The United States has a long history of racial inequality, and this has been reflected in the business world. Despite the fact that the US ranks second among countries outside of Africa with the largest black population, black-owned businesses have faced numerous obstacles in their growth and development. This article will explore some of these obstacles, as well as some of the successful black-owned businesses that have managed to overcome them. One example of a successful black-owned business is Atlanta Life, founded in 1905. Despite facing numerous obstacles, Atlanta Life has grown into an asset management and insurance company that is still owned by African Americans.
Another example is Carver Federal Savings Bank, founded in 1948 to serve African-American residents and businesses that were rejected by many other banks. Unfortunately, there have also been cases of extreme racial violence against black-owned businesses. One such case is the Tulsa racial massacre in 1921, which is said to be the worst racial attack in US history. White men attacked what was then known as Black Wall Street, destroying at least 35 blocks and killing hundreds of African-Americans.
The US government covered up the incident and no repairs were made until 1996. Today, there are many successful black-owned businesses across the US. Devon Industrial Group is a construction company located in Michigan that specializes in commercial, healthcare, industrial and educational projects. Georgetown Metal Processing is a steel processing service center located in Georgetown, Kentucky that offers aluminum, flat rolled steel, cold rolled steel, coated and exposed steel products. Bird Electric is a full-service electric company that operates in more than ten states across the US.
Adams Communication & Engineering Technology is a leading technology company that provides services for Government Defense, Intelligence and other US Federal Agencies. Fair Oaks Farms is a food service company that produces fresh, ready-to-cook and fully cooked beef, pork and poultry products. The COVID-19 pandemic has had a particularly devastating effect on black-owned businesses. According to the Small Business Credit Survey (SBCS), approximately 79% of Asian-American owned businesses and 77% of black-owned companies reported poor or fair financial standing, while only 54% of white-owned companies reported similar conditions. Nearly 75% of African-American and Asian-owned businesses reported difficulties paying their operating expenses, compared to 63% of white-owned businesses.
Black small business owners were also the most likely to experience difficulties accessing credit (53%). The Paycheck Protection Program (PPP) was an important economic buffer for many businesses during the pandemic, but key flaws meant that it was largely regressive and was not aimed at businesses with the greatest need. Table 2 shows the 10 metropolitan areas with the highest number of black businesses. In order to create a more equitable business environment for African Americans, policymakers must address structural issues such as access to capital and resources, as well as racial discrimination in hiring practices. It is also important to recognize the successes of black entrepreneurs who have managed to overcome these obstacles and build successful businesses.