If you are a Black business owner then there’s no question that the recent economic downturn has likely been especially hard for you. Just look at the numbers.
A National Bureau of Economic Research study found that the number of Black-owned businesses fell by 41% during the first few months of the pandemic. A separate study by New York’s Federal Reserve correlated that data, finding that those same businesses “suffered disproportionately” as compared to businesses owned by whites and other ethnicities. Worse still, 69% of business owners surveyed by the US Chamber of Commerce and MetLife said that minority business owners faced a tougher road than their white counterparts, which is up from 52% in January. It’s bleak.
The reasons for all these troubles are well documented. A larger share of Black-owned businesses operate in poorer areas than their white counterparts and it’s those areas that get affected the most during any economic downturn, particularly the one we’re experiencing right now. It is a widely accepted fact that educational and financial resources – from business degrees at universities to capital access from bankers and venture capitalists – are harder to come by for a Black entrepreneur. And there remains an enormous level of discrimination, racism and prejudice that continues to challenge progress.
But while the situation is difficult and systemic change is likely to take more time, and effort, there is help available in this moment of crisis. Thanks to Black Lives Matter and other protest movements the level of awareness of the plight of Black-owned businesses has soared. People and organizations want to help and corporations, universities, banks and brands are falling over themselves to display their commitment to diversity. This is not to detract from the very real issues these businesses and their communities face but there are now new opportunities for you to leverage.
For starters, there are special resources to help potential customers specifically find Black businesses to buy from and support. A new feature allows Black businesses to identify themselves on Google Maps with a special badge. Yelp is doing the same for its listings. Websites like the Black Owned Directory, Shop Black Owned and EatOkra enable visitors to find Black-owned businesses and restaurants in New York, Charlotte, Los Angeles, Dallas and other local areas. Black Nation is a social community that claims it’s kind of like an Instagram specifically for Black people and, while Amazon and eBay are trumpeting their support for Black-owned merchants selling on their sites, WeBuyBlack brands itself as an online marketplace specifically for Black-owned businesses. If you’re a Black-owned business, listing yourself on all these sites can help sell your products and promote your company.
There are also many more educational options open for Black business owners than ever before. Many not-for-profits – from federally funded Score, Small Business Development Centers and the Minority Business Development Agency to the National Minority Supplier Development Council and the National Black Minority Association – provide free or low-cost counselling, consulting and business classes geared towards minority business owners. For students, Scholarships.com has a long list of financial aid and scholarship programs specifically geared towards aspiring business students who are minorities and seeking help to pay their college tuition.
Finally, and most importantly, there continues to be a growing number of new sources of funding specifically geared towards Black businesses. Not-for-profits like Accion, Backstage Capital and the Foundation for Business Equity provide much-needed seed capital and financing for minority owned businesses. The Small Business Administration, federal agencies, major cities and states all have programs to give access to Black and minority-owned businesses to projects, contracts and programs. Banks across the country are re-evaluating their flawed loan application processes in order to accommodate more Black and minority-owned businesses. Brands – such as Discover, Facebook, Verizon, SoCal, US Bank, Citizens Bank and American Express – are offering hundreds of millions of dollars in generous grant programs specifically for Black entrepreneurs.
I don’t want to sugarcoat. The simple fact in 2020 is that it’s much harder to be a Black business owner than if you’re white. Period.
But there are a growing number resources to help and Black entrepreneurs should take full advantage of them. Apply for grants, list your business, get a certification, understand debits and credits, meet with bankers, call a counselor. Not just for yourself, but for future generations of Black business owners.
Source: The Guardian