Help Black Businesses Grow and Drive Economic Inclusion
Celebrating National Black Business Month
Black business owners are vital leaders in their communities and create jobs and services for often underserved communities. Black business ownership has been growing, and more Americans are looking to Buy Black to help support the more than 3 million Black-owned businesses now operating in the United States, according to the latest census data.
Growing the support of customers, mentors and funders is critical because Black founders still face greater hurdles in securing investment and loans, and tend to have lower gross revenue than their white peers. As the founder of a woman-owned, Black-owned business, I’ve experienced the challenges and rewards of entrepreneurship and want to help other Black founders succeed.
First the facts
Black-owned businesses have grown significantly in recent years in the United States. A Bank of America survey shows the rate of Black business ownership has risen 38% compared to pre-pandemic levels. Black entrepreneurs are also optimistic about the future with the majority reporting that they expect revenues to increase and thus they are making plans to expand. Their impact is significant. Black-owned businesses in the U.S. generate $206 billion in annual revenue and support 3.56 million jobs according to census data.
But these businesses face more barriers to success than those owned by white founders. Only 1% of U.S. venture investments went to Black-founded startups in 2022, Crunchbase reports. Black-owned businesses are also more common in economic sectors with lower profit margins, such as health care and social services.
Data is harder to parse in the United Kingdom where racial categories are often mixed in reporting statistics. The Black Business Network in the UK says that financing is a major concern for Black entrepreneurs. They are less likely to trust banks, less likely to receive a loan from a bank and more likely to rely on their personal network for financial support.
Financial education can also be a hurdle as Black founders often have had less access to formal financial training and research shows they are more likely to be wary of credit. Even when Black entrepreneurs have the same personal credit history as their white peers, they are still less likely to be awarded a loan, or may be approved for a loan at a higher interest rate.
Become part of the solution
At Monica Motivates, we help underrepresented people succeed as corporate leaders and as entrepreneurs by closing the opportunity gap caused by less access to education, key resources and funding. That mission drives everything we do — from Pitch University to corporate training programs; our rural accelerator; partnership with Microsoft building opportunities for founders in the commercial real estate sector; our annual Global Supplier Diversity Conference that brings big and small businesses together; and even our non-profit, Pivot Purposefully, that helps formerly incarcerated women found and grow businesses.
You can also do things every day to support Black business owners. Here are some ideas.
- Shop with a purpose. There are a growing number of ways today to intentionally buy from Black-owned businesses. You can use databases like org and WeBuyBlack. Amazon also has a Buy Black Store section on its website. In the UK, Black2Business can help you find a wide variety of businesses selling products and services.
- Rethink your service providers. In addition to buying products from Black-owned businesses, check the services you use in your personal and professional life and consider switching providers. Whether you need dental care, home remodeling, tax prep, legal advice, financial planning, childcare or any possible range of services, explore online in your area for Black providers.
- Partner with diverse suppliers. If you own a business or make procurement decisions in a larger company, proactively seek out Black-owned businesses as vendors. At the Sixth Annual Monica Motivates Global Supplier Diversity Conference (GSDC) live September 21, 2023 in Atlanta and London and streaming worldwide, we help large companies and small, diverse suppliers connect and work effectively together.
- Invest in diverse businesses. If you are an angel investor, lender or venture capitalist, learn more about the needs of Black-owned entrepreneurs and how biases and prejudice may affect your decisions and criteria for funding.
- Share your positive experiences. One of the most powerful things you can do as an individual consumer is to share your experience with a Black-owned business on social media. Also, recommend the businesses and service providers you love to others by word of mouth.
- Become a mentor to a Black entrepreneur. If you have business or entrepreneurship experience, share your knowledge with someone just starting out or facing a challenge or opportunity you may have already tackled.
- Host a networking event for Black professionals and entrepreneurs. This is a great way to connect with Black business leaders and find collaboration opportunities between your work or business and theirs.
- Speak at a conference or event about the importance of supporting Black businesses to educate others and serve as a role model.
By supporting Black businesses, especially during National Black Business Month, you can help close the opportunity gap, drive greater economic inclusion and create a more robust economy for everyone.