• EMPOWER project was led by the Centre for Personal Financial Wellbeing at Aston University
• Ethnic minority entrepreneurs often face ongoing barriers to external finance and suitable business support
• A new Empower Hub website has been launched to offer tailored advice for ethnic minority-led businesses.

New research from Aston University reveals that ethnic minority-led businesses are continuing to struggle with financial planning amid ongoing economic uncertainty.

However, such businesses can be effective supporters of each other, if well connected, as they try to find the right ways to finance their business ideas and dreams.

The findings are from the recently completed EMPOWER project which was led by the Centre for Personal Financial Wellbeing (CPFW) at Aston University, in collaboration with Centre for Research in Ethnic Minority Entrepreneurship (CREME), Coventry University, Citizens UK and Manchester Metropolitan University. It investigated how ethnic minority-led businesses make decisions about their finances that enable them to launch their business and become established.

Key findings from the research show that, although driven by both necessity and aspiration, ethnic minority entrepreneurs often face ongoing barriers to external finance and suitable business support. Some of these barriers are common to all businesses, but ethnic minority led-businesses also face other challenges and overcome these in imaginative ways. They rely on personal, wider family and community resources and demonstrate remarkable resilience in adapting to changing circumstances. In one example revealed by the research, a takeaway business run by four brothers trained one another in plumbing and electrical work to reduce maintenance costs across four branches.

The research also found that cultural and religious values frequently shape business decisions for these businesses. An Islamic bookstore owner participant deliberately avoided loans and mortgages, instead relying on personal investment and reinvesting profits to grow the business in line with its religious beliefs.
At the same time, systemic barriers and perceived discrimination continue to limit access to finance, networks and opportunities. An education and IT support business owner participant described how procurement processes often favoured larger companies, making it difficult for small ethnic minority-led businesses to compete for local authority contracts. These challenges were further intensified by the COVID-19 pandemic and now by the ongoing cost-of-living crisis.

The initiative was funded by the Aviva Foundation. More than 30 businesses took part in the two-year project, which produced support across a range of interventions build as part of the project specifically for future ethnic minority-led businesses to strengthen their financial resilience as well as drive related policy change.

While the initial research found that ethnic minority entrepreneurs often relied on personal and community resources while facing barriers to finance, support and networks, after two years of working with the team, many participants reported increased financial confidence, more strategic business practices and stronger peer networks.

Although significant barriers around funding and institutional support remain, the findings suggest that community-based interventions, practical business support and accessible information can strengthen financial resilience and help entrepreneurs move from reactive survival towards more sustainable growth.

As part of the project, a new freely accessible website, Empower Hub, has been launched which provides tailored guidance for ethnic minority led-businesses ranging from funding and financial advice through to tips on business planning and legal issues. Co-designed and created with the participants of the research (supported by a panel of experts) to help to address key gaps in general business support provision they felt was available to them, the online Hub also features video stories of 10 of the 30 participants. This Hub will continue to be further developed into the future as ongoing financial support has been provided.

Professor Andy Lymer, director of CPFW at Aston University, said:

“The EMPOWER project is incredibly important research because it strengthened participants’ confidence in ways that often surfaced as improved judgement and strategic thinking, while also expanded networks and access to unfamiliar spaces, reduced isolation and created opportunities through peer connection and recognition. This was achieved in large part by the many events we organised over the past two years to bring participants together and share experiences and ideas. These not only provided platforms for ethnic minority businesses to tap into support they didn’t think they could access, but also informed business support stakeholders and policy makers of what ethnic minority businesses actually need to thrive.

“We are hopeful that the project will bring about long-term impact on the business landscape within and beyond Birmingham.”