Despite systemic hurdles, Black business ownership is on the rise, booming by 400% in recent years. Even with this growth, though, Black entrepreneurs face unique challenges and could use some support from the rest of the small business community. With August slated as slot online Business Month, we’ve gathered some resources and suggestions for actions you can take to support Black small business owners, on both a local and national level.
Why Black businesses need your support
The small business community in America is a major keystone to the country’s economy. According to a 2019 study from the Small Business Administration, small businesses “create two-thirds of net new jobs” and account for “44% of U.S. economic activity.” As small businesses struggle through the pandemic, many Black businesses will fail without some support, resulting in a further decline in the U.S. economy.
Black-owned businesses are a significantly smaller group than white-owned ones. According to the U.S. Census Bureau, 4 million businesses are owned by members of minority groups, with more than half – approximately 2.6 million – of those being owned by the Black community. To put that in perspective, the SBA estimates that there are more than 30 million small businesses operating throughout the country.
One of the reasons that Black business owners struggle is a lack of funding. Small business owners have long decried how difficult it is to get loans to help them get their ventures off the ground, and this difficulty is amplified for Black business owners. In a recent report from Guidant Financial, experts found that 44% of Black small business owners fund their businesses with cash and 15% get help from their friends and family.
“Without the funds to invest in as many resources as other businesses, such as hiring talent or marketing and advertising, competing for contracts or attracting clients becomes exponentially more difficult,” the report states.