following the continually changing guidelines that were either mandated or “strongly recommended” during the pandemic. The controversies about vaccines and mask requirements still were an important step for some of these businesses to protect employees, customers and suppliers.

3. Applying for loans (11%) – Applying for loans was considered one of the three, top-of-mind strategies MBEs tried during the pandemic. In addition, MBEs were significantly more likely to mention applying for loans than non-MBEs (5%).

B. Strategies – NOTE: These are unaided top-of-mind recall of strategies companies tried. Aided recall would have had higher percentages, but these focus on the strategies that most stood out in the business owner’s mind that they tried during COVID.

In crisis mode, most businesses began the pandemic by cutting back operations and applying for loans (shorter-term solutions), but as the pandemic continued, MBEs (and non-MBEs) had to find a way to increase the revenue streams that were lost/reduced (long-term solutions).

Survivor’s perspective – It is important to note that participants in this study were all businesses who had made it through the pandemic. Businesses who closed down during the pandemic would most likely provide a different perspective.

SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC

Non-MBEs were significantly more likely to mention strategies to move their employees to work from home (12%) than MBEs (3%), and pay their employees more (6%) than MBEs (2%).

MBEs tried numerous strategies over the past few years with the top three being:

UTAH MINORITY BUSINESS ENTERPRISE REPORT 13 STUDY FINDINGS

1. Changed marketing strategies (16%) –When asked about the strategies they tried to overcome the challenges during the pandemic, the top mentioned solution by MBEs was making changes to their marketing strategies. This involves any one of a number of approaches, including increasing advertising/contacting potential customers via emails, social media, website, phone calls, networking, and events, as well as starting new lines of business (e.g., curbside pickup for restaurants).

14 UTAH MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC CIRCLED IN BLACK - SIGNIFICANTLY DIFFERENT AT 95% CONFIDENCE LEVEL BETWEEN MBE S AND NON-MBE S NOTE: OTHER INDIVIDUAL COMMENTS MADE BY 3% OR LESS NOT LISTED Chart 2 Strategies/Solutions to Challenges During Pandemic Minority vs. Non Minority 6% 12% 2% 3% 3% 4% 4% 4% 9% 10% 12% 5% 14% 13% 2% 3% 5% 6% 7% 7% 7% 7% 8% 9% 9% 11% 12% 16% 0% 10% 20% PAID EMPLOYEES MORE REMOTE WORKING CHANGED STRATEGIES, SOUGHT HEL P, ADVIC E NEW REVENUEWORKEDSTRATEGYHARDER CUT BACK OPERATIONS C H ANGED A TTITUDES PERSISTENCE, POSITIVITY SWITCHED TO REMOTE WORKFORCE CHANGED OPERATIONS CHANGED STAFFING/HIRINGAPPLIEDDIDPRACTICESNOTHINGFORLOANS F O LLOWED CDC GU I DEL I NES , MASKS , VACC I NE S CHANGED MARKETING STRATEGIES MBE S N o n - M i n o r i t y Significantly different at 95% confidence level between MBEs and non MBEs comments made by 3% or less not listed STRATEGIES/SOLUTIONS TO CHALLENGES DURING PANDEMIC MINORITY VS. NON-MINORITY

Challenge: We had a lot of struggles with lead times.

Challenges: Patients passing away. Supply chain demand. Strategies: Reaching out to find new vendors.

Strategies: We focused on the relations we had with our brokers. They were willing to work with us for a better rate on the loads we were booking with them.

FULL SERVICE EVENTS FIRM

MEDICAL

PROTECTIVE FOR CONSUMERS AND GOVERNMENT

EQUIPMENT

Challenges: Keeping up with demand.

TRUCKING, TRANSPORTATION, LOGISTICS

Strategy: Managing expectations of our customers better by communicating more. We also tried to increase stock in inventory

Strategy: We applied for all possible funding opportunities. We were lucky to be featured by media outlets- radio, TV. Salt Lake chamber, and Visit Salt Lake all supported us

Strategies: We pivoted to different markets. DURABLE SUPPLIES

UTAH MINORITY BUSINESS ENTERPRISE REPORT 15 STUDY FINDINGS SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC MBE PANDEMIC CHALLENGES AND STRATEGIES COMMENTS

INDUSTRIAL MACHINERY DISTRIBUTING

MECHANICAL CONSTRUCTION

Strategies: Listed on Indeed for workers.

Challenges: Getting paid for service. Keeping our drivers, Staying competitive, Make profit. Negotiating on delivery in a way that was profitable.

Challenges: Decrease in sales.

Challenge: They (government) shut down all gatherings of all events.

Received PPP Loan in 2020/21 Received PPP 38% Not Received PPP 48% Don't know 14% Non-MBE N=477 Received PPP 43% Not Received PPP 53% Don't know 5% MBE N=179 Among those receiving loan: Received 1 loan 61% Received 2 loans 32% Don’t Know 8% Median loan amount $14,000 Among those receiving loan: Received 1 loan 64% Received 2 loans 28% Don’t Know 8% Median loan amount $30,000 RECEIVED PPP LOAN IN 2020/21

PPP loans were made available in 2020 and again in 2021. In most cases the loans did not require repayment in all or part to the government.

Four out of ten Utah MBEs received PPP – When asked directly, 43% of the Utah MBEs mentioned they received PPP loans. Of those receiving PPP loans, more than half of the businesses received only one PPP loan during 2020 (61%) and one-third (32%) said they received two loans by 2021.

MBE vs. non-MBEs – A comparable percentage of MBEs and non-MBEs received PPP loans (not significantly different). On the other hand, MBEs were also more likely to receive lower loan amounts ($14,000 median loan amount) than non-MBEs ($30,000 median loan amounts).

16 UTAH MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC C. Paycheck Protection Program (PPP) Did you receive a Paycheck Protection Program or PPP loan?

Limited data – Since ethnic/race data was not required in the loan process, national and state level results do not appear to be available. MBE participation in PPP in Arizona, Nevada and Utah might have been different than other states.

Confusion with PPP, EIDL and other government grants – A range of loans and grants were made available to businesses over the past two years under the umbrella of the CARES Act. Businesses could have been confused about the source of their loans.

Because lenders are not required to collect demographic details on their borrowers, data on the Paycheck Protection Program’s racial breakdown has been scarce, but economists have consistently found signs of gaps.

SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC COMPARISON TO NATIONAL PPP NEWS

The initial results from the Census 2021 Annual Business Study also highlighted that the percentage of MBEs requesting government-sponsored financial assistance during the pandemic were comparable between minority (74%) and non-minority owned firms (72%). (5)

Results from the Utah MBE study highlighted that businesses receiving PPP funds were comparable to nonMBEs; however, the average funding received by non-MBEs was significantly higher. The difference in the amount of funding highlighted in the article and the MBE study seem consistent.

A New York Times analysis of data from several sources — including the Small Business Administration, which is managing the loan program — and interviews with dozens of small businesses and bankers show that Black- and other minority-owned businesses were disproportionately underserved by the relief effort, often because they lacked the connections to get access to the aid or were rejected because of the program’s rules.

Possible reasons for the potential differences between recent news reports and the MBE study regarding the disparity in PPP funding between MBEs and non-MBEs include:

Results of surviving businesses – All survey participants were currently in business at the time of the research. Companies that closed down at the time of the survey were not represented in these results. In other words, those who did not receive PPP and might have subsequently closed down were not included in the MBE study.

UTAH MINORITY BUSINESS ENTERPRISE REPORT 17 STUDY FINDINGS

And data from the Small Business Administration shows the relief effort’s tilt. The vast majority of lenders did not report demographic data on the 3.6 million loans they made this year, but of the 996,000 that included information on the borrower’s race, 71 percent of the dollars went to white-owned businesses. (4)

A review of various national articles written after the distribution of the PPP loans highlighted that the funds were disproportionate in assisting minority-owned businesses.

18 UTAH MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC D. New Lines of Business – Additional questions in the survey specifically asked if businesses added new lines of businesses as a strategy during the pandemic. For some businesses, this meant closing one part of their business and opening or expanding another line – e.g. restaurants opening curbside service and closing dine-in options. A total of 8% agreed that they tried “new lines of business” when asked directly, which was comparable to non-MBEs (6%). STARTED NEW LINE OF BUSINESS DURING COVID Non-MBE N=477 Chart 4 Started New Line of Business During COVID MBE N=179 Did Not Start New Line 92% Started New Line 6% Don't Know 2% Did Not Start New Line 90% Started New Line 8% Don't Know, 2% No significant differences between MBEs and non-MBEs.

Of the 41% who considered their business home-based, 30% switched to home-based during the pandemic (12% based to all MBEs).

Moving back to home-based operation – One cost cutting measure involved moving businesses operations from storefronts/bricks and mortar locations to 100% remote/home-based operations. Among home-based businesses, MBEs were asked if they moved their operations from a separate location and into their home as a result of COVID.

Among those who conducted business online, the average percentage of online business was comparable after the pandemic started for MBEs and non-MBEs than before the pandemic.

F. Online Business – MBEs were asked to estimate the percentage of sales conducted online before the pandemic and two years after the pandemic began. There seemed to be a shift to more businesses conducting online business for MBEs (8 percentage points higher than before the pandemic) and non-MBEs (4 point higher) during the pandemic.

SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC

BOLDED FIGURES ARE SIGNIFICANTLY DIFFERENT – PAIRED T-TEST 50 58% 51% 55% 47% 48% 39% 8%4% 1% PANDEMICBEFORE 2022 MBE NON-MBE s AVERAGE PERCENTAGE OF ONLINE SALES AMONG THOSE WHO HAD AT LEAST SOME ONLINE SALES MBE NON-MBES s 1% PERCENTAGE HAD ONLINE SALES 40% (PERCENTAGECHANGEPOINTS)

UTAH MINORITY BUSINESS ENTERPRISE REPORT 19 STUDY FINDINGS

There were significantly more MBEs who have home-based businesses (41%) than nonMBEs (26%). The percent switching to home-based during the pandemic was comparable between MBEs and non-MBEs.

When asked how response to the pandemic, half of the MBEs said they would have done same thing (51%). This was significantly lower than non-MBEs (61%).

they would have changed their

20 UTAH MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC CIRCLED IN BLACK - SIGNIFICANTLY DIFFERENT AT 95% CONFIDENCE LEVEL BETWEEN MBE S AND NON-MBE S NOTE: OTHER INDIVIDUAL COMMENTS MADE BY 3% OR LESS NOT LISTED Strategies/Solutions Should Have Tried During Pandemic Minority vs. Non Minority 9% 5% 9% 6% 4% 8% 4% 4% 14% 29% 2% 5% 5% 5% 6% 6% 8% 9% 15% 30% 0% 10% 20% 30% INCREASED MARKETING EFFORTS NOT FOLLOWED MANDATES STAYED OPEN/SHOULD NOT HAVE CLOSED APPLIED FOR PPP/GOVERNMENT LOANS CLOSED EARLIER STAFF CHANGES HIRE MORE OR CUT MORE IMPLEMENT COVID PROTOCOLS LEARNED NEW WAYS TO SELL SERVICES/PRODUCTS MORE TECHNOLOGY, PREP TO REMOTE WORKING SAVED MORE, STOCKED SUPPLIES/INVENTORY/ MBE S N o n M i n o r i t y Significantly different at 95% confidence level between MBEs and non MBEs Note: Other individual comments made by 3% or less not listed STRATEGIES/SOLUTIONS SHOULD HAVE TRIED DURING PANDEMIC MINORITY VS. NON-MINORITY G. Retrospect – What would you have done differently?

Among those who provided steps they might have taken, the top solutions were: Save more/stocked supplies/inventory 30% (MBEs, and 29% among non-MBEs).

Implemented more technology and better prepared for remote working environment 15% (MBEs and 14% non-MBEs). Learned new ways to sell services/products (9% MBEs compared to 4% non-MBEs).

Forecasting the future – The top two responses required being able to “forecast the impact of the pandemic” –i.e. stock supplies/inventory ahead of time and being prepared with the technology (e.g., ready to have a remote work force). MBEs vs. non-MBE differences – Most of the alternative strategies they could have tried were comparable between MBEs and non-MBEs. The only significant difference was that non-MBEs were more likely to say they would have increased marketing efforts (9%) than MBEs (2%).

the

SERVICE BUSINESS

I would have created some type of online service. PRODUCTION COMPANY

UTAH MINORITY BUSINESS ENTERPRISE REPORT 21 STUDY FINDINGS SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC PANDEMIC STRATEGIES IN RETROSPECT COMMENTS RETAIL OF LASER ENGRAVING. I would have tried to get a loan and stock up on merchandise. RESEARCH AND DEVELOPMENT

We would have gotten more prepared for people to work at home.

DOG TRAINERS

I would have had more suppliers. Try to arrange multiple sources of products so I would not be stuck with one source.

I would have been more diversified in what we do, instead of focusing on the one that makes the most money. SHOP

I would have closed the business down.

E-COMMERCE

Prior to starting Nanoshell, Dr. Ostafin was on the faculties of the University of Utah and Notre Dame University specializing in nanoscience. She did research and published papers in the medical and materials-related aspects to nanotechnology. Over time, Dr. Ostafin wanted to pursue her interest in private sector so she left her academic positions and started Nanoshell together with Dr. Mizukami in 2005. For the first 6 or 7 years, the company focused on the medical aspects of nano technologies, and started developing treatments for specific blood disorders. Nanoshell developed a technology that would isolate a desired or undesired component of the blood as well as ways to retrieve those components from the blood for diagnosis and analysis. Most of the funding for the business during these first years came via grants from the National Institutes of Health and National Science Foundation.

WHO IS NANOSHELL COMPANY?

HOW DID NANOSHELL COMPANY GET STARTED?

TRANSITIONING SCIENCE INTO A BUSINESS 22 UTAH MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC BUSINESS PROFILE NanoShell Company ownerS DR. AGNES OSTAFIN & DR. MIZUKAMIHIROSHI

Nanoshell Company applies nanoscience technology to develop products for the medical and consumer goods industries. Nanoshell is led by Dr. Agnes Ostafin and Dr. Hiroshi Mizukami who manage the company along with a staff of three employees who work in the manufacturing part of the business. Nanoshell is a live example of scientists understanding the commercial value of their research and transitioning their work from academia to a successful private sector development and manufacturing business. In layman’s terms, “nano” is something very small that can penetrate more places, faster, more efficiently, and with less waste. For example, nanomedicine is able to deliver drug dosages to specific parts of the body, such as chemotherapy, more precisely, accurately and less damaging. Nanoshell uses the science to develop products, such as pharmaceuticals, vitamins and personal care products.

One of the first steps that Nanoshell took was to apply for government funding through the Emergency Injury Disaster Loan (EIDL) program. This made cash available and helped them through the initial economic downturns. Another step Dr. Ostafin and Dr. Mizukami took was to change their marketing strategy from a “wholesale only” model and began to add retail/direct-to-consumer products to expand their revenue options. Nanoshell developed their own line of products and is currently building the marketing channels for distribution. One of the challenges that Nanoshell faces is prioritizing the science aspect of their work versus the money making aspects. As scientists, the owners are used to solving problems and developing scientific solutions, but not necessarily on the sales and marketing side of the business. The pivot from wholesale to retail accentuates the challenge of having to become even more marketing focused.

In the following 10+ years, Nanoshell has used the nanotechnology to branch further into more mainstream products that “people could actually buy,” such as vitamins and personal care products.

HOW DID NANOSHELL ADDRESS THEIR PANDEMIC CHALLENGES?

SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC

Prior to the pandemic, Nanoshell served as a wholesaler by manufacturing products for other companies. Once the pandemic began, Nanoshell experienced a significant drop in revenue as customers discontinued their contracts due to the uncertainty in the marketplace.

Another challenge Nanoshell experienced was losing two of their employees during the pandemic. Finding people to replace them has been especially challenging as well as training and bringing the new staff up to pre-pandemic levels.

WHAT CHALLENGES DID NANOSHELL FACE DURING THE PANDEMIC?

UTAH MINORITY BUSINESS ENTERPRISE REPORT 23 STUDY FINDINGS

SECTION I. CHALLENGES/STRATEGIES/SUCCESSES

Dr. Ostafin mainly discussed the advantages of being a minority-owned business (and being a womanowned business). In technology-focused industries, minority status does not appear to be a major downside as long as the company has the technical expertise and business savvy to produce and deliver the products.

Dr. Ostafin’s top-of-mind response when asked about Nanoshell’s success was, “We are not bankrupt!” Making it through the pandemic has definitely been a challenge. Other successes include receiving patents and federal grants related to a number of their nano technologies. These successes help provide credibility to their customers and suppliers.

– COVID PANDEMIC WHAT CHALLENGES HAS NANOSHELL FACED BEING A MINORITY-OWNED BUSINESS?

WHAT ADVICE WOULD YOU OFFER TO SOMEONE STARTING A BUSINESS LIKE YOURS? They need money, an investor, and/or a partner that has the knowledge to (run the business) with less money. Finding the right people to work with is better than going at it alone.

The company also recently started a subsidiary in Poland to begin entering the EU market.

24 UTAH MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS

WHAT HAVE BEEN SOME OF NANO SHELL’S BIGGEST SUCCESSES?

In addition, NanoShell has used their minority status to their advantage with the federal grants.

Of those who were able to recall specific issues, the top ones mentioned were: taken seriously (i.e., run the business

Almost half (46%) of the MBEs did not feel they faced significantly different challenges (or could not think of any challenges top-of-mind). While they might have experienced negative minority-related issues, most primarily focus their efforts at overcoming the challenges of running a business that is common to most organizations.

Being

Finding customers

UTAH MINORITY BUSINESS ENTERPRISE REPORT 25 STUDY FINDINGS SECTION II. CHALLENGES/STRATEGIES – MINORITY BUSINESS ENTERPRISES Most Significant Challenges or Barriers Faced as a Minority Owned Business 2% 2% 2% 3% 5% 5% 6% 12% 16% 31% 0% 10% 20% 30% 40% CULTURAL COMPETITIONSECURINGBARRIERS/LANGUAGEFINDINGEMPLOYEESLOANS/FUNDINGWITHLARGERCOMPANIESDISCRIMINATIONHELPRUNNINGTHEBUSINESSFINDINGCLIENTS/GETTINGWORKNOTBEINGTAKENSERIOUSLYDON'TKNOW/NOANSWER NO UNIQUE CHALLENGES/SAME AS OTHER BUSINESSES MOST SIGNIFICANT CHALLENGES OR BARRIERS FACED AS A MINORITY-OWNED BUSINESS

A. Top-of-Mind Recall of Minority-Related Challenges

COVID was the overriding issue in 2022 that influenced responses about the challenges and strategies associated with being minority-owned businesses. Many of the MBEs and non-MBEs were struggling to keep afloat during the pandemic. While being an MBE had its challenges, the basic survival of the businesses had a significantly larger impact on them than issues, such as discrimination or competing on “an even playing field.”

finding contracts, clients) Helping

26 ARIZONA MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS SECTION II. CHALLENGES/STRATEGIES – MINORITY BUSINESS ENTERPRISES B. Aided Recall of Minority Business Challenges

One-third (31%) felt that cultural differences have had an impact on their business practices (12% significant challenge, 19% somewhat of a challenge).

MBEs were asked a series of aided questions to quantify the challenges they faced.

OVERCOMING NEGATIVE PERCEPTIONS OF BEING A MINORITY-OWNED BUSINESS Chart 7 Overcoming Negative Perceptions of Being a Minority Owned Business Significant Challenge 16% ofSomewhata Challenge 33% Not a Real Challenge 52%

Half (49%) of MBEs felt overcoming negative perceptions of their business being minority-owned was at least somewhat of a challenge (16% significantly challenge, 33% somewhat of a challenge).

One third (32%) agreed they have been treated differently because they are a minority-owned business.

UTAH MINORITY BUSINESS ENTERPRISE REPORT 27 STUDY FINDINGS SECTION II. CHALLENGES/STRATEGIES – MINORITY BUSINESS ENTERPRISES WHETHER CULTURAL DIFFERENCES HAVE IMPACT ON BUSINESS PRACTICES PERCEPTION OF BEING TREATED DIFFERENTLY BY SUPPLIERS OR CUSTOMERS Chart 8 Whether Cultural Differences Have Impact on Business Practices Significant Challenge 12% ofSomewhata Challenge 19% Not a Real Challenge 69% Chart 9 Perception of Being Treated Differently by Suppliers or Customers Strongly Agree 10% Agree 22% Disagree 40% Strongly Disagree 23% Don't know 6%

28 UTAH MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS SECTION II. CHALLENGES/STRATEGIES – MINORITY BUSINESS ENTERPRISES C. Strategies Overcoming Racial Barriers MBEs were asked how they overcome the challenges associated with being minority-owned. The top-ofmind responses included: The most often mentioned top-of-mind reactions was changing their attitude (e.g., working harder, becoming more positive) 28%. Changing their marketing strategies was next (17%), followed by seeking advice/input and increased networking. HOW BUSINESSES OVERCAME BARRIERS AS A MINORITY OWNED BUSINESS TOP UNAIDED RESPONSES How Businesses Overcame Barriers as a Minority Owned Business Top Unaided Responses 3% 3% 3% 3% 4% 5% 12% 14% 17% 28% 0% 10% 20% 30% TOOK CARE OFHIREDEMPLOYEESGOTLOANSMOREBUDGETED GOOD CUSTOMER SERVICE HIRED ANGLO/MALENETWORKINGPARTNER SOUGHT ADVICE/INPUT CHANGED MARKETING STRATEGY CHANGED THEIR ATTITUDE

UTAH MINORITY BUSINESS ENTERPRISE REPORT 29 STUDY FINDINGS SECTION II. CHALLENGES/STRATEGIES – MINORITY BUSINESS ENTERPRISES AGREEMENT WITH STATEMENTS UNIQUE TO MINORITY BUSINESSES ENTERPRISES Chart 11 Agreement With Statements Unique to Minority Businesses Enterprises 16% 19% 22% 31% 31% 39% 0% 20% 40% 60% 80% I USE MY MBE STATUS TO PURSUE BU SINESS OPPORTUNITIES I TRY TO PROMOTE MBE STATUS I TRY TO NETWORK WITH OTHER MBE S STRONGLY AGREE AGREE 61% 47% 50% Increasing visibility – MBEs significantly increased their efforts to promote their minority status as a way to overcome their challenges. In a series of aided responses questions, businesses were asked how strongly they agree with statements about specific promotion strategies. Networking the MBE visibility/brand was the top response.Two-thirds (61%) networked with other MBEs. Half (50%) promoted the fact that they were an MBE. Half (47%) used their minority status to pursue business opportunities.

BUSINESSChallenges:CONSULTINGBeing taken seriously

30 UTAH MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS SECTION II. CHALLENGES/STRATEGIES – MINORITY BUSINESS ENTERPRISES CHALLENGES FACING MBEs AND STRATEGIES COMMENTS

EDUCATION NON-PROFIT Challenges: Access to capital. Strategies: We have tried to find alternative sources. We have turned to private donations.

The customers are Caucasian and they assume that I don’t really know things.

PLUMBINGChallenges:

Strategies: Participate in more organizations. Reaching out to other companies and really selling myself and hiring more seasoned talent.

HOUSE PAINTINGChallenges:

One incident… Someone saw my website and the web designer just copy and pasted his dad’s website and changed the name of it, but left a pic of his dad on the website. His dad was a white man. One customer thought that the white man on the website would show up, and the customer had a very surprised look.

Strategies: I updated the picture on the website.

Strategies: I still have not overcome that yet. We’re still working within our own Tribal areas.

BUSINESS PLANNING SERVICE Challenges: Seemed like I could only do business within Tribal areas and not offTribal areas.

Strategies: Constantly answer their questions and being positive

ARIZONA MINORITY BUSINESS ENTERPRISE REPORT 31 STUDY FINDINGS SECTION III. ACCESS TO CAPITAL One theme that surfaced throughout the interviews was the challenge associated with gaining access to capital. Topics included where MBEs obtain resources to finance their business, how difficult it is to obtain financing, and how they were treated when applying for a loan. Credit Source – Most MBEs currently fund their business internally – either through the profits/revenue of the business (41%) and/or from owners’ own personal savings/ credit (27%). Self-funding – Significantly more MBEs self-fund their business (27%) than non-MBEs (16% from personal loans to the business.) CURRENT FUNDING TOP SOURCES MINORITY VS. NON-MINORITY Current Funding Top Sources Minority vs. Non Minority 2% 4% 3% 8% 11% 16% 44% 3% 3% 5% 11% 15% 27% 41% 0% 10% 20% 30% 40% 50% DONATIONS/CONTRIBUTIONS/NONBANKSCITY/STATE/FEDERALINVESTORS/PARTNERS/FAMILYPROFITCREDITCARDSLOANS/GRANTSOTHERLENDINGINSTITUTIONSSELFFUNDINGFUNDINGFROMBUSINESSOPERATIONS MB E S N o n - M i n o r i t y *Significantly different at 95% confidence level between MBE and non MBE Note: Other individual comments made by 3% or less not listed Waiting for Tom * SIGNIFICANTLY DIFFERENT AT 95% CONFIDENCE LEVEL BETWEEN MBE AND NON-MBE NOTE: OTHER INDIVIDUAL COMMENTS MADE BY 3% OR LESS NOT LISTED

32 UTAH MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS SECTION III. ACCESS TO CAPITAL Chart 13 Gaining Access to Capital Significant Challenge 26% ofSomewhata Challenge 26% Not a Real Challenge 41% Don't Know 7% MBEs N=179 Significant Challenge 12% ofSomewhata Challenge 21% Not a Real Challenge 56% Don't Know 11% Non-MBEs N=477 GAINING ACCESS TO CAPITAL Significant Challenge – Half (52%) of MBEs said gaining access to capital was at least somewhat of a challenge (compared to 33% of non-MBEs). Of those 52% who felt this was a significant challenge, the most often mentioned “capital-related strategies” they used to address the issue were: o Changed their attitude (e.g., Do we really need the loan?) o Increased their marketing efforts o Applied for government loans – e.g., PPP o Found other financing A total of 12% disagreed with the statement that they were “treated with respect when applying for a business loan.”

UTAH MINORITY BUSINESS ENTERPRISE REPORT 33 STUDY FINDINGS SECTION III. ACCESS TO CAPITAL Chart 14 Overcoming Challenges of Gaining Access to Capital 3% 5% 7% 7% 8% 10% 11% 14% 15% 15% 24% 0% 20% 40% DID NOTHING CHANGED MARKETING TARGETS SOUGHTBUILTHELP/ADVICEUPCREDIT CUT BACK EXPENSES SELF FINANCED EDUCATION/LEARNED MORE FROM OTHERS ABOUT FINANCING FOUND OTHER FINANCING APPLIED FOR LOANS/GRANTSGOVERNMENT(E.G.,PPP)INCREASEDMARKETINGCHANGEDATTITUDE those who felt access to capital was at least somewhat of a challenge Among top responses: OVERCOMING CHALLENGES OF GAINING ACCESS TO CAPITAL AMONG TOP RESPONSES: N-235 AMONG THOSE WHO FELT ACCESS TO CAPITAL WAS AT LEAST SOMEWHAT OF A CHALLENGE

34 STEPS TAKEN TO GAIN ACCESS TO CAPITAL COMMENTS CEMENT COMPANY Worked harder to gain funding through other venues. RETAILER I’m trying to learn more on how to navigate through things. REAL ESTATE Borrow money from family and use my savings. CAR AUDIO COMPANY Getting a PPP loan and using our personal money. MANUFACTURING We went to the federal government to get a loan instead of locally. BUSINESS CONSULTING Currently attending different seminars provided by the SBA and with the chamber of commerce. Chart 15 Treated With Respect When Applying For Loans I was treated with respect when applying for a business loan at a bank or financial institution Strongly Agree 21% Agree 44% Disagree 10% DisagreeStrongly 2% Don't Know 23% TREATED WITH RESPECT WHEN APPLYING FOR LOANS I was treated with respect when applying for a business loan at a bank or financial institution UTAH MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS SECTION III. ACCESS TO CAPITAL

If you could have anyone visit.... – “If you could have anyone in this world visit your business, and their intentions were to specifically help your business, who would you want these people to be?” Among the top individuals mentioned by MBEs were: Elon Musk (7%) Donald Trump (5%) Marcus Lemonis (2%) Michelle Obama (2%) Among “categories” of potential advisors, business experts were mentioned most often: Business experts/advisors (17%) Politicians Friend/Family(9%)member (3%) ARIZONA MINORITY BUSINESS ENTERPRISE REPORT 35 STUDY FINDINGS SECTION IV. ROLE MODELS/RESOURCES PEOPLE TO ADVISE BUSINESS TOP MENTIONS Chart 16 People to Advise Business Top Mentions 2% 3% 9% 17% 17% 29% 0% 10% 20% 30% 40% CELEBRITIES FAMILY MEMBER/FRIENDPOLITICIANS SPECIFIC BUSINESS LEADERS BUSINESS EXPERTS/ADVIS ORSC P A, I T , M&A, HR. SUCCESSFUL DON'T KNOW/NO ONE individual mentions were less than 1% *ALL INDIVIDUAL MENTIONS WERE LESS THAN 1% N=288

36 UTAH MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS SECTION IV. ROLE MODELS/RESOURCES NOTE: OTHER INDIVIDUAL COMMENTS MADE BY 1% OR LESS NOT LISTED N= 288 Chart 17 People to Advise Business Top Names Mentioned 2% 2% 5% 7% 0% 5% 10% MICHELLE OBAMA MARCUSDONALDLEMONISTRUMPELONMUSK Other individual comments made by 1% or less not listed PEOPLE TO ADVISE BUSINESS TOP NAMES MENTIONED

UTAH MINORITY BUSINESS ENTERPRISE REPORT 37 STUDY FINDINGS SECTION IV. ROLE MODELS/RESOURCES “IF YOU COULD HAVE ANYONE IN THE WORLD VISIT YOUR BUSINESS” COMMENTS… OFFICE EQUIPMENT SALES/SERVICE

Famous Amos Cookie guy. He started a business during the time when being a minority own business was difficult due to discrimination, but he was able to preserve.

It would be nice to have the governor see what we do so we can to explain Gordon Ramsey. He could help us with good tips and promotions.

CONSTRUCTION INDUSTRY

E-COMMERCE

Bill Gates because he started a tech business with no capital and no experience and was able to grow it into a multi-billion dollar company.

MEDIA PRODUCTION COMPANY

our concerns and our business model. BAKERY

A lot of work with Space X and Elon Musk would be perfect, He is a large supplier for us and would be good to be more involved in future projects and plans for us. SERVICES

Any investor or someone to take over the investor part of the business. Because that is the least fun for me.

Among those who work outside of Utah in the U.S. (besides online business): More than one-third work throughout the U.S. – i.e., multiple states throughout the U.S. (41%).

WHO ARE THE CUSTOMERS?

38 UTAH MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS SECTION V. BUSINESS CHARACTERISTICS WHAT ARE THE CHARACTERISTICS OF MBES?

More than half are family-owned (58%). Almost half (41%) are home-based businesses (26% for non-MBE)

One-third (31%) do work with the government. WHERE ARE THEIR CUSTOMERS/EMPLOYEES?

A key screening criterion for survey participants was that the businesses had to have at least one full-time employee. A PROFILE OF UTAH MINORITY BUSINESS ENTERPRISE INCLUDES:

Half (51%) were women-owned businesses (32% for non-MBE)

More than half do work in retail (56%). Half do work with other businesses (B to B - 48%).

More than open-third (40%) seek after government or private contracts as a source of Therevenue.topthree industries MBEs work are Services, Construction and Accommodations/ Food Service.

Service area – By design, the survey targeted businesses who work in rural areas in order to better understand those working in HUBZone areas (SEE SECTION ON HUBZONE). One-third (35%) of these firms conduct business outside of Utah and within the U.S. and 16% conduct business international ly.

A total of 7% are not-for-profit (12% for non-MBE)

Median age of the business is 9 years old.

Median revenue was $182,142 in 2021. Median staff size is 4 employees. (6 for non-MBEs)

COMPARISON BETWEEN MBES AND NON-MBES

One the main differences that surfaced is how well businesses were prepared to handle something like a pandemic. Financially, non-MBEs seemed to have a stronger foundation before the pandemic began than MBEs.

A report by the House of Representatives Small Business Committee, indicated differences in the availability of private or government assistance with MBEs and non-MBEs.

In a May 2020 McKinsey survey, more than 50 percent of surviving Black-owned businesses reported being very or extremely concerned about the viability of their business. SCORE, one of SBA’s largest Resource Partners, also conducted a client survey in August 2020. Of the roughly 3,500 responses, they found that Black-owned businesses were significantly more disrupted than their white counterparts and were more likely to seek, but less likely to receive, additional private or government assistance. (6)

UTAH MINORITY BUSINESS ENTERPRISE REPORT 39 STUDY FINDINGS SECTION V. BUSINESS CHARACTERISTICS

MBEs are more likely to do business with government compared to non-MBEs.

Among those who work internationally (besides online business): Almost half service Europe (46%) 27% serve Canada 15% serve in multiple countries worldwide.

Some key demographic differences identified that MBEs were significantly smaller than non-MBEs in general. MBE companies had significantly lower annual revenues, were newer companies (years in business), and more likely to be home-based than non-MBEs.

40 UTAH MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS SECTION V. BUSINESS CHARACTERISTICS BOLDED FIGURES ARE SIGNIFICANTLY DIFFERENT (MEDIAN DIFFERENCES USE MANN-WHITNEY TEST) SAMPLE SIZE MEDIAN REVENUE MEDIAN NUMBER OF EMPLOYEES MEDIAN AGE OF COMPANY BUSINESS DESCRIPTIONS Home-basedFamily-owned CUSTOMER DESCRIPTIONS Retail GovernmentBusinessconsumers GEOGRAPHIC SCOPE Conducts business internationally Conducts business nationally MBE 179 $182,142 4 9 years 58%41% 48%56% 31% 35%16% Non-MBE 477 $406,250 6 16 years 49%26% 49%61% 22% 15%41% MBE BUSINESS CHARACTERISTICS

UTAH MINORITY BUSINESS ENTERPRISE REPORT 41 STUDY FINDINGS SECTION V. BUSINESS CHARACTERISTICS Chart 19 Type of Business 10% 1% 1% 2% 2% 2% 3% 5% 5% 6% 6% 6% 6% 9% 10% 28% 0% 10% 20% 30% UNABLE TO FINANCECATEGORIZE/REFUSEDUTILITIESANDINSURANCEEDUCATIONALSERVICESAGRICULTURE ADMIN. SUPPORT, WASTE MGMT & REMEDIATION TRANSPORTATION ANDWHOLESALEWAREHOUSINGTRADE HEALTH CARE AND SOCIAL ASSISTANCE REAL ESTATE, RENTAL & OTHERACCOMODATIONPROFESSIONALMANUFACTURINGLEASINGRETAILTRADESERVICESANDFOODSERVICESCONSTRUCTIONSERVICES(EXCEPTPUBLICADMIN.) TYPE OF BUSINESS Chart 18 Customer Segments Served 31% 48% 56% 0% 20% 40% 60% GOVERNMENT (CIT Y, STATE, RETAILMUNICIPALITIES)FEDERAL,BUSINESSESCONSUMERS CUSTOMER SEGMENTS SERVED N=179 N=179

42 UTAH MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS SECTION V. BUSINESS CHARACTERISTICS Chart 21 Length of Time in Business Age of Business Median 9 Years 3 years or Less 25% 4 to 5 years 18% 6 to 10 years 22% 11+ years 35% N=172 (7 did not report business age) ANNUAL REVENUE MINORITY-OWNED BUSINESSES Chart 20 Annual Revenue Minority Owned Businesses Revenue in 2021 Median $182,142 Less than $100,000 40% $100,000$499,999to 26% $500,000$999,999to 12% $1M to $4.9M 12% $5M+ 9% N=257 (29% did not report revenue) Revenue in 2021 Median $182,142 N=121 (29% did not report revenue) N=172 (7 did not report business age) Age of Business Median 9 Years LENGTH OF TIME IN BUSINESS

UTAH MINORITY BUSINESS ENTERPRISE REPORT 43 STUDY FINDINGS SECTION V. BUSINESS CHARACTERISTICS MBE Service Area (Besides Internet-based business) 16% 35% 57% 49% 46% 39% 0% 10% 20% 30% 40% 50% 60% WITHINTHROUGHOUTINTERNATIONALLYTHEU.S.WITHINSTATEWITHINCOUNTYWITHINCITY/TOWNNEIGHBORHOOD n=166 MBE SERVICE AREA (BESIDES INTERNET-BASED BUSINESS) NORTHWEST 17% SOUTHWEST 21% MIDWEST 10% SOUTHEAST 7% NORTHEAST 7% ALL STATES 41% Chart 23 Span of National Business U.S. map with percentage of those who do business by section of the U.S.-both national and international businesses. Sample size: n=58 Those who work outside of Utah in the U.S. SPAN OF NATIONAL BUSINESS U.S. MAP WITH PERCENTAGE OF THOSE WHO DO BUSINESS BY SECTION OF THE U.S.– BOTH NATIONAL AND INTERNATIONAL BUSINESSES. SAMPLE SIZE: N=58 THOSE WHO WORK OUTSIDE OF UTAH IN THE U.S. N=166

44 UTAH MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS SECTION V. BUSINESS CHARACTERISTICS SPAN OF INTERNATIONAL BUSINESS WORLD MAP WITH PERCENTAGE OF THOSE WHO DO BUSINESS IN EACH CONTINENT CANADA 27% MEXICO 15% EUROPE 46% AUSTRALIA 4% AFRICA 4% SOUTH AMERICA 15% AMERICACENTRAL 12% WORLD WIDE 15% ASIA 19% Chart 24 Span of International Business World map with percentage of those who do business in each continent. Sample size: n=26 Those who work internationally SAMPLE SIZE: N=26 THOSE WHO WORK INTERNATIONALLY

UTAH MINORITY BUSINESS ENTERPRISE REPORT 45 STUDY FINDINGS SECTION VI. OWNER CHARACTERISTICS WHO OWNS THESE MINORITY BUSINESS ENTERPRISES? MBE owners are educated, have higher income than the general public. They are also multi-lingual, are middle-aged, and have wide spread of political affiliations. Characteristics of the owners of MBEs included: Most started the company (91%) Were born in the U.S. (66%) Half speak another language besides English (61%) o 61% speak Spanish (of those who speak a second (or more) language Average age of the owner is 47 years old. Political affiliation: o Independent – 30% o Republican – 24% o Democrat – 17% o Other – 7% o No preference – 3% o Refused – 19% oEducation:College graduate – 57% Owner’s median annual income in 2021: o $88,750 Compared to the general population – MBE owners were significantly more likely to have a college degree (22 percentage points higher) and had 20% higher annual income compared to the state’s median household income *.2020 Utah education attained – 35% college degree (7) compared to 57% among MBEs owners in 2022 2020 Utah median household income – $74,197 (7) compared to the $88,750 among MBE owners in 2021. * Note: The income for MBE owners is not a direct comparison with the overall household figures because the state’s 2020 median income accounts for multiple wage earners in the home compared to the MBE owner’s individual income. The difference of MBEs household income would be even greater than Utah household income. In addition, the 2021 median income figures were not available at the writing of this report for comparison to the 2022 MBE report.

46 UTAH MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS SECTION VI. OWNER CHARACTERISTICS BOLDED FIGURES ARE SIGNIFICANTLY OWNERDIFFERENT.PROFILE MBE Non-MBE SAMPLE DEMOGRAPHICSSTARTEDSIZECOMPANY Average PercentageAgewith college degree or more education Median Household Income CULTURE/LANGUAGE Born in U.S. Speak another language besides English POLITICAL AFFILIATION RefusedNoOtherDemocratRepublicanIndependentpreference 179 4791%years $88,75057% 66%61% 30% 24%17% 3%7% 19% 477 5271%years $96,78663% 96%27% 24% 33%11% 3%4% 26%

BEING A MBE

CHALLENGES/STRATEGIES

One of the focuses of the research was to listen to challenges and strategies of businesses in rural and economically distressed areas as defined by their location via “HUBZones.” The Small Business Administration defines HUBZones as “... small business in historically underutilized business zones.” (1). HUBZone business from both urban and rural locations were used in this research, but rural areas were targeted when possible. Business comparisons were made with the following groups: Operating in a HUBZone Not Operating in a HUBZone Minority Business Enterprise operating in a HUBZone.

Keeping employees, experiencing decrease in sales and having supply chain challenges were the top three challenges for both the HUBZone and non-HUBZone businesses.

CHALLENGES/STRATEGIES

UTAH MINORITY BUSINESS ENTERPRISE REPORT 47 STUDY FINDINGS

SECTION VII. RURAL AND ECONOMICALLY DISTRESSED AREAS

HUBZone and non-HUBZone businesses appeared to experience relatively comparable levels of challenges – 53% could not thing of any challenges among HUBZone MBEs compared to 45% nonHUBZone MBEs.

MBEs were more likely to seek help/advice (17%) than HUBZone MBEs (4%).

The most often mentioned top-of-mind challenge mentioned was being taken seriously for both groups. (7% HUBZone MBEs compared 13% non-HUBZone MBEs). HUBZone MBEs were more likely to say they “work harder” (46%) than non-HUBZone MBEs Non-HUBZone(23%).

DURING THE PANDEMIC HUBZone businesses generally faced the same challenges and used similar strategies during the pandemic as those not operating in a HUBZone.

o MBEs in HUBZones were more likely to mention being affected by drop in sales (37%) than non-HUBZone businesses (22%). The top three strategies used by HUBZone businesses were changing marketing/ communication efforts, following CDC guidelines, making staff changes, and changing ooperations.MBEsin HUBZones were more likely to advertise (16%) than non-HUBZone businesses (5%).

48 UTAH MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS SECTION VII. RURAL AND ECONOMICALLY DISTRESSED AREAS ACCESS TO CAPITAL MBEs in HUBZones are more slightly more likely to feel gaining access to capital is a significant challenge (28%) than non-HUBZone businesses (15%). BUSINESS CHARACTERISTICS A comparison of the business characteristics of HUBZone MBE highlight that they tend to be smaller (lower revenue), more likely to be home-base and newer than non-HUBZone businesses. BOLDED FIGURES ARE SIGNIFICANTLYBUSINESSDIFFERENT. CHARACTERISTICS HUBZ one /N on -HUBZ one /HUBZ one MBE s $350,000187715years49% 21% 40%35%32%13% NonHUBZone $390,909489514years52% 33% 38%38%31%16% HUBZoneMBE 43 $166,667 4 7 40%years54%37%37%33%10% HUBZone SAMPLE SIZE MEDIAN REVENUE MEDIAN NUMBER OF EMPLOYEES MEDIAN AGE OF COMPANY BUSINESS DESCRIPTIONS Woman-ownedHome-basedFamily-owned ACTIVELY SEEKS GOVERNMENT AND PRIVATE CONTRACTS GEOGRAPHIC SCOPE Conducts business throughout U.S. Conducts business internationally

pandemic Advertise

applying for loans.

in sales

pandemic

UTAH MINORITY BUSINESS ENTERPRISE REPORT 49 STUDY FINDINGS SECTION VII. RURAL AND ECONOMICALLY DISTRESSED AREAS BOLDED FIGURES ARE STATISTICALLY DIFFERENT. OWNER CHARACTERISTICS $92,85768%18729%59%54 NonHUBZone 48975% 34% $99,16762%53 HUBZoneMBE 43 86% 54% $75,00055%52 HUBZone SAMPLE STARTEDSIZETHE COMPANY SPEAKS A SECOND LANGUAGE COLLEGE GRADUATE AVERAGE AGE MEDIAN INCOME HUBZone MBE business owners are not significantly different than most of the non-HUBZone businesses. IMPLICATIONS

Most responses by HUBZone MBEs and non-HUBZone businesses were similar. Compared to non-HUBZone businesses, HUBZone MBEs were more likely to: Experience significant decrease during as a strategy during Be significantly challenged Be significantly smaller (in and newer. Overall, HUBZone MBEs appear to have been more severally affected by the than non-HUBZone businesses, at least in part due to their smaller more

pandemic.

size and

limited access to capital.

revenue)

SECTION INDIGENOUS COMMUNITY/REMOTE TRIBAL

Restrictive government regulations. It created an extra layer of work to comply with government regulations.

CONSTRUCTIONChallenges:

HOTEL/BED AND BREAKFAST

MBEs in Tribal Communities experienced similar issues as MBEs overall during the pandemic. These surviving businesses felt the biggest challenges were: Keeping employees (4 of 16) Decreasing sales/loss of business (4 of 23) Their top strategies to survive/get through the pandemic were: Changed their marketing efforts (3 of 16) Changed staff (3 of 16) In addition, half received a PPP loan (56%)

Strategies Nothing really, I just work through the government regulations

CHALLENGES

Challenges: Keeping staff. They worked for a week and quit or I will interview them and offer a job and they don’t show up the next day. I turnover 19 employees a month.

COMMUNITIES

CHALLENGES/STRATEGIES

50 WestGroup was able to conduct 16 interviews with businesses in Indigenous Communities/Remote Tribal Communities in Utah to provide some insights into their needs and strategies. Some of the businesses are located close to urban areas, but most were in rural areas.

DURING THE PANDEMIC WITH BUSINESSES IN INDIGENOUS COMMUNITIES COMMENTS

DURING THE PANDEMIC

UTAH MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS

Strategies: Used the Indeed app; used that to set up staff for all shifts

VIII.

UTAH MINORITY BUSINESS ENTERPRISE REPORT 51 STUDY FINDINGS SECTION VIII. INDIGENOUS COMMUNITY/REMOTE TRIBAL COMMUNITIES HOSPITALITYChallenges: Getting customers in because of the travel restrictions and keeping people healthy and had to let go of some people Strategies: Applied PPP bailout and keep it going with minimal staff. ACCESS TO CAPITAL Gaining access to capital among Tribal Community MBEs is clearly a significant challenge (7 out of 16). A majority (10 of 16) currently finance their business from within the business or personal loans. ADDRESSING CAPITAL ACCESS CHALLENGES COMMENTS CEMENT COMPANY Worked harder to gain funding through other venues. HOME HEALTH CARE Used family finances and a personal lines of credit, Opened a personal credit cards instead of business credit cards. AUTOMOTIVE REPAIR SHOP Kept working hard

52 UTAH MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS SECTION VIII. INDIGENOUS COMMUNITY/REMOTE TRIBAL COMMUNITIES BUSINESS CHARACTERISTICS MBEsINDIGENOUSAMERICANINDIAN,COMMUNITY Relatively smaller sample sizes made it difficult to compare business characteristics between those in Tribal Communities and MBEs overall. The following are some comparisons to serve as points of reference, but none were considered significantly different. SAMPLE SIZE MEDIAN NUMBER OF EMPLOYEES MEDIAN AGE OF COMPANY CUSTOMERS Seeks government/Private contracts GEOGRAPHIC SCOPE Conducts business throughout U.S. Conducts business internationally 16 4 1056%56%years31% 179 4 940%years35%16%

UTAH MINORITY BUSINESS ENTERPRISE REPORT 53 STUDY FINDINGS SECTION VIII. INDIGENOUS COMMUNITY/REMOTE TRIBAL COMMUNITIES OWNER CHARACTERISTICS

MBEs in Tribal Communities tended to profile very similarly with MBEs in general regarding the challenges they faced and strategies they took to overcome them. The main difference was that MBEs in Tribal Communities seemed to have more challenges gaining access to capital, compared to other MBEs and

IMPLICATIONS

Business owners in Tribal Communities appeared to have lower personal incomes than MBE owners over.

non-MBEs. $95,0005540%88%16years67% MBEs $88,7504791%17961%years57% INDIGENOUSAMERICANINDIAN,COMMUNITY SAMPLE MEDIANEDUCATIONAVERAGESPEAKSSTARTEDSIZECOMPANYANOTHERLANGUAGEAGEOFOWNER–COLLEGEDEGREEINCOME

Similar to business characteristics, the relatively smaller sample sizes made it difficult to compare owner profiles between those in Tribal Communities and MBEs overall.

STUDY BACKGROUND AND METHODOLOGY 54 NEVADA MINORITY BUSINESS ENTERPRISE REPORT WHAT IS THE HISTORY BEHIND THE STUDY?

2007 — The survey grew to include both Hispanic and non-Hispanic minorities.

WHAT BUSINESSES PARTICIPATED IN THE SURVEY?

2012 — The Arizona Minority Business Center and Arizona Hispanic Chamber of Commerce became the primary project coordinators for the study and expanded the reporting to include individual reports businesses owned by minorities overall, Hispanic (specific), women, and families.

A. Defining the business — This study focuses on businesses that have at least one full-time employee. It is important to note that the definition of what is considered a “business” varies widely among sources and might present a challenge when comparing data and findings.

The Arizona Minority Business Center and Arizona Hispanic Chamber of Commerce would like this study to be a resource for government officials, planners and analysts; business and community leaders; and educators who want to understand the needs of minority-owned businesses. This research is designed to provide a voice to minority-owned businesses and let them give direction to these supporting organizations.

1990 — Dr. Loui Olivas began conducting research with Hispanic businesses as an annual project with the Hispanic Research Center at Arizona State University.

WHY ARE THE ARIZONA MINORITY BUSINESS DEVELOPMENT CENTER AND ARIZONA HISPANIC CHAMBER OF COMMERCE CONDUCTING THIS RESEARCH?

B. Defining minority businesses – Using the Arizona Minority Business Development Center definition, “Minority group members are United States citizens who are Asian, Black, Hispanic and Native American. Ownership by minority individuals indicates that the business is at least 51% owned by such individuals or, in the case of a publicly-owned business, at least 51% of the stock is owned by one or more such individuals i.e. the management and daily operations are controlled by those minority group members.” (8)

2005 — WestGroup Research was hired to conduct the survey. The methodology was switched from mail to telephone survey and the sample size of businesses increased at this time.

The 2022 MINORITY BUSINESS ENTERPRISE SURVEY is the part of a series of related studies which began in 1990. The following is a brief timeline of these studies.

2022 — The study focused on the impact of the pandemic on MBEs and included economically disadvantaged/ rural locations as well as Indigenous Native American businesses. The study grew to include Arizona, Nevada and Utah.

UTAH MINORITY BUSINESS ENTERPRISE REPORT 55 The following is a breakdown of various groups that participated in the research. STUDY BACKGROUND AND METHODOLOGY MINORITY GROUP REPRESENTATION 52%14%14%9%5%3% MINORITY GROUPS PERCENTUNWEIGHTEDRESPONSE NATIVE/HAWAIIANAMERICANASIANAFRICANHISPANICAMERICANINDIANOR OTHER PACIFIC ISLANDER OTHER C. Rural and economically distressed areas – One of the focuses of the research was to listen to minorities in rural and economically distressed areas as defined by their location via “HUBZones.” The Small Business Administration defines HUBZones as “... small business in historically underutilized business zones.” (1) 20%58%12%10% EMPLOYEES PERCENTUNWEIGHTEDRESPONSE 1 TO 4 5 TO 9 10 TO 19 20 OR MORE NOTE: ROUNDING RESULTS IN TOTALS GREATER OR EQUAL TO 100% D. Number of Paid Employees

UTAH MINORITY BUSINESS ENTERPRISE REPORT STUDY BACKGROUND AND METHODOLOGY

WHO WAS INTERVIEWED FOR interviewers screened order reach person cases, conducted with

This year’s study expanded to include Arizona, Nevada and Utah. The overall survey results of the 1,983 interviews from the three states have a margin of error of +/-2.2% at the 95% confidence level. The 676 interviews in Utah have a margin of error of +/- 3.8 % at the 95% confidence level. Subgroups with smaller sample sizes have a larger margin of error.

in the organization. In most

56 HOW MANY/WHERE/HOW WAS THE SAMPLE DRAWN FOR THE STUDY?

interviews were

the owner/Chief Executive Officer or President. MINORITY GROUPS 51% RESPONSEPERCENT WOMEN-OWNED 22%67%6%7% POSITION RESPONSE*PERCENT ADMINISTRATOR/MANAGEROWNER/CEO/PRESIDENT BOARD MEMBER/EXECUTIVE MANAGEMENT OTHER E. Woman-owned MBEs

Completed

The following sample sizes were completed: Completed 179 MBE interviews (margin of error +/- 7.3 at the 95% confidence level).

respondents in

Completed 477 non-minority business interviews (margin of error +/- 4.5 at the 95% confidence level). 187 businesses within HUBZones; (margin of error +/- 7.2 at the 95% confidence level).

the “highest level”

THE UTAH SURVEY? Telephone

Utah had significantly fewer minority businesses to contact for this study compared to the other states in the study. All sources of minority-owned businesses were used until sample was no longer available. For example, the total number of Utah MBEs with paid employees in the state as of 2018 were 4,866 businesses compared to Arizona’s 16,438.

Respondents were given the option to include their name for a drawing for one of 10 $100 gift certificates.

WHAT METHOD WAS USED TO CONDUCT THE RESEARCH?

The Utah surveying began on April 1, 2022, and was completed on April 20, 2022. WAS AN INCENTIVE USED TO ENCOURAGE PARTICIPATION?

Data weighting was used when combining the various quotas in order to provide a representative sample of each state.

Minority Business Development Agency Business Center Small Business Administration Chambers of Commerce throughout the Utah

UTAH MINORITY BUSINESS ENTERPRISE REPORT

STUDY BACKGROUND AND METHODOLOGY

The sample used for this study was purchased from various sources, including Scientific Telephone Samples. The following organizations supplemented the sample by providing contact lists: Arizona Hispanic Chamber of Commerce

The survey was conducted through telephone interviews. Due to the high incidence of Hispanic businesses, respondents were given the option of participating in the interview in Spanish. WHEN WAS THE SURVEY CONDUCTED?

Completed 489 interviews with business outside of the HUBZones (margin of error +/- 4.4 at the 95% confidence level). Completed 16 interviews with businesses with Indigenous Native American ownership.

58 UTAH MINORITY BUSINESS ENTERPRISE REPORT STUDY BACKGROUND AND METHODOLOGY For more information about the research, please email your questions or requests to: ARIZONA HISPANIC CHAMBER OF COMMERCE MS. MONICA S. VILLALOBOS MonicaV@azhcc.com WESTGROUP RESEARCH MR. GLENN IWATA glenn@westgroupresearch.com CONTACT INFORMATION

UTAH MINORITY BUSINESS ENTERPRISE REPORT 59 1. U.S. Small Business Administration, 409 3rd St, SW. Washington DC 20416, https://www.sba.gov/federalcontracting/contracting-assistance-programs/hubzone-program

Enterprises A REVIEW OF EXISTING DISPARITY STUDIES” PREPARED FOR Minority Business Development Agency Under Contract

4. New York Times, “Minority Entrepreneurs Struggled to Get Small Business Relief Loans,” April 4, 2021, https://www.nytimes.com/2021/04/04/business/ppp-loans-minority-businesses.html U.S. Census, 2021 Annual Business Study, ABS Financing Module, https://www.census.gov/data/tables/2021/ econ/abs/2021-abs-financing-module.html Chairwoman Nydia M. Velazquez, House Committee on Small Business, “The State of Black Owned Small Businesses in America,” https://smallbusiness.house.gov/uploadedfiles/bob_report_final.pdf U.S. Census, 2020 Quick Facts, https://www.census.gov/quickfacts/fact/table/US/HCN010212 Quantitative Consulting Inc., “Contracting Barriers and Factors Affecting Business SB1352-15-SE-0425.

2. Nicols, Chris, “Fact-check: Have one-third of US small businesses closed during the pandemic?“ PolitiFact. com, fact-check/7602531002/https://www.statesman.com/story/news/politics/politifact/2021/06/08/kamala-harris-small-business-closures-covid-

3. Duke University’s Fuqua School of Business, “Three Factors Contributing to the Ongoing Global SupplyChain Crisis,” December 13, 2021 or%20nearcontributing-ongoing-global-supply-chain-crisis#:~:text=It%20aphttps://www.fuqua.duke.edu/duke-fuqua-insights/robert-swinney-three-factors-pears%20that%20three%20major,often%20run%20at%20