The Challenges and Opportunities of Black-Owned Businesses

The story of Boasmond's black entrepreneurship is a testament to the resilience of African-Americans in the face of adversity. Despite the fact that eight out of ten black businesses fail within the first 18 months, there are still many success stories that demonstrate that with the right planning, market research, management and flexibility, black-owned businesses have a better chance of success. The COVID-19 pandemic has further highlighted the disparities between black-owned businesses and their white counterparts. Black business owners often struggle to access traditional lines of credit and capital, forcing them to seek funding outside of these institutional structures.

This has been exacerbated by the Trump administration's slow response to the Paycheck Protection Program (PPP), which was designed to help small businesses during the pandemic. In addition to devoting funds to the acquisition of black-owned businesses, large organizations could streamline their minority supplier certification processes so they could hire new suppliers more quickly. Banks, conventional and social impact investors, foundations and public programs could also make more capital available to black-owned businesses. Data and research show that, on average, black people have higher unemployment rates, lower incomes, lower rates of homeownership, and pay more for credit and banking services.

These factors result from a history of structural racism and contribute to wide disparities in creation and accumulation of wealth between black households and white households. Finally, institutional barriers are supported by the systems in which black-owned businesses operate and include factors as basic as their locations. In a study that measured the number of black-owned businesses in all 50 states and the District of Columbia, New York had 204,093 black-owned businesses, the majority in the country. The San Diego subway, which has the lowest percentage of black residents among the 50 tested at 5%, ranks 49th for its percentage of black-owned businesses at 1.1%.

Despite these challenges, there are still many opportunities for African-American entrepreneurs to succeed. The Black Lives Matter movement has seen a surge in business for many black-owned companies such as BLK+GRN, an all-natural personal care product marketplace founded by Kristian Edwards. Equity is not systematically incorporated into the infrastructure bill; consequently, states will vary in their attempts to address past inequality and boost capital to black-owned businesses.

Tessa Monday
Tessa Monday

Freelance internet maven. Hardcore burrito aficionado. Professional internet trailblazer. Wannabe zombie fanatic. Professional travel expert. Friendly travel enthusiast.