Celebrate Black History Month . . .
Four Ways Black Owners Can Defy the Odds and Drive Entrepreneurial Success
You know in your gut what the research bears out — underrepresented founders have to work harder to be taken seriously, especially in areas where society and investors may not expect to see them. In a study commissioned by the National Black Chamber of Commerce in 2020, three in five Black business owners said they struggled with being taken seriously.
This challenge may help explain why Black entrepreneurs, and especially Black women, more often pursue businesses in less lucrative sectors of the economy. In fact, almost three-quarters of businesses owned by Black women and more than 60 percent owned by Black men are concentrated in industries that generate lower revenues, according to McKinsey & Company.
Greater public awareness in the past year has driven some gains in business for Black-owned companies, but many hurdles remain that require extensive interventions. While we continue to advocate for those, consider these personal action steps to carve out more wins now.
- Explore lucrative business sectors. Of course, your passions and unique skills help fuel your desire to own your own business. Still, it’s worth considering, from business ideation to expansion, if your passion could be applied in a more profitable setting. The wholesale business sector, for example, drives 24% of business revenues, but only 1% of wholesale businesses are owned by Black women and 2% by Black men, McKinsey reports.
Or, perhaps you possess specialized skills that could be applied to the lucrative consulting market with low overhead and higher margins. Some examples include SaaS (software as a service), virtual event management services, web design, mobile app development and accounting services.
- Find support. Black entrepreneurs tend to have less immediate access to the networks that help young businesses succeed, but it is out there. Make it a top priority to use the full range of resources available through Monica Motivates (including Pitch University and the Global Supplier Diversity Conference) to get targeted support from experts who understand the unique barriers you may face.
The Small Business Administration’s (SBA) latest round of Paycheck Protection Program (PPP) forgivable loans launched with a special emphasis on reaching minority-owned businesses and lower-income areas. They launched first with certified Community Development Financial Institutions (CDFI) that chiefly aid minority-owned businesses. Follow up now with the SBA or your banker to apply.
Many corporations are also increasing their support for and proactively seeking to do business with Black-owned businesses. Identify procurement opportunities that are a good fit for your business and reach out with a professional pitch to seize this important opportunity.
- Build and project confidence. It’s a lifelong journey for most of us, but there are steps you can take now to confidently put your hard-earned expertise front and center.
- Keep a success log to track, revisit and recall confidence-boosting moments.
- Focus on the potential benefits of reaching out to new contacts despite potential rejection. Research shows a positive mindset can increase your motivation and make others more likely to respond to your energy and enthusiasm.
- Develop shorthand techniques to call attention to your credibility. Include a concise tagline on your business card and email signature that speaks to your years in the industry, prior roles and previous employers. Include advanced degrees behind your name or in your bio (30% of Black owners with at least one paid employee hold an advanced degree compared to 22% of their white peers).
- Spend time around other entrepreneurs. Sharing the journey with others on the same road can help put challenges in perspective.
The rewards of running your own business are substantial and the challenges can feel that way too. Monica Motivates helps you create more moments with the wind at your back.