Why does DEI matter in small businesses?

DEI in business

For any sized business, it is vital to implement diversity, equity, and inclusion (DEI) in your culture. It is a win-win scenario for businesses because it makes everyone feel included, but it also equates to sustainable business growth and success. 

Having a diverse team that feels valued and heard means having different perspectives, opinions, and ideas. This ultimately results in greater productivity, creativity, ideas, solutions, and much more. Let’s talk more about why DEI matters in small businesses below and how you can achieve it at your workplace.

What is DEI?

DEI stands for diversity, equity, and inclusion. While these terms are sometimes deemed synonymous, they differ and all make a workplace more successful and welcoming. Diversity refers to multiple different demographics of various types of people being represented. It is usually based on demographic groupings. There are both inherent diversity factors and acquired diversity factors. 

Inherent diversity factors, according to the Harvard Business Review, include the likes of age, sexual orientation, ability, race, and age. Acquired diversity factors include educational background and finances because they are dependent on life experiences. Meanwhile, equity is all about making sure opportunities are accessible for this diverse range of people. 

Finally, inclusion is about tailoring communications and the workplace environment so that diverse individuals feel they are both heard and seen. Inclusion matters because it makes people feel they belong, as they should feel in their work environment. All terms have distinct meanings, but they must all be implemented in a workplace together. This is why they are grouped together under an umbrella for a more positive and thriving work environment. Diversifying a workplace is generally the first stage, but this does not mean the other two just happen automatically. 

Businesses must work to address the matter that people of various backgrounds have alternative obstacles to achieving their objectives, different communication methods, and much more. They are more than just a checklist of boxes to be checked off. When it comes to implementing DEI, businesses can make external or internal efforts. An example of instilling diversity, equity, and inclusion in a business internally would be ensuring all the teams are diverse but also that they are supported. 

External approaches, for example, could include a business creating meaningful connections with all different demographic groups within its audience. Additionally, adjusting their communication with them accordingly and supporting them. Implementing DEI has significant advantages for businesses which is why it is so important, especially in smaller enterprises. We’ll get into why it is so important in the next section of this article. 

The importance of DEI in business

Implementing diversity, equity, and inclusion can greatly help your business. For one thing, it shows your authenticity and makes the business more trustworthy among consumers. Research finds customers and team members better trust diverse and inclusive companies. Hiring diverse individuals and making them feel heard, seen, and included only improves brand image.

Companies that diversify their teams simultaneously diversify their audience. This means they reach and connect with more people. The Harvard Business Review found that diverse businesses are 70 percent more likely to expand their markets. With the next generation, Gen Z, being made up of 48% of nonwhite individuals compared to 28% previously in the baby boomer generation, implementing DEI means future-proofing your business.

When it comes to performance and business success, DEI also has a positive impact here. Diverse opinions, perspectives, and ideas often result in greater innovation. The reason is that these individuals each have different life experiences, and as a result, how they navigate solving problems varies. Research has found a strong connection between good decision-making and inclusivity in the workplace.

Most small businesses are also local, and people generally deem them a member of the community as a result. Therefore, diversifying your business only rubs off positively on your local community, making them do the same. Additionally, people of different demographic groups living in the community are more likely to support your business as they appreciate your efforts to represent them. 

According to a report by Research and Markets, diverse businesses also earn 2.5 times higher cash flow per employee and inclusive staff are over 35 percent more productive. The report’s findings come from a survey which took data from 120 companies, including PwC and Deloitte. It is clear, a strong organisational culture and solid structural foundation, are necessary for gaining agility that derives from internal strength.

How to implement DEI

Its clear diversity, equity, and inclusion are integral components of a successful business. So how do you take steps to make your business more diverse and inclusive? There is no one size fits all solution for every single enterprise. In saying that, DEI practices are increasingly becoming standard practice. For this reason, several general strategies have emerged which you can take inspiration from. It is all about fostering a more welcoming workplace environment. 

  1. Start the conversation on how to become more diverse and inclusive

If you want to create a more inclusive workplace, a great place to start is identifying who your business could be excluding. Take a look at who you market your products to, the members of your team, and how accessible your business is to others. How do you recognise who you are excluding? Speak directly to the diverse community your business strives to serve.

Customers will happily give their feedback and appreciate any business that is taking steps to become more inclusive and diverse. You can collect feedback on social media, via email, or through reviews, for example. While this could result in negative comments, it is vital to take it as constructive feedback and read between the lines. Think about the person’s background and why they may be saying this to you.

For this reason, it is a good idea to include some demographic indicators so you can better analyse the results to make those improvements. While you are at it, get feedback from your team members too. Perhaps they have some thoughts on how inclusive or exclusive the work environment is and have ideas on how to diversify the office. Some businesses tackle this by hiring a DEI consultant or working with community advocacy organisations too. 

  1. Create an action-based DEI strategy with key indicators to track your progress

When looking at how you can implement DEI in your workplace, you should also consider creating and committing to an action-based plan. It is not enough to just say you want to become more diverse and inclusive. When creating the plan, consider the people you want to make a bigger effort to include and why you chose them. Similarly, it is vital to have some indicators to track your progress in achieving your DEI targets. So, devise some indicators that will help you determine how well it is going. 

An action-based plan of this nature on DEI should include specific things you want to accomplish and the areas of the business that are positively transforming. This could include changing products themselves or using different brand imagery. It is also important to note that inclusivity and diversity matters are ongoing commitments. For this reason, you must regularly check in and assess your progress. Not to mention get feedback and constantly reevaluate your approach. It is a good idea also to have one designated person to own the implementation of your DEI strategy. 

Another thing to keep in mind is that not just one person in your business should be well-versed in all things diversity, equity and inclusion. Your entire workforce of staff should also understand each of these terms and why they are important. For that reason, it is a great idea to have your team undergo some educational training on DEI. You should also consider organising a public statement on your new DEI strategy to demonstrate you are committed to being more diverse and inclusive. This shows your transparency surrounding social justice and ultimately enhances your brand image and strong leadership. 

  1. Take inspiration from other businesses who have successfully implemented DEI

Finally, if you are stuck on what to do when it comes to DEI, have a look at some of the businesses that have been successful in implementing it. As mentioned above, not every approach will work for every business, but there is no harm in appreciating and taking some inspiration when the shoe fits. Businesses that are committed to DEI should not work in isolation. Rather they should share their stories and reflect on their successes and challenges and provide resources and advice to other businesses that wish to make DEI a part of their DNA. 


It’s not enough to just say you want to be more diverse or inclusive. You need to take action and implement DEI strategies and practices. Embedding diversity, equity, and inclusion into your workplace have many advantages. These include enhanced trust and authenticity from your customers and the ability to reach a wider audience. 

Additionally, empowering the community to be more diverse and inclusive too and supporting each member. Implementing DEI is also a huge opportunity for innovation, gaining better talent, and generating higher profits. DEI is integral to business and if you want to succeed, having everyone in your corner is a big help.

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