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AAPI Small Business Owners Meet the Challenges of the Pandemic

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Asian Americans and Pacific Islanders (AAPI) are the fastest-growing ethnic group in the United States, according to the U.S. Census. And they’re quickly embracing entrepreneurship. The Small Business Administration (SBA) estimates there are 2.5 million AAPI-owned small businesses in the U.S.

That’s the good news. The not-so-great news is that most AAPI business owners (92%) faced difficulties keeping their businesses open and operating amid the pandemic, according to the 2021 Asian American and Pacific Islander Business Owner Spotlight, a new study from Bank of America.

Like most small business owners, APPI entrepreneurs faced pandemic-related challenges. But this ethnic group also experienced “a surge in anti-Asian sentiment,” which 61% acknowledged impacted their mental health. Yet, despite dealing with their own stress,  AAPI small business owners were concerned about the wellbeing of their employees, leading to almost 75% of them changing, or planning to change, their approach to employee wellness and benefits. Top changes include instituting a more flexible schedule (62%), remote work (50%), offering more paid time off (29%), and offering charitable matching programs or support for community involvement (25%). Plus, 41% cut their own pay to keep their employees on staff.

Fortunately, there were several resources AAPI small business owners could rely on for help, including:

  • Support from friends and family (68%)
  • Local government programs (58%)
  • Other small business owners (55%)
  • Mentors (53%)
  • Their local community (52%)
  • Small business bankers (51%)

Looking to the future, nearly all AAPI business owners reevaluated their company’s operations during the pandemic—and 90% say they plan to make permanent changes. Changes include:

  • Enhancing sanitation practices (54%)
  • Offering a product or service created in response to the pandemic (31%)
  • Accepting more forms of cashless payments (30%)
  • Shifting to a digital sales strategy (30%)
  • Shortening their hours of operation (27%)

Like most small business owners, partially driven out of necessity, 80% of AAPI business owners adopted digital tools and strategies in response to the pandemic, including finding new ways to interact with customers (48%) and employees (35%), and implementing a digital-first marketing strategy (37%).

Asian American business owner stock photo by KimSongsak/Shutterstock

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