Richmond’s Entrepreneurial Ecosystem

Richmond’s equitable growth does not appear to have occurred by chance. Rather, it appears to be correlated with Richmond local government’s plan paired with a broadly coordinated direct services ecosystem. 

One example of local government direct service is the city’s Office of Minority Business Development, which provides one-on-one technical assistance and funding to small minority-owned businesses. Director Pat Foster said they partner with sister organizations in the community to ensure they aren’t duplicating efforts. Recognizing that Richmond has many technical assistance programs, Foster said that the office would be concentrating on financing.

“If you look at minority businesses, a lot of them don’t have the generational wealth or collateral they need,” Foster said. They start out on a shoestring…and they find a way to make it happen.”

In addition to its programming, the city supports entrepreneurship through federally funded loans and incentive programs such as Enterprise Zone rebates and grants, as well as a revolving loan program and commercial real estate tax abatement for property preservation and reuse. Furthermore, the city makes use of tax policies and exemptions. In 2022, the city increased the number of businesses eligible to pay a reduced licensing tax of only $30 for the first two years by increasing the tax threshold from $100,000 to $250,000. The city estimates that more than 60 percent of businesses will pay the flat fee rather than the variable higher rate. 

For traditionally underserved populations, there are a number of programs and supports to meet specific business needs and advance growth. Organizations like Metropolitan Business League, SBDC Virginia, the JWC Foundation, and others have been making an intentional effort to improve coordination amongst themselves. 

“Something about the pandemic ripped apart a lot of the silos in the city that were keeping organizations from working with each other,” said Tatiane Pena of SBDC Virginia. “The scarcity mindset is not serving anybody. Seeing the amount of true collaborations and referrals that come from outside orgs has been a game changer in the past four or five years.”

SBDC Virginia offers free technical support to roughly 600 clients a year in the Richmond metro area and six other counties. Pena said that their staff are current and former entrepreneurs, mental health experts, and people with a background in consulting and change management. Importantly, “our staff members come from the communities we work in,” Pena said. “With that comes deep community relationships and partnerships.” These partnerships include what she describes as a loose collaboration of stakeholders working together to create a cohesive network of services and supports.

A prime example of this work is The JWC Foundation’s recent pivot when they saw a gap in small business support and repositioned their work to fill it. 

“Our focus is still Black-owned businesses, but what we focus on is helping ensure that they have back-office support….Most people don’t know how to operate a business. That’s where we go deep,” said Rasheeda Creighton, Executive Director of The JWC Foundation. “We provide tools, access to information, and connections to resources. We don’t need to be another organization that tells you how to build a business plan or how to do procurement. We prefer to connect you to the organizations that can assist you with that, rather than duplicate their work.” 

If a business needs advice on start-up or procurement, JWC staff will refer them to another organization, adopting a spirit of collaboration rather than competition. 

LISC Virginia, for example, is a community development financial institution (CDFI) that lends to communities that might not have access to traditional financing. During the pandemic, they began offering 0 percent interest and no-fee small business loans across the Richmond and Petersburg region, among other economic development programs.

Piazza of LISC Virginia echoed the importance of the trust that grassroots organizations build in the community. 

“We could have a million dollars, but if we don’t get connected with the right businesses, that money can sit there. We had those on-the-ground organizations really take off and develop over the past three years that, I think, catalyzed a lot of this (change),” Piazza said. “It’s easy to sit back and get minority business owners to come to you with loan needs when they’re ready. But it’s another thing to go into these communities where you have to really put in the groundwork to build them up.”

In 2022, they partnered with the Women’s Business Center of Richmond to create the BIPOC Small Business Capital Access Program, funded in part by Capital One, to provide capital and coaching to entrepreneurs who are Black, indigenous, or people of color. 

The support of the organizations, programs, and policies highlighted above, alongside those not mentioned, and the strength of the Richmond community, are all contributing factors to Richmond’s small business growth and healthy ecosystem.