Creating economic prosperity for Black businesses not only helps the business owners. It also makes a positive impact on the communities they support. However, these businesses face numerous challenges and barriers to success, including access to capital and a lack of generational wealth to financially support their businesses. These struggles place an even greater emphasis on supporting Black businesses, both locally and nationwide.
Below, we highlight the challenges that Black business owners face, along with organizations that are taking a stand to help these businesses thrive.
Challenges That Black Business Owners Face
Black businesses are on the rise. According to Brookings, from 2017 to 2020, Black businesses saw a 13.64% increase in the U.S. Apart from an initial drop in Black businesses in the latter half of 2020, the numbers continued to steadily increase, and by 2022, there was a 38% increase in new Black business owners. However, despite the increases, they still face incredible challenges.
The Black community faces systemic barriers when it comes to starting a new business, especially around securing capital. While many white entrepreneurs rely on bank loans to start a business, Black entrepreneurs do not have the same access to this form of capital due to systemic barriers. Instead, they are forced to rely on personal savings and credit card debt. And for those Black entrepreneurs who do get a bank loan, according to a Journal of Marketing research paper, banks are more likely to offer Black individuals subpar bank loans and services compared to their white counterparts.
These challenges make it extremely difficult for Black-owned businesses to achieve broad success within their industries.
Organizations Uplifting Black Business Owners
The Black Economic Alliance (BEA) is one organization that is making it their mission to uplift Black business owners. This organization is composed of Black business leaders and allies who are all working toward a common mission of driving economic impact for the Black community through public policy, advocacy and engagement with political and business leaders. BEA acts as a partner and champion to Black businesses and entrepreneurs across the U.S. who are looking for support. The organization provides Black business owners with valuable resources to further the economic prosperity of the Black community.
Southern Communities Initiative (SCI) is another organization that is on a mission to help Black businesses. Their ultimate goal is to advance racial equity across the six Southern U.S. regions, where approximately 50% of Black Americans reside. One area in particular that the Initiative focuses on is growing and supporting Black-owned businesses. This is achieved through helping business owners access capital, along with helping fund and modernize community development financial institutions (CDFIs) and minority depository institutions (MDIs).
Robert F. Smith's Dedication to Black Businesses
As a member of the BEA, Robert F. Smith understands the impact that supporting and growing Black businesses has on communities across the U.S. and their economies. In pursuit of this goal, Smith co-leads SCI alongside Dan Schulman (CEO of PayPal) and Rich Lesser (Global Chair of Boston Consulting Group). Both of these organizations, and Smith himself, are dedicated to creating economic prosperity for Black businesses that will have a lasting impact for generations to come.
Learn more about Smith’s philanthropic endeavors by following him on LinkedIn.
