Black-owned businesses have been an essential part of the American economy for centuries. Yet, they have often faced significant challenges regarding access to capital, customers, and other resources. Despite these obstacles, black entrepreneurs have continued to start and grow businesses, and today there are an estimated 2.6 million black-owned businesses in the United States.
One of the most impressive statistics about black-owned businesses is the growth in their number in recent years. According to data from the U.S. Census Bureau, the number of black-owned businesses increased by 34% between 2007 and 2012, compared to a national average of 11%. In 2019, black-owned businesses employed over 1.9 million people and generated over $150 billion in revenue.
However, despite this growth, black-owned businesses still face significant challenges.
Challenges Facing Black-Owned Businesses
One of the biggest is access to capital, as black entrepreneurs are often unable to secure traditional bank loans and other forms of financing. This is due in part to systemic discrimination in the financial industry, a lack of credit history and other factors that make it difficult for black entrepreneurs to secure funding. The report also found that black-owned businesses are more likely to be sole proprietorships, with 82% of black-owned businesses being owned by a single person, compared to 67% of non-black-owned businesses. This can make it more difficult for black-owned businesses to access capital and other resources.
Another major challenge facing black-owned businesses is a need for more access to customers. This is partly because black-owned businesses are often located in areas with lower incomes and fewer residents, which can make it challenging to attract customers. Additionally, many black-owned businesses are not well-represented in mainstream media, making it difficult to reach potential customers.
Despite these challenges, there are many successful black-owned businesses across the United States. Some of the most successful include beauty supply stores, hair salons, clothing boutiques, technology companies, marketing firms, and other professional services. These businesses are often owned and operated by highly educated and experienced entrepreneurs who can overcome the obstacles they face and achieve success.
How To Support Black-Owned Businesses
One of the most important ways to support black-owned businesses is through providing access to capital, mentorship, and other resources. Along with;
- Shopping at black-owned stores and restaurants
- Sharing information about black-owned businesses with friends and family
- Leaving positive online reviews for black-owned businesses
- Investing in black-owned businesses through purchasing stock or supporting crowdfunding campaigns
- Participating in events and initiatives that highlight and support black entrepreneurship.
In addition, it is also important to create an environment that is more conducive to the growth and success of these businesses. This includes policies that address issues such as discrimination, lack of access to capital, and lack of access to government contracts.
Black-owned businesses are an essential part of the American economy, and despite facing significant challenges, they are growing in number. However, to ensure their continued success, it is crucial for policymakers, businesses, and consumers to take steps to support black entrepreneurs and help to level the playing field.
ByzFunder supports black-owned businesses by offering fast, simple and secure small business financing. If you are in need of business financing, or know of a business seeking these resources, apply today.