NEVADA Minority Business Enterprise Study Report (2022)

NEVADA STUDYENTERPRISEBUSINESSMINORITYREPORT 2022

1MINORITY BUSINESS ENTERPRISE REPORT NEVADA 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 NEVADA STUDYENTERPRISEBUSINESSMINORITYREPORT 2022

2 NEVADA 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)

NEVADA MINORITY BUSINESS ENTERPRISE REPORT 3 STUDYSTUDYCONCLUSIONSSTUDYACKNOWLEDGEMENTSHIGHLIGHTSOVERVIEWFINDINGS SECTION I. Challenges/Strategies – COVID Pandemic BUSINESS PROFILE – Sierra Winds Products for Leisure, Owner: Dick Olivas 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 393528251091111424552545964 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:

HIGHLIGHTS NEVADA

DECREASED SALES/LOSING CUSTOMERS – Mentioned by 24% of MBEs top-of-mind – The most often mentioned challenge by Nevada MBEs was a financial hit caused by the economic shutdowns at the start of the pandemic. Most of those who participated in the survey were in some level of recovery by the time of the survey.

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. Comparisons were also made with businesses located in Historically Underutilized Business Zones (“HUBZones”), (1) and businesses operating in Indigenous ACommunities.totalof657 telephone interviews were conducted with Nevada businesses from February 15 through March 30, 2022. This was broken down into 288 MBEs and 347 non-MBEs (22 were not identified). 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 (23 Theinterviews).businesses represent a range of industries, company sizes and locations throughout the state.

MBE CHALLENGES DURING THE PANDEMIC – Most MBEs surveyed faced at least some type of challenge during the pandemic. The following were among the top three challenges facing Nevada MBEs (and non-MBEs) during the pandemic that followed a progression of how the pandemic affected businesses.

STUDY MINORITY BUSINESS ENTERPRISE REPORT

4

SURVIVING AND RECOVERING – 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 during) the pandemic and have recovered/are in the process of recovering.

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.

– Mentioned by 20% of MBEs top-of-mind – While many of the businesses had layoffs during the initial stages of the pandemic, the next step involved restarting their businesses or recovering from the initial shutdowns, which meant re-staffing or trying to “get back to normal.” 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.

ACCESS TO CAPITAL – Mentioned by 9% of MBEs top-of-mind – In Nevada, access to capital surfaced as the main difference between MBEs and non-MBEs.

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)

REDUCING THE DAMAGE – Mentioned by 8% who said “remote workforce,” 8% “changed operations,” 7% “changed hiring practices” of 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 of the length of the pandemic, and were typically the first solutions that were implemented.

NEVADA MINORITY BUSINESS ENTERPRISE REPORT 5 STUDY HIGHLIGHTS WORKFORCE ADJUSTMENTS

PANDEMIC STRATEGIES – 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.

SEEKING HELP/APPLIED FOR LOANS – Mentioned by 12% of MBEs top-of-mind --As expenses mounted, businesses began to apply for the government loans that were made available. Almost half the MBEs surveyed applied and received some government assistance (e.g., Paycheck Protection Program and Economic Injury Disaster Loans). While most MBEs are self-funded without much reliance on commercial, government or private funding, the PPP and EIDL were part of the strategies tried during this phase.

SUPPLY CHAIN PROBLEMS – Mentioned by 13% of MBEs top-of-mind – The public’s initial pandemic concerns resulted in supply chain issues at the consumer level (e.g., toilet paper shortages). Two years later, businesses experienced broader supply chain issues that continue to affect operations and revenue.

INCREASING MARKETING EFFORTS – Mentioned by 17% of MBEs top-of-mind --As the pandemic continued, MBEs needed to identify new revenue sources to make up for the lost

o Greater challenge – More than half (57%) of MBEs said gaining access to capital was at least somewhat of a challenge (compared to 29% of non-MBEs).

ADDRESSING MINORITY CHALLENGES – The main strategies used to address the negative impacts of being a minority-owned business involved increasing their visibility through various marketing efforts. Most network with other MBEs (72%). More than half (59%) promote the fact they are an MBE, and half (51%) use their minority status to pursue business opportunities.

MINORITY BUSINESS CHALLENGES/STRATEGIES

When asked specifically (aided questions), access to capital was one of the top themes that preceded the pandemic and continues to affect these businesses during the recovery.

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 (35%).

NEGATIVE PERCEPTIONS – Despite the overwhelming impact of the pandemic on their businesses, these owners were also aware of negative repercussions associated with being an MBE. Almost half (46%) felt they had to overcome negative perceptions of being a minority-owned business. One-third felt cultural differences had an impact on their business and the same percentage felt they were treated differently because they are minority owned.

6 NEVADA MINORITY BUSINESS ENTERPRISE REPORT STUDY HIGHLIGHTS

MBE VS. NON-MBE DIFFERENCES

o Treated with respect – A total of 23% disagreed with the statement that they were “treated with respect when applying for a business loan.”

customers. The top pandemic strategy mentioned involved changes to marketing efforts. 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.

ACCESS TO CAPITAL

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

Safety – The main significant differences between these groups was that HUBZone businesses were more likely to be challenged with keeping employees and customers safe from the virus.

More aggressive response – When asked what they would have done different, MBEs in HUBZones were more likely to have tried some strategy (i.e., any of those listed) mentioned by 52% compared to those not in a HUBZone (32%).

BUSINESS CHARACTERISTICS

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.

oEducation:College graduate – 62% (63% for non-MBEs) Owner’s median annual income in 2021 o $90,476 ($113,157 for non-MBEs)

NEVADA MINORITY BUSINESS ENTERPRISE REPORT 7 STUDY HIGHLIGHTS

The following are some of the characteristics of an MBE during 2022. Median revenue was $156,000 in 2021 ($375,000 for non-MBEs) Median staff size is 3 employees. (5 for non-MBEs) Median age of the business is 6 years old (18 years for non-MBEs)

PANDEMIC CHALLENGES

The following is a profile of the MBE owners: Average age of the owner is 48 years old (56 for non-MBEs).

RURAL AND ECONOMICALLY DISTRESSED AREAS

OWNER CHARACTERISTICS

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.

Challenges during the pandemic were not significantly different between businesses in HUBZones and those non-HUBZone businesses. The top three challenges, loss of sales, keeping employees and supply chain issues were the same for HUBZone, MBE HUBZone and non-HUBZone businesses.

Access to capital – HUBZone MBEs were more likely to feel that gaining access to capital was a significant challenge (44%) than the other groups (24% HUBZone overall to 24% Non-HUBZone).

Business Characteristics – HUBZone businesses MBEs were almost half the median revenue size ($136,363 in 2021 revenue) of non-HUBZone businesses ($248,000 in 2021 revenue).

ACCESS TO CAPITAL Gaining access to capital among Tribal Community MBEs is clearly a significant challenge (48%).

8 NEVADA MINORITY BUSINESS ENTERPRISE REPORT STUDY HIGHLIGHTS

INDIGENOUS COMMUNITY/REMOTE TRIBAL COMMUNITIES

BUSINESS/OWNER

PROFILE DIFFERENCES

WestGroup completing 23 interviews with businesses in Indigenous Communities/Remote Tribal Communities in Nevada (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.

PANDEMIC CHALLENGES/STRATEGIES

Supply chain shortages (5 of 23) Decreasing sales/loss of business (4 of 23) Staying in touch with employees/customers (3 of 23) Being forced to shut down due to the pandemic (3 of 23) Their top strategies to survive/get through the pandemic were: Changed their marketing efforts (5 of 23) Changed their operations (4 of 23) Followed CDC guidelines (4 of 23)

Owner Characteristics – HUBZone MBE business owners made less income ($75,000), than non-HUBZone companies ($100,345) comparing 2021 annual salaries.

3. Finding access to capital was one of the major differences that MBEs faced at a significantly higher level than non-MBEs. These concerns occurred at two levels – Availability of funds and support in the loan application process. A review of survey comments highlighted a number of owners who have been frustrated with trying to find loans for MBEs. In addition, the difficulty with the loan application process has limited businesses the opportunity to expand. Education and availability are key to helping these MBEs now and in the future.

1. MBEs faced greater challenges during the pandemic and had to be more aggressive in trying to address these challenges than non-MBEs. Contributing to this was that MBEs were generally smaller and did not appear to have the financial resources and experience that non-MBEs had in order to handle the pandemic challenges.

2. The pandemic continues to challenge Nevada MBEs with workforce shortages and supply chain delays. Even at the time of this report, concerns about COVID variants appear to be far from over which makes determining next steps more difficult for these businesses.

NEVADA MINORITY BUSINESS ENTERPRISE REPORT 9 CONCLUSIONS

4. Businesses operating in rural/economically distressed areas businesses as well as those in Indigenous Communities have typically experienced greater needs during the pandemic (lost business, workforce issues, and supply chain problems) and have had to be more aggressive to overcome these obstacles compared to non HUBZone areas. They also had greater concerns/ limitations from lack of capital options.

10 NEVADA MINORITY BUSINESS ENTERPRISE REPORT STUDY OVERVIEW

The 2022 Nevada 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.

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.

The purpose of this study is to help focus how to address 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.

For perspective, the U.S. Census records prior to the pandemic estimated the following in 2018: Nevada had 97,000 minority-owned businesses, which represents the total number of firms with or without paid employees. (A total of 9,612 minority-owned businesses had paid Minority-ownedemployees.)(4)firms represented 36% of all Nevada businesses.(4)

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 Nevada study.

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 in this study represent those that stayed in business throughout the two years since the start of the pandemic. There were 28 out of 288 minority owned businesses that started during the pandemic, but most of the companies were in business since before 2020.

STUDY FINDINGS

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

o Decrease in sales/Lost businesses – One-quarter (24%) specifically mentioned facing significant decreases in sales during the pandemic. It was clear that some businesses had started recovering to pre-pandemic sales levels by the time of this survey in 2022.

o Keeping employees – Mentioned by 20% of the MBEs, the availability of the workforce began to surface as a major challenge when companies began to reopen after the mandated shutdowns. This continues to have a significant impact on businesses trying to recover.

o Supply/inventory shortages – Mentioned by 13% of MBEs top-of-mind, supply chain issues represented a third phase of challenges affecting business during the pandemic. Companies expressed a wide-range of concerns related to the inability to restock inventory, waiting on raw materials for building/manufacturing processes, or cutting back available services/products for retail and/or wholesalers.

SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC

The biggest challenges that both MBEs and non-MBEs faced during the pandemic were

NEVADA MINORITY BUSINESS ENTERPRISE REPORT 11

o Access to capital – Mentioned by 9% of MBEs. The single biggest issue differentiating Nevada MBEs and non-minority businesses is concerns about having access to capital. Reviewing top-of-mind responses, more MBEs mentioned this as a top pandemic issue compared to non-MBEs (1%).

12 NEVADA 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-MINORITYChart 1 Challenges During Pandemic Minority vs. Non Minority 2% 5% 4% 11% 9% 10% 6% 1% 12% 24% 21% 2% 5% 6% 8% 8% 8% 8% 9% 13% 20% 24% 0% 20% 40% EMPLOYEES WORKING FROM HOME CHANGES IN GOVERNMENT CUSTOMERS/EMPLOYEESSHUTTINGNOINFLATION/RISINGREGULATIONSCOSTSPROBLEMS/CHALLENGESDOWNDURINGCOVIDCOMMUNICATINGWITHDURINGQUARANTINEKEEPINGEMPLOYEESFRCATCHINGVIRUSACCESSTOCAPITALSUPPLYSHORTAGES/DECREASEDINVENTORYKEEPINGEMPLOYEESDECREASEINSALES/LOSSOFBUSINESS MBE S N o n - M i n o r i t y Significantly different at 95% confidence level between MBEs and non MBEs individual comments made by 3% or less not listed

NEVADA MINORITY BUSINESS ENTERPRISE REPORT 13 STUDY FINDINGS

1. Changed marketing strategies (17%) – The top strategy focused on recovering the lost revenue streams by 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).

3. Applying for loans (12%) – MBEs were significantly more likely to apply for loans than nonMBEs (5%) in order to get through the pandemic.

7. Changed hiring practices (7%) – Hiring practices changed as the labor pool began to shrink – e.g., expanded efforts to find more employees, Non-MBEs used this strategy more (12%) than MBEs.

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 they tried during COVID.

6. Remote workforce (8%) – Some businesses were able to move their workforce from the office to their homes in order to stay productive while reducing employees’ exposure to COVID.

5. Changed operations (8%) – These changes included, shortened hours, added technology, more outsourcing, and changed inventory practices. When analyzing the data, changes to hiring practices and switching to remote working force (see below), were also considered operational changes.

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

SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC 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.

2. Did nothing (12%) – Those who said they “did nothing” was mentioned throughout the study. “Nothing” takes on a wide range of meaning to these businesses. Some businesses were not negatively affected or actually thrived during the pandemic and did not need to make changes. Some businesses took a wait and see approach. Others tried unsuccessfully to make changes.

4. Following the CDC guidelines (8%) – This strategy focused at two levels – 1. Keeping employees healthy and 2. Providing assurances to customers about the safety of the products, services, and locations. Non-MBEs tended to use this strategy more (16%) than MBEs.

14 NEVADA 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 to Challenges During Pandemic Minority vs. Non Minority black -Significantly different at 95% confidence level between MBEs and non-MBEs individual comments made by 3% or less not listed 2%3%4%4%3% 7% 12% 8%10% 16% 5% 9% 15% 2%3%5%5%6%7%7%8%8%8% 12%12% 17% 0% 10% 20% CHANGED STRATEGIES, SOUGHT HELP, ADVICE NEW REVENUE SOURCES PAID EMPLOYEES MORE DOWNSIDEDCHANGEDOPERATIONS/STAFFWORKEDHARDERSTAFFING/HIRINGPRACTICESC H ANGED A TTITUDESP E RSISTENCE, POSITIVITY CHANGED OPERATIONS SWITCHED TO REMOTE WORKFORCE FOLLOWED CDC APPLIEDMASKS,GUIDELINES,VACCINESFORLOANSDIDNOTHING CHANGED MARKETING STRATEGIES MBE S N o n - M i n o r i t y STRATEGIES/SOLUTIONS TO CHALLENGES DURING PANDEMIC MINORITY VS. NON-MINORITY

Strategy: Keep plugging along, putting ourselves out there; obtain certain certifications and running our business remotely

MBE PANDEMIC CHALLENGES AND STRATEGIES COMMENTS DISASTERS SYSTEMS AND EMERGENCY MANAGEMENT

HEALTHCAREChallenge: Attracting clients, because of their inability to receive service in-person

MAINTENANCE AND REPAIRS

Pivoting – Of these businesses who made it through the pandemic, one key strategy involved changing their marketing strategies – i.e., pivoting from their current efforts and trying new things – new products/ services/lines of business, more advertising/promotions/networking/ social media. Bottom line, even though most businesses cutback operations to reduce costs, these businesses needed to make up for lost revenue on the other side of the P&L statement and bring in business. 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). CONSULTANT

Challenge: Generating new business because of changing Federal guidelines

ACCOUNTING FIRM

– COVID PANDEMIC

SECTION I. CHALLENGES/STRATEGIES/SUCCESSES

Strategies: Sending e-mails all day long every day.

Challenges: Not being able to have contacts with clients…. I have to make contact to shake the hands, but because of COVID, I could not do this.

Challenges: Honestly. it is just getting paid. We are an accounting firm and we are considered “essential.” Payroll goes through us, taxes go through us and these are needed. We continued to work during the pandemic. Our biggest issue was being paid by our clients because their doors were closed or their business was limited.

Strategy: Used “Telehelp” service

NEVADA MINORITY BUSINESS ENTERPRISE REPORT 15 STUDY FINDINGS

One-third of Nevada MBEs received PPP – When asked directly, 39% of the Nevada MBEs mentioned they received PPP loans. Of those receiving PPP loan, roughly half of the businesses received one PPP loan during 2020 and almost half said they received two loans by 2021. MBE vs. non-MBEs – MBEs were more slightly more likely to receive a PPP loan (39%) than non-MBEs (30%). MBEs were also more likely to receive lower loan amounts ($10,000 median loan amount) than non-MBEs ($18,000 median loan amounts).

C. Paycheck Protection Program (PPP) Did you receive a Paycheck Protection Program or PPP loan?

Lost a lot of clients and shutdown business; prices have gone up.

HOME AND COMMERCIAL SECURITY CAMERAS, DATA NETWORKS

CONSTRUCTIONChallenges: Not getting workers and especially not able to get qualified workers.

Strategies: Worked by myself a lot. Went through the effort of finding people.

BOOKKEEPING/PAYROLLChallenges:

Strategies: Increased marketing, cut down employees and raise prices on product or services.

SECTION I. CHALLENGES/STRATEGIES/SUCCESSES

Strategies: Initially, we just allowed clients to pay when they could. After a while it got too much because we had to pay our bills and we didn’t have money coming in. So, we slowly started to discontinue services to these clients.

16 NEVADA MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS

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.

– COVID PANDEMIC

Strategies: Making due with what we have.

Challenges: Having to cater to the customers’ COVID needs, price of insurance has gone up., materials gone up short supply.

New York Times

and

—

businesses were disproportionately underserved

loan program — and interviews

Because lenders not required data on the breakdown has been scarce, but economists have consistently found

Paycheck Protection Program’s racial

signs of gaps. RECEIVED PPP LOAN IN 2020/21

to get access

relief

the aid or

are

NEVADA MINORITY BUSINESS ENTERPRISE REPORT 17 STUDY FINDINGS SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC Received PPP 30% Not Received PPP 59% Don't Know 12% Non-MBE N=347 Received PPP Loan in 2020/21 Received PPP 39% Not Received PPP 54% Don't Know 8% MBE N=288 Among those receiving loan: Received 1 loan 55% Received 2 loans 41% Don’t Know 4% Median loan amount $10,000 Among those receiving loan: Received 1 loan 61% Received 2 loans 34% Don’t Know 6% Median loan amount $18,000 COMPARISON OF MBE SURVEY RESULTS TO NATIONAL PPP NEWS 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.

small businesses and bankers

to collect demographic details on their borrowers,

A analysis of data from several sources including the Small Business Administration, which is managing the with dozens of show that Black- other minority-owned by the effort, often because they lacked the connections to were rejected because of the

program’s rules.

18 NEVADA MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS

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%). (6)

Possible reasons for the potential differences between recent news reports and the MBE study regarding PPP funding include: 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.

Results from the Nevada MBE study highlighted that businesses receiving PPP funds were slightly higher than non-MBEs; in addition, the average funding received by non-MBEs was higher. The difference in the amount of funding highlighted in the article and the MBE study seem consistent.

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.

D. New Lines of Business – Additional questions added to 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 company and opening or expanding another line – e.g. restaurants opening curbside service and closing dine-in options. A total of 12% agreed that they tried “new lines of business” which was higher than non-MBEs (7%).

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. (5)

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.

SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC

NEVADA MINORITY BUSINESS ENTERPRISE REPORT 19 STUDY FINDINGS SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC STARTED NEW LINE OF BUSINESS DURING COVID Non-MBE n=347 Chart 4 Started New Line of Business During COVID Did Not Start New Line 87% Started New Line 12% Don't Know 1% MBE n=288 Did Not Start New Line 91% Started New Line 7% Don't Know 2% E. 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.

Of the 41% who considered their business home-based, 27% switched to home based during the pandemic (11% based to all MBEs).

non-MBEs.Significantly

There were significantly more MBEs who have home-based businesses (41%) than nonMBEs (25%). The percent switching to home-based were fairly comparable between MBEs and more MBEs tried new lines of business than non-MBEs

53% conducted some business online before the pandemic and 60% two years since the start of the pandemic

LEAST SOME ONLINE SALES MBE s NON-MBE s 3% PERCENTAGE HAD ONLINE SALES 48% (PERCENTAGECHANGEPOINTS)

G. Retrospect – What would you have done differently?

AVERAGE PERCENTAGE OF THOSE WHO HAD AT

The average percentage of online business was slightly higher after the pandemic started for MBEs (5 percentage points than before).

– COVID 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 slight shift in increased online business among MBEs (7 percentage points higher than before the pandemic) compared to non-MBEs (1 point higher).

ONLINE SALES AMONG

When asked how they would have changed their response to the pandemic, half of the MBEs said they would have done the same thing (49%) or did not know any other options they would have tried (9%). This was significantly lower than non-MBEs (66%) who would have done the same thing or did not know (9%).

BOLDED FIGURES ARE SIGNIFICANTLY DIFFERENT – PAIRED T-TEST

20 NEVADA MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS SECTION I. CHALLENGES/STRATEGIES/SUCCESSES

53 60% 46% 47% 47% 52% 45% 7% 5%1% PANDEMICBEFORE 2022 NON-MBEMBE s

The average amount of sales online before the pandemic was 47% and 52% two years since the start of the pandemic

Trying

Implemented more technology and better prepared

NEVADA MINORITY BUSINESS ENTERPRISE REPORT 21 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 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 12% 8% 10% 4% 7% 15% 8% 19% 4% 4% 8% 12% 12% 12% 14% 22% 0% 5% 10% 15% 20% 25% IMPLEMENT COVID PROTOCOLS INCREASED MARKETING EFFORTS STAFF CHANGES HIRE MORE OR CUT MORE CLOSED EARLIER LEARNED NEW WAYS TO SELL SERVICES/PRODUCTS MORE TECHNOLOGY, PREP TO REMOTE WORKING APPLIED FOR PPP/GOVERNMENT LOANS SAVE D MORE , STOCKED SUPPL I ES/ I NV E NT O R Y M B E S N o n - M i n o r i t y STRATEGIES/SOLUTIONS SHOULD HAVE TRIED DURING PANDEMIC MINORITY VS. NON-MINORITY

solutions were: Save more/stocked supplies/inventory 22%

stock supplies/inventory

remote working

–

MBEs vs. non-MBE differences – Most of the strategies

MBEs

15%,

–

12%

those who provided steps they might have taken

non-MBEs.

to non-MBEs). Learned new ways to sell services/products

response), the

Applied for the PPP/government funding

Among (based to the 42% who gave a top (MBEs, and 19% among non-MBEs). 14% (MBEs compared to 8% non-MBEs). for environment (MBEs and similar (12% MBEs compared to 7% non-MBEs). to forecasting the future Two of the top three responses required being able to “forecast the impact of the pandemic” i.e. ahead of time and being prepared with the technology (e.g., ready to have a remote work force). Applying for the PPP or other government funding seemed to be a more actionable feasible response in retrospect. mentioned were comparable between and

MEDICAL

I would have bought more inventory ahead of time.

22 NEVADA MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC PANDEMIC STRATEGIES IN RETROSPECT COMMENTS PROJECT MANAGEMENT BUSINESS CONSULTING FIRM

MORTGAGE

Would not have started the business. Everything had to be closed down. SALES

I would have probably tried to maximize revenue sources before the pandemic, I would have attempted to get capital from outside sources other than my own service revenue. AND MERCHANDISING

HEALTHCARE/WELLNESS

E-COMMERCE

I would probably pick a different line of business and certain goods and services were more profitable during the pandemic.

I would have gotten a PPP loan. BROKER

I would have pivoted and tried to do something different (rather than kept doing the same thing) because help/customers did not come fast enough. HOME HEALTHCARE

ENTERTAINMENT

The pandemic did not seem to negatively affect Dick’s business. Sierra Winds already had contracts prior to COVID and continued to work those jobs. Sales continued to grow because customers seemed to be using the slow down during pandemic to improve their properties and add/upgrade recreational equipment. In addition, none of Dick’s installation crew contracted COVID because most of the work was done outside and they were less susceptible to the virus. Staffing issues – The biggest challenge during the pandemic continues to be hiring and expanding the staff. Dick has been trying to increase his workforce to handle the additional growth throughout the pandemic. The available labor force has so many employment options that it is difficult to find and keep staff. Dick talked about how potential workers were being offered $25/hour for entry-level construction jobs in the Reno area. In addition, Dick mentioned, PROFILE Sierra Winds, Inc. owner RICHARD OLIVAS VIce PreSIdent MELANIE HUNTER

NEVADA MINORITY BUSINESS ENTERPRISE REPORT 23 STUDY FINDINGS

WHO IS SIERRA WINDS PRODUCTS FOR LEISURE, LLC?

HOW DID SIERRA WINDS GET STARTED?

SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC

BUSINESS

Sierra Winds represents manufacturers’ of commercial outdoor playground, recreation/sports equipment as well as flagpoles, park shelters, shades, benches, tables all associated with parks or schools. Sierra Winds handles everything for the customer from design through installation.

In August 1979, Dick Olivas began a company called Reno Fasteners that provided supplies to the construction industry, such as nail guns, tools, nuts and bolts. After a few years in the industry, Dick was looking for a new challenge and saw an ad for a sales rep to sell playground equipment. Dick was intrigued at the possibly of selling playground equipment instead of nail guns. He took the job and bought Sierra Winds a few years later. Sierra Winds progressed from serving the Reno/Sparks community and eventually to all of Nevada and areas east of the Sierras since 1985. Over the past 40 years, the company continued to grow, even during the pandemic. WHAT CHALLENGES DID SIERRA WINDS FACE DURING THE PANDEMIC?

The company has several examples of large, high visibility contracts that Sierra Winds has won over the years, such as his work for the Reno Aces, the local minor league baseball club. Being able to drive through the area and point out examples of his work feels like he has “left a mark” in the community.

When Dick started the business, he hoped that his minority business status would help him gain government contracts and available funding. As Sierra Winds grew, the potential contracts did not seem to match his company capacity very well and he was often frustrated by the growing paperwork required by the government, especially during the pandemic.

No one wanted to work because they were receiving $1,200 a week in unemployment and government COVID subsidies.

Keeping the current labor force. Dick has managed to keep his team busy, even throughout the supply chain delays. Rather than layoff and rehire staff, Dick kept his current labor force. I kept the guys busy working, even when we were waiting for projects. During the pandemic, we painted the office and put up a fence at our facility.

After almost 40 years of being in business, Dick has found ways to work around these obstacles through personal sacrifice and strong customer relationships.

Financing – Dick received money through the Paycheck Protection Program (PPP loan), but primarily has had to finance the company out of his own pocket to cover payroll and address the cash flow delays.

– COVID PANDEMIC

Understanding clients – Fortunately, most his customers have been understanding, despite the labor and supply issues delaying some projects several months. Dick has built a strong, loyal customer base through quality products/installations and competitive pricing. A key element that Dick attributes his strong relationship with customers is the time he has spent getting to know their needs and helping them get to know his business.

24 NEVADA MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS

WHAT CHALLENGES HAS SIERRA WINDS FACED BEING A MINORITY-OWNED BUSINESS?

SECTION I. CHALLENGES/STRATEGIES/SUCCESSES

Cash flow – Project delays slowed down Sierra Winds cash flow. Dick still had to meet payroll and purchase equipment/products, but now had to wait longer to get paid for his completed projects. These delays have caused a cash crunch for the company.

WHAT HAVE BEEN SOME OF SIERRA WINDS BIGGEST SUCCESSES?

Supply delays – Another issue has been supply chain issues during the pandemic. Normally, the manufacturer can provide products to Sierra Winds within 4 to 6 weeks, but now has been taking 12 to 20 weeks.

HOW HAS SIERRA WINDS ADDRESSED THE CHALLENGES?

NEVADA MINORITY BUSINESS ENTERPRISE REPORT 25 STUDY FINDINGS SECTION I. CHALLENGES/STRATEGIES/SUCCESSES – COVID PANDEMIC

26 ARIZONA MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS Most Significant Challenges or Barriers Faced as a Minority Owned Business 1% 2% 3% 5% 6% 6% 7% 7% 9% 19% 24% 0% 10% 20% 30% CULTURAL BARRIERS/LANGUAGE NOT MAKING ENOUGH MONEY FINDINGDISCRIMINATIONEMPLOYEES SECURING LOANS/FUNDING COMPETITION WITH LARGER COMPANIES ISSUES WITH CONTRACTS/UNABLE TO GET CONTRACTS FINDING CLIENTS/GETTING WORK NOT BEING TAKEN SERIOUSLY DON'T KNOW/NO ANSWER NO UNIQUE CHALLENGES/SAME AS OTHER BUSINESSES MOST SIGNIFICANT CHALLENGES OR BARRIERS FACED AS A MINORITY-OWNED BUSINESS SECTION II. CHALLENGES/STRATEGIES – MINORITY BUSINESS ENTERPRISES

Almost half (43%) 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. A. Top-of-Mind Recall of Minority-Related Challenges

Finding customers

finding contracts, clients)

to get contracts

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

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.”

NEVADA MINORITY BUSINESS ENTERPRISE REPORT 27 STUDY FINDINGS SECTION II. CHALLENGES/STRATEGIES – MINORITY BUSINESS ENTERPRISES B. Aided Recall of Minority Business Challenges

One-third (34%) felt that cultural differences have had an impact on their business practices (12% significant challenge, 22% somewhat of a challenge).

OVERCOMING NEGATIVE PERCEPTIONS OF BEING A MINORITY-OWNED BUSINESS Chart 7 Overcoming Negative Perceptions of Being a Minority Owned Business Significant Challenge 18% ofSomewhata Challenge 26% Not a Real Challenge 57%

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

One third (33%) agreed they have been treated differently because they are a minority-owned business.

Almost half (44%) of MBEs felt overcoming negative perceptions of their business being minority-owned was at least somewhat of a challenge (18% significantly challenge, 26% somewhat of a challenge). These responses have held relatively even over the past 15 years.

28 NEVADA MINORITY BUSINESS ENTERPRISE REPORT 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 22% Not a real Challenge 67% Chart 9 Perception of Being Treated Differently by Suppliers or Customers Strongly Agree 12% Agree 21% Disagree 35% Strongly Disagree 27% Don't Know 5%

NEVADA MINORITY BUSINESS ENTERPRISE REPORT 29 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) 21%. Changing their marketing strategies was next (15%), followed by increased networking. HOW BUSINESSES OVERCAME BARRIERS AS A MINORITY OWNED BUSINESS TOP UNAIDED RESPONSES

SECTION II. CHALLENGES/STRATEGIES – MINORITY BUSINESS ENTERPRISES Increasing marketing/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 and promoting the MBE visibility/brand were the top responses.

30 NEVADA MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS

AGREEMENT WITH STATEMENTS UNIQUE TO MINORITY BUSINESSES ENTERPRISES

Third-quarters (72%) networked with other MBEs. More than half (59%) promoted the fact that they were an MBE. Half (51%) used their minority status to pursue business opportunities.

Availability of government funds or contracts

Strategy: Owner took over dealing with clients; he is a people person.

Being a minority owned business owner is a barrier and the prejudice we experience.

RETAILER Challenge: Pretty much in your face discrimination, especially when they did not know the owner was Hispanic. Crazy people are so prejudice.

SUPPLY CHAINChallenge:MANAGEMENT

Strategy: Tried bidding on everything, tried to bid on government bid sites

FINANCIALChallenge:INVESTOR

NEVADA MINORITY BUSINESS ENTERPRISE REPORT 31 STUDY FINDINGS SECTION II. CHALLENGES/STRATEGIES – MINORITY BUSINESS ENTERPRISES CHALLENGES FACING MBEs AND STRATEGIES COMMENTS

HEALTHCAREChallenge:

Strategy: 1. Developing legitimate businesses or companies in my community. 2. Doing my research and development.

Strategy: Filed with the feds to help get government contracts.

SMALL BUSINESSChallenge: Denied credit; hard to get financing Strategy: Picked up outside work and used personal finances.

Being a minority and also probably just lack of knowledge about the workforce. The biggest challenge has been me not knowing things I could do and resources that were actually available to me. Based on my demographic and background, I had not done my own research and I definitely was not going to be given the knowledge freely.

HEALTH ANDChallenges:WELLNESS

32 NEVADA MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS SECTION II. CHALLENGES/STRATEGIES – MINORITY BUSINESS ENTERPRISES CARPET CLEANINGChallenge:

Being recognized as an expert in the field.

Strategy: Marketing my expertise and certifications.

Strategy: When I have issues here at the lake, some people will not answer their phones because of the Hispanic Caller ID There are two solutions for that… Either I call the customer with my Caucasian last name or we have a brand new phone that says “Carpet Cleaner” because I worked the 2nd part of the day at home.

Working in the Carson City area, people don’t like it if you send a Hispanic to their home. The owner does not like working down there. He has a white person go down there.

ARIZONA MINORITY BUSINESS ENTERPRISE REPORT 33 STUDY FINDINGS SECTION III. ACCESS TO CAPITAL One theme that surfaced throughout the interviews was the challenge associated with needing 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 (35%). Self-funding – Significantly more MBEs self-fund their business than non-MBEs (e.g., personal loans to the business.) CURRENT FUNDING TOP SOURCES MINORITY VS. NON-MINORITY Current Funding Top Sources Minority vs. Non Minority *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 5% 2% 2% 7% 6% 15% 46% 1% 4% 5% 7% 9% 35% 41% 0% 10% 20% 30% 40% 50% DONATIONS/CONTRIBUTIONS/NON PROFIT CREDIT BANKSCITY/STATE/FEDERALINVESTORS/PARTNERS/FAMILYCARDSLOANS/GRANTS-OTHERLENDINGINSTITUTIONSSELFFUNDINGFUNDINGFROMBUSINESSOPERATIONS M B 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

34 NEVADA MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS SECTION III. ACCESS TO CAPITAL Chart 13 Gaining Access to Capital Not a Real Challenge 40% ofSomewhata Challenge 17% Significant Challenge 40% Don't Know 4% MBEs N=288 Not a Real Challenge 70% Somewhat of a Challenge 18% Significant Challenge 11% Don’t Know 5% Non-MBEs N=347 GAINING ACCESS TO CAPITAL Significant Challenge – More than half (57%) of MBEs said gaining access to capital was at least somewhat of a challenge (compared to 29% of non-MBEs). Of those 57% 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., Decided if we really need the loan) o Found other financing o Increased their marketing efforts o Applied for government loans – e.g., PPP A total of 23% disagreed with the statement that they were “treated with respect when applying for a business loan.”

NEVADA MINORITY BUSINESS ENTERPRISE REPORT 35 STUDY FINDINGS SECTION III. ACCESS TO CAPITAL Chart 14 Overcoming Challenges of Gaining Access to Capital 4% 5% 7% 7% 7% 8% 9% 10% 13% 14% 17% 17% 0% 10% 20% WORKED HARDER DID NOT GIVE UP SOUGHT FROMEDUCATION/LEARNEDHELP/ADVICEMOREOTHERSABOUTFINANCINGDIDNOTHINGSELFFINANCEDBUILTUPCREDITCUTBACKEXPENSESAPPLIEDFORGOVERNMENTLOANS/GRANTS(E.G.,PPP)INCREASEDMARKETINGFOUNDOTHERFINANCINGCHANGEDATTITUDE 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: AMONGN-235 THOSE WHO FELT ACCESS TO CAPITAL WAS AT LEAST SOMEWHAT OF A CHALLENGE

36 STEPS TAKEN TO GAIN ACCESS TO CAPITAL COMMENTS SOFTWARE CONSULTANT Tried to depend less on needing capital. PERSONAL CARE SERVICES We just have to use our own savings to make up the need. BUSINESS CONSULTING Continue to apply for business funding. SERVICES We did apply for a loan and were turned down. We did not get involved in the PPP loans. We tried to do it the old-fashioned way. Don’t know why we were turned down, we could have used the loan. I work 7 days a week to make up for it. PRINTING I’m applying for a grant for minority-based startups. Taking advantage of some programs for minorities and retired military. CIVIL ENGINEERING CONSULTING Had to use retirement money. Agree 32% Strongly Agree 19% Disagree 15% Strongly Disagree 8% 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 26% Don't Know TREATED WITH RESPECT WHEN APPLYING FOR LOANS I was treated with respect when applying for a business loan at a bank or financial institution NEVADA 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: Donald Trump (5%) President Biden (4%) Elon Musk (3%) Oprah Winfrey (3%) Among “categories” of potential advisors, business experts were mentioned most often: Business experts/advisors (22%) Politicians (10%) Celebrities (4%) Responses of non-MBEs were comparable to MBEs’ role models/advisors. ARIZONA MINORITY BUSINESS ENTERPRISE REPORT 37 STUDY FINDINGS SECTION IV. ROLE MODELS/RESOURCES PEOPLE TO ADVISE BUSINESS TOP MENTIONS *ALL INDIVIDUAL MENTIONS WERE LESS THAN 1% N=288 Chart 16 People to Advise Business Top Mentions 25% 1% 1% 1% 2% 4% 10% 19% 22% 0% 10% 20% 30% DON'T KNOW/NO BUSINESSSPECIFICFAMILYRELIGIOUSSPORTSMUSICIANSONEFIGURESLEADERSMEMBER/FRIENDCELEBRITIESPOLITICIANSBUSINESSLEADERSEXPERTS/ADVISORSCPA,IT,M&A,HR.SUCCESSFUL *All individual mentions were less than 1% n=288

38 NEVADA 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% 2% 3% 3% 4% 5% 0% 2% 4% 6% GOVERNORPRESIDENTOPRAHWARRENJEFFSISOLAKBEZOSBUFFETWINFREYELONMUSKBIDENDONALDTRUMP comments made by 1% or less not listed PEOPLE TO ADVISE BUSINESS TOP NAMES MENTIONED

“IF

VISIT

SECTION IV. ROLE MODELS/RESOURCES YOU COULD HAVE ANYONE IN THE WORLD YOUR BUSINESS” COMMENTS… AUTO CARE

BROKER Lady who created Spanx, Sara Blakely. She started as a female owned business with zero capital and was able to overcome all her challenges. I would like to gain insight on how she got through some of those challenges.

PROFESSIONAL COUNSELING

Ray Crock. The McDonald man who made them what they are today, CONSULTING George Lopez. His business savvy and is successful in his career

NEVADA MINORITY BUSINESS ENTERPRISE REPORT 39 STUDY FINDINGS

Warren Buffet. The fact that even though he is wealthy, he seems to be down to earth and I think he is out there supporting other businesses and teaching others how to make themselves profitable.

FINE ART AND GRAPHICS

WHOLESALER Jeff Bezos, I am an Amazon wholesale seller through his warehouses and on his platform on Amazon.com

TAX, ACCOUNTING AND SMALL BUSINESS CONSULTING FIRM. Michelle Obama because of her class, her status and her understanding what it means to be a black woman in the United States.

Oprah Winfrey. She is smart with an extremely large audience or Ellen DeGeneres, These people tend to do well.

Among those who work outside of Arizona in the U.S. (besides online business):

Almost half (49%) seek after government or private contracts as a source of revenue.

WHAT ARE THE CHARACTERISTICS s?

More than half do work for other businesses (business to business – 56%).

Median staff size is 3 employees. (5 for non-MBEs)

40 NEVADA MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS SECTION V. BUSINESS CHARACTERISTICS

Two out of four of the top industries MBEs work in involve parts of the services industry –“Other services” and Professional services

Median age of the business is 6 years old.

WHO ARE THE CUSTOMERS?

A PROFILE OF NEVADA MINORITY BUSINESS ENTERPRISE INCLUDES:

Half are family-owned (49%). Almost half (41%) are home-based businesses

Half (53%) were women-owned businesses (28% for non-MBE)

Median revenue was $156,000 in 2021.

One-third (37%) do work with the government.

o Construction is ranked second and retail trade ranked fourth.

Half of the businesses (50%) conduct business with retail customers

OF MBE

More than one-third work throughout the U.S. – i.e., multiple states in the U.S. (39%). One-quarter (24%) serve specifically in the Southwest. The rest service in the Midwest, Northwest, Southeast and Northeast.

key screening criterion for survey participants was that the businesses had to have at least one full-time employee.

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). Less than half (41%) of these firms conduct business outside of Nevada and within the U.S. and 20% conduct business international ly.

WHERE ARE THEIR CUSTOMERS/EMPLOYEES?

A

MBE companies had significantly lower annual revenues, were younger in age, and more likely to be home-based than non-MBEs. MBEs are more likely to do business with other businesses and government compared to 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. (7)

NEVADA MINORITY BUSINESS ENTERPRISE REPORT 41 STUDY FINDINGS

Among those who work internationally (besides online business): One-quarter service Europe (24%) 18% serve Canada 20% serve in multiple countries worldwide. The rest work in specific regions of the world (e.g., Mexico, Asia, Australia, South America, and Central America).

SECTION V. BUSINESS CHARACTERISTICS

Some key demographic differences identified that MBEs were significantly smaller than non-MBEs in general.

42 NEVADA MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS SECTION V. BUSINESS CHARACTERISTICS MBE 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 288 $156,000 3 6 years 49% 41% 50% 56%37% 20%41% Non-MBE 347 $375,000 5 18 years 43% 25% 57% 42%25% 38%16%

NEVADA MINORITY BUSINESS ENTERPRISE REPORT 43 STUDY FINDINGS SECTION V. BUSINESS CHARACTERISTICS Chart 19 Type of Business 5% 1% 1% 1% 1% 4% 4% 4% 4% 5% 6% 6% 8% 9% 9% 16% 24% 0% 5% 10% 15% 20% 25% 30% UNABLE TOEDUCATIONALCATEGORIZE/REFUSEDINFORMATIONSERVICESAGRICULTURE ARTS, ENTERTAINMENT, RECREATION ACCOMODATION AND FOOD SERVICES ADMIN. SUPPORT, WASTE MGMT & REMEDIATION FINANCE AND INSURANCE REAL ESTATE, RENTAL & WHOLESALEMANUFACTURINGLEASINGTRADE TRANSPORTATION AND WAREHOUSING HEALTH CARE AND SOCIAL PROFESSIONALRETAILASSISTANCETRADESERVICESCONSTRUCTION OTHER SERVICES (EXCEPT PUBLIC ADMIN.) n=288 TYPE OF BUSINESS Chart 18 Customer Segments Served 37% 50% 56% 0% 20% 40% 60% GOVE RNMENT (CIT Y, STATE, FEDER RETAILMUNICIPALITIES)AL,CONSUMERSBUSINESSES n=288 CUSTOMER SEGMENTS SERVED N=605 N=288

44 NEVADA MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS SECTION V. BUSINESS CHARACTERISTICS Chart 21 Length of Time in Business Age of 11+MedianBusiness6Yearsyears 33% 3 years or less 29% 4 to 5 years 17% 6 to 10 years 21% N=276 (7% did not report business age) ANNUAL REVENUE MINORITY-OWNED BUSINESSES Chart 20 Annual Revenue Minority Owned Businesses Revenue in 2021 Median $156,000 Less $100,000than 42% $100,000$499,999to 28% $500,000$999,999to 11% $1M to $4.9M 15% $5M+ 4% N=257 (29% did not report revenue) Revenue in 2021 Median $156,000 N=257 (29% did not report revenue) N=276 (7% did not report business age) Age of Business Median 6 Years LENGTH OF TIME IN BUSINESS

NEVADA MINORITY BUSINESS ENTERPRISE REPORT 45 STUDY FINDINGS SECTION V. BUSINESS CHARACTERISTICSMBE Service Area (Besides Internet based business) 20% 41% 43% 40% 43% 33% 0% 10% 20% 30% 40% 50% WITHINTHROUGHOUTINTERNATIONALLYTHEU.S.WITHINSTATEWITHINCOUNTYWITHINCITY/TOWNNEIGHBORHOOD n=288 MBE SERVICE AREA (BESIDES INTERNET-BASED BUSINESS) NORTHWEST 14% SSOUTHWEST 24% MMIDWEST 14% SSOUTHEAST 12% NNORTHEAST 8% AALL STATES 39% 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=104 Those who work outside of Nevada 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=104 THOSE WHO WORK OUTSIDE OF NEVADA IN THE U.S.

46 NEVADA 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 18% MEXICO 8% EUROPE 24% AUSTRALIA 10% AFRICA 12% SOUTH AMERICA 6% AMERICACENTRAL 7% WORLD WIDE 20% ASIA 14% Chart 24 Span of International Business World map with percentage of those who do business in each continent. Sample size: n=51 Those who work internationally SAMPLE SIZE: N=51 THOSE WHO WORK INTERNATIONALLY

NEVADA MINORITY BUSINESS ENTERPRISE REPORT 47 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, middleaged, and have a wide spread of political affiliations. Characteristics of the owners of MBEs included: Most started the company (89%) Were born in the U.S. (77%) Half speak another language besides English (48%) o 67% speak Spanish (of those who speak a second (or more) language Average age of the owner is 48 years old. Political affiliation: o Independent – 30% o Democrat – 20% o Republican – 18% o No preference – 6% o Refused – 25% oEducation:College graduate – 62% Owner’s median annual income in 2021: o $90,476 Compared to the general population – MBE owners were more than twice as likely to have a college degree and had 50% higher annual income compared to the state’s median household income *. 2020 Nevada education attained – 26% college degree compared to 62% among MBEs owners in 2021. (8) 2020 Nevada median household income – $62,043 (8) compared to the $90,476 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 Nevada 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.

48 NEVADA MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS SECTION VI. OWNER CHARACTERISTICS BOLDED FIGURES ARE STATISTICALLY DIFFERENT. SAMPLE DEMOGRAPHICSSIZE Average PercentageAgewith college degree or more education Median Household Income CULTURE/LANGUAGE Born in U.S. Speak another language besides English POLITICAL AFFILIATION RefusedNoRepublicanDemocratIndependentpreference/Other OWNER PROFILE MBE 288 48 years $90,47662% 30%48%77%20%18% 25%7% Non-MBE 347 56 years $113,15763% 23%92%21%11%29% 32%7%

NEVADA MINORITY BUSINESS ENTERPRISE REPORT 49 STUDY FINDINGS

The top three challenges, loss of sales, keeping employees and supply chain issues, were the same for HUBZone, MBE HUBZone and non-HUBZone businesses.

DURING THE PANDEMIC HUBZone businesses generally faced the same challenges and used similar strategies during the pandemic as those not operating in a HUBZone. In addition, there were few differences between HUBZone business overall and HUBZone minority-owned businesses. Even when differences were considered “significantly different” between the groups, the percentage differences were relatively small.

CHALLENGES/STRATEGIES

CHALLENGES

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.

SECTION VII. RURAL AND ECONOMICALLY DISTRESSED AREAS

The main significant difference between these groups was that HUBZone businesses were more likely to be challenged with keeping employees and customers safe from the virus.

50 NEVADA MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS SECTION VII. RURAL AND ECONOMICALLY DISTRESSED AREAS CIRCLED IN BLACK - SIGNIFICANTLY DIFFERENT AT 95% CONFIDENCE LEVEL BETWEEN HUBZONE AND NON-HUBZONE NOTE: ONLY MOST OFTEN MENTIONED TOP-OF-MIND CHALLENGES WERE LISTED TOP CHALLENGES DURING PANDEMIC HUBZONE VS. NON-HUBZONETop Challenges During Pandemic HUBZone vs. Non HUBZone 5% 12% 23% 24% 11% 14% 19% 20% 16% 14% 17% 22% 0% 10% 20% 30% K E E PING EMPLOYEES/ CUSTOMERS SAFE FROM V I RUS SUPPLY SHORTAGES/DECREASED INVENTORY KEEPING EMPLOYEES DECREASE IN SALES/LOSS OF BUSINESS M B E H U B Z o n e H U B Z o n e N o n - H U B Z o n e Circled in black Significantly different at 95% confidence level between HUBZone and non HUBZone Note: Only most often mentioned top of mind challenges were listed STRATEGIES More likely to do something – Strategies by HUBZone businesses to address the pandemic were comparable with non-HUBZone businesses and HUBZone MBEs. For each of these groups, the top strategies they used were: o Changing marketing/communication strategies o Changing operations o Choosing not to make any changes o Making staff changes

NEVADA MINORITY BUSINESS ENTERPRISE REPORT 51 STUDY FINDINGS SECTION VII. RURAL AND ECONOMICALLY DISTRESSED AREAS

BUSINESS CHARACTERISTICS

ACCESS TO CAPITAL

One of the larger differences between HUBZone and non-HUBZone businesses was having access to capital. More of a challenge – HUBZone MBEs were more likely to feel that gaining access to capital was a significant challenge (44%) than the other groups (24% HUBZone overall to 24% oNon-HUBZone).Duringthe loan application process, non-HUBZone businesses were almost twice as likely to strongly agree that they were treated with respect (22%) than those in HUBZones (13%).

A comparison of the business characteristics of HUBZone MBE highlight that they tend to be slightly smaller and newer than non-HUBZone businesses. HUBZone MBEs are more likely to seek government or private contracts (52%) than HUBZone (40%) and nonHUBZone businesses overall (37%).

52 NEVADA MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS SECTION VII. RURAL AND ECONOMICALLY DISTRESSED AREAS BUSINESS CHARACTERISTICS HUBZ one /N on -HUBZ one /HUBZ one MBE s BOLDED FIGURES ARE STATISTICALLY DIFFERENT. $182,429187 4 1540%48%years31%36%42% 23% HUBZoneNon$248,000470 4 1040%32%44%years37%38% 16% HUBZoneMBE $136,3638737years55%41%47%52%41%24% 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

The pandemic and being a minority-owned business generally affected HUBZones MBEs similarly than in nonHUBZone areas. The main differences were mainly financially-driven. HUBZone MBEs were smaller in size (half the revenue size) and were significantly more challenged trying to gain access to capital.

IMPLICATIONS

Helping these HUBZone MBEs requires focusing on building a larger financial foundation to weather the challenges they faced during the pandemic.

NEVADA MINORITY BUSINESS ENTERPRISE REPORT 53 STUDY FINDINGS SECTION VII. RURAL AND ECONOMICALLY DISTRESSED AREAS BOLDED FIGURES ARE STATISTICALLYOWNERDIFFERENT. CHARACTERISTICS 73%187 33% 5255%years$88,125 HUBZoneNon$100,3455266%36%76%470years HUBZoneMBE 86%87 49% $75,0004857%years 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.

In addition, HUBZone MBEs had a greater urgency to try different strategies to get through the pandemic than non-HUBZone businesses.

SPECIALTY

Strategies: Constant communication reaching out to get advocate for IRS. INDIGENOUS COMMUNITY/REMOTE TRIBAL COMMUNITIES

NEVADA MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS SECTION VIII.

DURING THE PANDEMIC MBEs in Tribal Communities experienced similar issues as MBEs overall during the pandemic. These surviving businesses felt the biggest challenges were: Supply chain shortages (5 of 23) Decreasing sales/loss of business (4 of 23) Staying in touch with employees/customers (3 of 23) Being forced to shut down due to the pandemic (3 of 23) Their top strategies to survive/get through the pandemic were: Changed their marketing efforts (5 of 23) Changed their operations (4 of 23) Followed CDC guidelines (4 of 23) In addition, almost one-third received a PPP loan (30%)

Ensuring that everyone is safe including staff and customers and CDC guidelines. Strategies Enforced masks, hand sanitizing stations, six feet apart distance wise.

RETAILERChallenges:

Challenges:COFFEE Inconsistency of government information for relief programs. Dropping the ball and alienated from other grants.

CHALLENGES/STRATEGIES

54 WestGroup was able to conduct 23 interviews with businesses in Indigenous Communities/Remote Tribal Communities in Nevada 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.

CHALLENGES

DURING THE PANDEMIC WITH BUSINESSES IN INDIGENOUS COMMUNITIES COMMENTS

Gaining access to capital among Tribal Community MBEs is clearly a significant challenge (48%). One-third (7 of 23) currently finance their business from within the business or personal loans.

ACCESS TO CAPITAL

OF BEING AN MBE

ACCESSING

VIII.

NEVADA MINORITY BUSINESS ENTERPRISE REPORT 55 STUDY FINDINGS

Increase volume, visiting doctors and advertising more.

CHALLENGES/STRATEGIES

CHALLENGES CAPITAL SOURCES COMMENTS

LIVE ENTERTAINMENT

CONSTRUCTION MANAGEMENT

SECTION INDIGENOUS COMMUNITY/REMOTE TRIBAL COMMUNITIES

Strategies: Reaching out to different contractors; soliciting my services and doing different marketing and advertising

Applied for loans, but have not receive any capital loans. The loans I have received I had to put my car up for collateral; a small amounts like $5000, but nothing significant.

CONSTRUCTION MANAGEMENT

REHABILITATION SERVICES

Maintain good credit program. Let go a majority of staff to maintain stay above water.

Challenges: Lack of business; Can’t get contracts; Loss of revenue

Almost half (10 of 23) mentioned that overcoming the negative perceptions of being a minority-owned business was at least somewhat of a challenge. One-third (7 of 23) felt their cultural differences had a significant impact on their business practices. Marketing focus – MBEs in Tribal Communities appear to be more likely to promote that they are MBE (73% compared to 59% for MBEs overall).

56 NEVADA MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS SECTION VIII. INDIGENOUS COMMUNITY/REMOTE TRIBAL COMMUNITIES BUSINESS CHARACTERISTICS 12$150,000233yearsold70%57%29% MBEs 6$156,0002883yearsold49%41%20% INDIGENOUSAMERICANINDIAN,COMMUNITY SAMPLE SIZE MEDIAN REVENUE MEDIAN NUMBER OF EMPLOYEES MEDIAN AGE OF COMPANY CUSTOMERS Seeks government/ Private contracts GEOGRAPHIC SCOPE Conducts business throughout U.S. Conducts business internationally 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.

NEVADA MINORITY BUSINESS ENTERPRISE REPORT 57 STUDY FINDINGS SECTION VIII. INDIGENOUS COMMUNITY/REMOTE TRIBAL COMMUNITIES OWNER CHARACTERISTICS

SAMPLE

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

IMPLICATIONS

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

2. The need for capital was a continuing theme that was mentioned by these businesses and needed help applying for loans.

1. 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. They financially were hit hard by the pandemic, especially when they had to shut down their businesses. They were also concerned about keeping employees and customers safe from the COVID virus.

$75,0005422%87%23years71% MBEs 4889%28848%years62%$90,476 INDIGENOUSAMERICANINDIAN,COMMUNITY

MEDIANEDUCATIONAVERAGESPEAKSSTARTEDSIZECOMPANYANOTHERLANGUAGEAGEOFOWNER–COLLEGEDEGREEINCOME

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.

METHODOLOGY 58 NEVADA MINORITY BUSINESS ENTERPRISE REPORT WHAT

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

BACKGROUND

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.” (9)

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.

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.

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.

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.

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.

STUDY AND IS THE HISTORY BEHIND THE STUDY?

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

WHAT BUSINESSES PARTICIPATED IN THE SURVEY?

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

NEVADA MINORITY BUSINESS ENTERPRISE REPORT 59 The following is a breakdown of various groups that participated in the research. STUDY BACKGROUND AND METHODOLOGY MINORITY GROUP REPRESENTATION 35%42%11%8%4%6% MINORITY GROUPS PERCENTUNWEIGHTEDRESPONSE NATIVE/HAWAIIANAMERICANASIANAFRICANHISPANICAMERICANINDIANOR OTHER PACIFIC ISLANDER OTHER C. Rural and economically distressed areas – One of the focuses of the research will be 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) 60%22%8%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

The following sample sizes were targeted within each state

Completed 347 non-minority businesses interviews (margin of error of +/- 5.3% at the 95% confidence level).

Telephone interviewers screened respondents in order to reach the “highest level” person in the organization. most cases, interviews were conducted with the owner/Chief Executive Officer or President.

This year’s study expanded to include Arizona, Nevada and Utah. The overall survey results from 1,983 interviews of the three states have a margin of error of +/-2.2% at the 95% confidence level. The 657 interviews in Nevada has a margin of error of +/- 3.8 % at the 95% confidence level. Subgroups with smaller sample sizes have a larger margin of error.

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

Completed 288 MBE interviews (margin of error of +/- 5.8% at the 95% confidence level).

Completed 187 businesses within HUBZones (margin of error of +/- 7.2% at the 95% confidence level).

60 WHO WAS INTERVIEWED FOR THE NEVADA SURVEY?

In

NEVADA MINORITY BUSINESS ENTERPRISE REPORT MINORITY GROUPS STUDY BACKGROUND AND METHODOLOGY 53% RESPONSEPERCENT WOMEN-OWNED 20%68%8%5% POSITION RESPONSE*PERCENT ADMINISTRATOR/MANAGEROWNER/CEO/PRESIDENT BOARD MEMBER/EXECUTIVE MANAGEMENT OTHER E. Woman-owned MBEs

throughout

Completed 470 interviews with business outside of the HUBZones (margin of error of +/- 4.5% at the 95% confidence level).

Arizona Hispanic Chamber

WAS AN INCENTIVE USED TO ENCOURAGE PARTICIPATION?

Minority Business Development Agency Business Center Small Business Administration Chambers

The Nevada surveying began on February 15, 2022, and was completed on March 30, 2022.

NEVADA MINORITY BUSINESS ENTERPRISE REPORT 61

Targeted 50 businesses with Indigenous Native American ownership, resulting 23 completed interviews.

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.

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

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: of Commerce of Commerce the

WHEN WAS THE SURVEY CONDUCTED?

WHAT METHOD WAS USED TO CONDUCT THE RESEARCH?

Nevada

STUDY BACKGROUND AND METHODOLOGY

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

62 NEVADA 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

NEVADA MINORITY BUSINESS ENTERPRISE REPORT 63 1. U.S. Small Business Administration, 409 3rd St, SW. Washington DC 20416, https://www.sba.gov/federalcontracting/contracting-assistance-programs/hubzone-program 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-covid3. 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 4. U.S. Census https://data.census.gov/cedsci/table?q=ABSCB2017.AB1700CSCB02%26nkd%3DQDESC~B01 5. 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 6. U.S. Census, 2021 Annual Business Study, ABS Financing Module, https://www.census.gov/data/tables/2021/ econ/abs/2021-abs-financing-module.html 7. 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 8. U.S. Census, https://www.census.gov/quickfacts/fact/table/AZ/HCN010212? 9. Premier Quantitative Consulting Inc., “Contracting Barriers and Factors Affecting Minority Business Enterprises A REVIEW OF EXISTING DISPARITY STUDIES” PREPARED FOR Minority Business Development Agency Under Contract SB1352-15-SE-0425. END NOTES

64 NEVADA MINORITY BUSINESS ENTERPRISE REPORT STUDY FINDINGS NOTES

NEVADA MINORITY BUSINESS ENTERPRISE REPORT 65 STUDY FINDINGS NOTES