Businesses owned by black people have been excessively affected by the pandemic-linked economic downturn. However, black-owned companies have always been in a precarious position, even before the pandemic. One of the many reasons that black business owners struggle is because of a lack of funding. Some of these businesses are located in communities with environments that are more likely to produce unfortunate outcomes.
A recent study suggests that 44% of black business owners fund their businesses with cash, whereas 15% get help from their friends and family. One thing is clear that this is the only means black business owners have to buy resources, hire employees, and market their products/services.
Black-owned businesses earn lower revenues in most industries and are also overrepresented in low-growth and low-revenue sectors such as food service and accommodations. Therefore, there is no doubt that black-owned businesses have been facing many challenges to survive, especially during the pandemic. Black business owners face a significant gap in all business activities, leading to an overall lower level of fortune for Black families. A white family’s wealth is more than ten times the wealth of Black families.
Therefore, it is clear how challenging it is for black business owners and entrepreneurs to see their businesses thrive. So what can you do? While buying goods and services from Black-owned companies is a great way to show your support for Black entrepreneurs, there are some strategies you can adopt to show your support for the Black community. Here’s how you can help:
Enabling Impartial Access to Capital:
One of the challenges black-owned businesses face is to collect sufficient funds in order to run their business. Therefore, to overcome the devastating economic barriers, black-owned SMBs need direct investment or in-kind equity contributions, including allowances, subsidies, loans, and revenue-participation agreements.
The increasing accessibility of financial resources for black entrepreneurs will play a vital role in improving their experience and achieving growth. In this way, banks, investors, foundations, and public programs could help make more capital available to black-owned businesses.
Prioritizing Diversity:
The black community still battles racism in many places. However, this is one of the reasons their businesses often fail to survive. Black business owners report an average annual turnover of £25,000, more than a third less than white business owners at £35,000.
A study shows how only 30% of black entrepreneurs say they met their financial aims, and half met their non-financial purposes. In contrast, white business owners said they fulfilled all their financial aims, and 69% met non-financial aims. Therefore, it is essential to develop a strategy where an organization can promote diversity—for example, helping black-owned businesses with networking solutions, designing financial products, offering mentorship for business growth, and practical solutions necessary to transform their businesses.
Facilitating with Knowledge Sharing:
In order to overcome the market gap, it is essential to support and facilitate black-owned businesses with significant knowledge. For example, many institutions or organizations can provide sufficient resources, including help with reskilling or upskilling black-owned businesses’ workers.
In addition, a network of services providers or coaches could help black-owned businesses in directing the process of getting loans, grants, or other affordable capital ranging from large corporations to nonprofit organizations.
Making a Purchase:
Many black-owned businesses, especially SMBs or community-focused businesses, are more prone to getting affected by the current economic storm, as most of them do not have websites. This is one reason why black-owned businesses are so vulnerable as most people start to search for a product online before looking for it on the streets.
Therefore, another strategy to help black-owned businesses survive is to look for small businesses within the community and buy from them instead of searching for the products online. This radical shift in the way people shop can help in keeping black-owned companies solvent.
Spreading the Word:
The most preeminent way to promote a business is to spread the word about it. Since many black business owners fail to invest in marketing and advertising tools and campaigns due to lack of funds, spreading the word about their business can help them survive.
Word of mouth can help build up their reputation and generally draw people’s attention to a store that may have little to no online presence. In this way, it will bring black owners and entrepreneurs more sales and networking opportunities and help them survive and succeed.
The Future of Black-Owned Businesses
The black community has an entrepreneurial drive that helps them in springing up innovative ideas. Unfortunately, many black entrepreneurs and business owners face the same fortune filled with countless challenges. By following a few strategies and ways, you can help black-owned businesses survive.
At Global Black Industry Inc., we go all-out to connect with black business owners to help them with essential tips and advice. We also provide black entrepreneurs with financial help from within our community. Black entrepreneurs can succeed with a little assistance! We are introducing our first product Blk Cent$ Add Up, to help collect funds for the black community in need. These funds will be used for the projects intended to improve the condition of black communities in underprivileged parts of the world. In this way, we can help them complete their education, acquire better opportunities, and fulfill their dreams of becoming successful entrepreneurs. Contact us today and learn more about our products!