Supporting AAPI-Owned businesses

The Asian American and Pacific Islander (AAPI) community is among the most diverse and entrepreneurial in the U.S., creating businesses at a rate that far outpaces other minorities in some cities. 

Yet while the Covid-19 pandemic has sparked a boom in small business for many communities, AAPI business owners and AAPI people in general have faced unique challenges, including higher rates of discrimination and, more alarming, violence in recent years. That’s in addition to a funding gap that leaves many AAPI struggling for loans and other sources of money critical to their operations. 

As we celebrate Asian American and Pacific Islander Heritage Month, we take a look at the importance of AAPI entrepreneurship in the U.S. as well as their challenges. And we offer some ideas for supporting

AAPI-owned businesses

“Everyone has a part to play in assisting AAPI small businesses, not just during AAPI Heritage Month, but throughout the year,” says Chiling Tong, president and chief executive officer of the National Asian/Pacific Islander American Chamber of Commerce and Entrepreneurship (National ACE), based in Washington, D.C. “Whether you’re a large corporation or a fellow small business owner, sharing your support of the AAPI business community by using your networks and platforms is a great way to build advocacy and awareness for this important community.”

AAPI-owned Businesses in the U.S. 

There are more than two million Asian-owned businesses, making up nearly 8 percent of businesses in the U.S., according to the most recent data from the U.S. Census Bureau. Combined, these small businesses earn revenue of $700 billion annually and employ around 3.5 million people, according to business consultancy McKinsey.

Approximately 40 percent operate in the accommodations and food industry, while 25 percent in the retail sector, and 6 percent in professional, scientific, and professional services, according to the National Coalition for Asia Pacific American Development (National CAPACD). 

At the same time, there are over 50 distinct ethnicities and languages with a total of more than 100 native dialects represented in the AAPI community. “Not all resources may be accessible to every language,” says Tong. “This makes it difficult for members of the AAPI business community to get access to the information they need to continue operations, or even open a new business with every competitive advantage.” 

The funding gap for AAPI-Owned Businesses 

Nearly two thirds of AAPI-owned businesses report not receiving federal and local aid because they simply didn’t think they would be eligible, according to a recent survey by a survey by National ACE. AAPI small business owners also report being unaware about these aid programs, or ran into snags in applying for help from governmental agencies, or had difficulty checking off the boxes to meet eligibility, according to other research.

For example, during the first year of the pandemic, 58 percent of AAPI entrepreneurs reported that they had difficulty accessing federal, state, and local relief programs targeted to support small businesses. Of the $800 billion in federal dollars provided as a lifeline to small business owners through the federal Paycheck Protection Program (PPP), a scant $7.7 million went to AAPI-owned businesses. 

Additionally, Asian-owned businesses tend to make up large portions of industries that were disproportionately hit by the pandemic, according to McKinsey, comprising 26 percent of accommodations and food service businesses, 17 percent of retail trade, and 11 percent of education-services businesses.

In fact, the number of actively run AAPI-owned businesses decreased by 26 percent from February to May 2020, according to research from the National Institutes of Health, compared to an 11 percent decrease for actively run White-owned businesses. (Black-owned and Latinx businesses also experienced 41 percent and 32 percent decreases respectively.)

One reason may be the spike in hate crimes targeting the AAPI community. Nearly 11,000 hate incidents were committed against Pacific Islanders and Asian Americans nationwide between March 19, 2020 and December 31, 2021, according to recent research from the nonprofit Stop AAPI Hate.

“There’s been an escalation of violence incited, from hate speech to physical attacks, that has rendered fear among AAPI businesses, making it even more difficult to navigate through the already trying times of the pandemic,” says Nahida Uddin, a spokesperson for the National Coalition for Asian Pacific American Community Development (National CAPACD).

And the problem may be continuing to have a negative influence on day-to-day business activities, says Tong. “Asian American and Pacific Islander business owners are under additional stress as a result of this issue, which creates tension and presents a significant barrier,” Tong adds.

Investing, donating, and shopping

Here are a few ways to support AAP-ownedI businesses. 

Spend money directly with AAPI businesses. Consider scouring your favorite arts, culture, or food websites to see if they’ve published recent roundups of AAPI establishments in your city. You can also check out AAPI small business guides curated by Dwell, New York Mag, or Cold Tea Collective, or Etsy’s Editors’ PIcks of AAPI small businesses on the shopping platform.

Visit your local Chinatown, Little Tokyo, Thai Town, or make it a destination spot during your travels. Besides legacy businesses, such as the traditional Chinese restaurant with rows of roasted Peking duck dangling in the windows, or the imported toy and trinkets kiosk, make a point to also visit brick-and-mortar establishments sprouting up by newer generations of AAPI business owners. “I would love more awareness of Asian American design as a category,” says Jeff Lien, who co-founded design store Chunky Paper in Los Angeles’ Chinatown.

Donate. Do your part in supporting AAPI businesses by donating to nonprofits that assist small business owners, such as National ACE or the National CAPACD. 

Consider giving money to crowdfunding campaigns for entrepreneurs who are starting new ventures or growing current ones. For example, platforms such as IFundWomen of Color allow AAPI-owned businesses run by women to launch fund-raising campaigns from a pool of small investors. 

Partner with fellow business owners. If you’re a business owner, look for ways to support AAPI businesses through collaborations. “By promoting fellow AAPI businesses to your own consumers, it is a great way to cross-promote shopping local and spending local for the small business community as a whole,” says Tong.