Celebrating Black-owned businesses
24 Feb 2021
News, economic development
During Black History Month and beyond, we celebrate the accomplishments of Black business owners and encourage the passion of Black entrepreneurs.
From Madam C.J. Walker, the first female self-made millionaire in America, to Robert F. Smith, the richest Black man in America, the accomplishments of Black Americans in the business world are impressive. However, inequality in the business environment of the United States still exists.
We need to improve
While these numbers are impressive, they should be higher. Black Americans make up more than 13% of the U.S. population, but they only make up 7% of businesses overall, with and without employees (U.S. Census). Discrimination and systematic racism sadly still play a part in businesss development.
Research shows that Black business owners and entrepreneurs have been unfairly turned down by lenders, to the extent that Black-owned firms are twice as likely to be rejected for loans, according to a report by the US Federal Reserve. When Black business owners do get approved for financing, they seldom receive the full financing applied for. Black female business owners are less likely to apply for business loans, but when they do, they are more likely to be turned down (US Federal Reserve).
The wealth gap also contributes to the inequities among Black business owners and White business owners. Annually, Black-owned businesses averaged $58,000 in revenue while White-owned businesses averaged over nine times that amount, studies by Prosperity Now report. Still, business ownership has always been a great equalizer, creating opportunities for any American to launch their idea, turn a profit and grow their business. What’s important is ensuring that all entrepreneurs have equal access to the support resources and network they need to grow. That’s where local economic developers and community leaders can make a sizable impact - through direct outreach and support.
Nationwide resources for minority-owned businesses
Economic developent agencies, government officials, nonprofit organizations and the private sector are partnering to address these disparities and provide more support to the Black Community, including efforts to close the funding gap for Black-owned businesses. State and nationwide initiatives are working to provide more opportunities for Black-owned businesses to receive the funding they need and to make training programs more accessible to minorities.
Minority Business Development Agency: An extension of the U.S. Department of Commerce that promotes the growth of minority-run small businesses by introducing business owners to resources for financing, federal contracts, technical assistance and market opportunities.
SBA 8(a) Business Development Program: Businesses who are at least 51% owned and controlled by a citizen who has been economically disadvantaged due to race or ethnicity are eligible for SBA 8(a) Business Development assistance. This assistance may consist of help securing SBA-backed loans, business-education and guidance programs and opportunities to build connections in the business community.
Operation Hope: Offers small business owners entrepreneurial training programs, small-business workshops and networking opportunities. In addition to training, Operation Hope helps business owners develop a small business plan and gain access to funding and resources to grow their businesses.
National Minority Supplier Development Council: Advances business opportunities for minority-owned businesses by facilitating connection to a network of corporate members who need their products, services and solutions.
Community Development Financial Institutions Fund Organizations: Invests federal dollars alongside private sector capital to support economically disadvantaged communities. Organizations that apply for the CDFI Fund programs may be able to assist Black-owned businesses in acquiring loans, financial services and technical assistance.
Grants.gov: Federal grant opportunities are posted in one location on Grants.gov. Business owners can choose to apply for grants from a variety of agencies and sources here.
Founders First Capital Partners: Works on a revenue-based investment model for service-based companies led by minorities. Payments are determined from cash flow, offering business owners a more flexible payment model.
In addition to these excellent resources, organizations like Prosperity Now, Black Business Association, U.S. Black Chambers, Inc. and Code2040 support and advocate for Black-owned businesses nationwide through education and the creation of resources and initiatives.
Minnesota initiatives to support Black-owned businesses
Minnesota Black Chamber of Commerce: Empowering Black-owned businesses and the people who support them education, advocacy and economic development. The chamber provides access to small business loans, mentorship programs and workshops in order to maximize the potential of every Black-owned business and offer equitable opportunities for growth at every stage of business development.
Black Business Support Collective: The African American Leadership Forum, Black Women’s Wealth Alliance, Just Law LLC, Minnesota Black Chamber of Commerce, Northside Economic Opportunity Network, Neighborhood Development Center, Social Impact Strategies Group, and West Broadway Business and Area Coalition have partnered to form the Black Business Support Collective whose mission is to assist Black entrepreneurs in the many challenges they face as a result of the COVID-19 pandemic.
Entrepreneurs of Color: Legal guidance is a necessity in the journey to starting and maintaining a business. The Entrepreneurs of Color Program makes legal services more accessible to Black business owners, recent immigrants and other minorities. The program provides support to small business owners and those who would like to start a small business who are from historically marginalized communities through business law resources.
African Economic Development Solutions: An excellent resource that provides access to entrepreneur promotion and training, small business technical assistance, micro-lending, financial education and community development in order to build wealth within African immigrant communities.
To learn more about our efforts to celebrate and support Black-owned business owners during Black History Month and beyond, contact us today.