Some people have a hard time understanding why they should support Black-owned business instead of “any” business.
But the truth is clear. Black-owned businesses face significant hurdles that are mere speedbumps for white entrepreneurs.
We are not guessing that this is the case. The facts bear out the truth. According to the National Black Chamber of Commerce, minority entrepreneurs are held back in two key areas:
Convincing lenders to loan them money for start-up or business expansion.
Finding investors or strategic partners who believe in their brand.
As a result. Black-owned businesses often start up on a thin budget, with little disposable cash for growth. This lack of capital means that they must do more with fewer people, have less money to market their businesses, and struggle to thrive, in general.
But why does it matter? The fact is, Black-owned businesses contribute to building a more resilient economy, particularly within minority communities. Little business development happens without funding. End of story. So we must work to help change that narrative.
Here are four reasons why Black-owned businesses are essential to the business climate.
Reason One: Black Entrepreneurs Help Close the Wealth Gap
We have an undisputable “wealth gap” in the United States. The United States Census Bureau reporte entitled Income and Poverty in the United States 2019 reveals this breakdown in median household income, currently sitting at $68,703:
Asian: $98,174 per year; 43% above the median income.
White: $76,057 per year; 10.7% above the median income.
Hispanic: $56,113; 18.3% below the median income.
Black: $45,438; 33.8% below the median income.
Due to an early childhood bereft of access to good schools, Blacks often lack the chance to pursue higher education. Thus, many work minimum wage jobs that barely keep food on the table let alone allow them to give their children a brighter future. The cycle repeats itself on an endless loop.
Enterepreneurship affords Black the opportunity to change that. It opens the door to home ownership, better education, and access to better health care.
Reason Two: Black Entrepreneurs Can Earn a Livable Wage
Minority-owned businesses help Blacks earn a more livable wage.
Because of the lack of funding, many Black entrepreneurs are sole proprietors, says a 2020 article published by Black Demographics. They earn enough money to pay themselves, but they cannot expand to hire others. However, that one person—the sole proprietor—usually earns more than they would at the minimum wage job we mentioned earlier. Additionally, they are more likely to be doing a job they love and not stuck in a bad job out of the necessity of feeding their families.
Besides that, this higher wage is the first step to breaking a family cycle of poverty.
Reason Three: Black-Owned Businesses Make Safer Communities
Black-owned small business owners often know firsthand the reality of America’s system of incarceration, which holds 2.3 million Americans behind bars, especially young Black men. Thus, they tend to look at those who served time in the carceral system, as well as people who overcame drug or alcohol addiction, with a more compassionate world view.
While white businesses are more likely to turn away these people, Black people know from anecdotal stories within their communities that the folks who exit these systems must find a way to rebuild their lives from scratch. And they are willing to give them the chance to do it.
Mentorship of people who are in recovery or on parole helps foster a glimmer of hope for people, helping to deter them from relapsing or reoffending and thus recycling back “into the system.” Additionally, Blacks hiring those who are most at-risk makes our communities safer by providing a sense of direction for those who need a mentor.
Reason Four: We Build a Better Economy for All of Us
Black entrepreneurship helps build the foundation of a stronger, more resilient society.
I saw an interesting recent Tweet that said,
“Psssst. White folks…When Black business thrives, we all share a more robust business ecosystem. Buy from a #BlackBusiness – engage in #mentorship for a #BlackOwned startup. Clap when your Black friends succeed.”
It really does not get any clearer than that, does it?
How You Can Support a Black-Owned Business
Here are seven easy ways that you can support a black-owned business.
Purchase from a local Black entrepreneur.
Share the social media content of a minority-owned business.
Use your voice to advocate for diversity.
Mentor a person of color who wants to start a business.
Invest your dollars if a Black-owned start-up.
If you see a minority-based grant opportunity, share the information with Black entrepreneurs.
Create a seat at the table for Black businesspeople in your community.
These are small steps, but they are a good starting point. We must start somewhere, and it is far past time to help Black communities escape the endless loop of poverty and create a more opportune America for all.
