Wondering how your business can support Black business owners? Here are some ideas and resources to help you get started.
Despite systemic hurdles, Black business ownership is on the rise, booming by 400% in recent years. Even with this growth, though, Black entrepreneurs face unique challenges and could use some support from the rest of the small business community. With August slated as Black Business Month, we've gathered some resources and suggestions for actions you can take to support Black small business owners, on both a local and national level.
Why Black businesses need your support
The small business community in America is a major keystone to the country's economy. According to a 2019 study from the Small Business Administration, small businesses "create two-thirds of net new jobs" and account for "44% of U.S. economic activity." As small businesses struggle through the pandemic, many Black businesses will fail without some support, resulting in a further decline in the U.S. economy.
Black-owned businesses are a significantly smaller group than white-owned ones. According to the U.S. Census Bureau, 4 million businesses are owned by members of minority groups, with more than half – approximately 2.6 million – of those being owned by the Black community. To put that in perspective, the SBA estimates that there are more than 30 million small businesses operating throughout the country.
One of the reasons that Black business owners struggle is a lack of funding. Small business owners have long decried how difficult it is to get loans to help them get their ventures off the ground, and this difficulty is amplified for Black business owners. In a recent report from Guidant Financial, experts found that 44% of Black small business owners fund their businesses with cash and 15% get help from their friends and family.
"Without the funds to invest in as many resources as other businesses, such as hiring talent or marketing and advertising, competing for contracts or attracting clients becomes exponentially more difficult," the report states. [Read related article: 10 Small Business Grants for Minorities in 2020]
The monetary struggles don't end there. According to a study conducted by The Brookings Institution's Joseph Parilla and Sifan Liu, just 49% of Black-owned businesses that existed in 2002 were still around in 2011, compared with the 60% of white-owned businesses that remained. With COVID-19 forcing many businesses to shut down for an extended period, many experts are predicting that more than 40% of Black-owned businesses won't survive the pandemic.
"Unlike other communities, African Americans are not as equipped today to recover from a second period of economic collapse," Kristen Clarke, president and executive director of the National Lawyers' Committee for Civil Rights Under Law, recently told National Geographic.
How to find Black businesses to support
If you want to support Black-owned businesses but don't know where to start, you can find numerous resources online, compiled by various organizations and media outlets. Black small business owners have also begun compiling and sharing lists of resources aiming to keep the African American entrepreneur community alive. These are some methods you can use to locate and frequent Black-owned businesses.
1. Buy directly from Black-owned businesses.
It can be difficult to make online purchases directly from Black vendors on major retail platforms like Amazon, since it's not always immediately apparent which third party is selling which item. Sites like WeBuyBlack, Support Black Owned and Nile help consumers connect directly with Black-owned brands locally and online.
2. Check out Black business groups.
Aside from general lists of Black businesses, some organizations highlight specific corners of the Black-owned market. Through sites and apps like The Black Business List, the African American Literature Book Club and EatOkra, users can locate and frequent Black-owned businesses.
3. Use social media to find local Black-owned businesses.
Social media and mobile apps can also help you locate Black-owned businesses to support. For instance, Black Nation and Official Black Wall Street are apps that let you search for all kinds of businesses, browse detailed listings for those businesses and search for special offers. On Instagram, Twitter, Facebook and other social media platforms, you can search for hashtags like #BlackOwnedBusiness, #SupportBlackArt and #SupportBlackBusiness to find even more Black-owned businesses.
Black B2B vendors and suppliers
As a small business owner, you likely already have relationships with vendors, suppliers and other companies that support your own business. As your contracts come up for renewal, consider Black-owned companies as potential vendors. One national effort picking up steam is the 15% Pledge, which encourages retailers to commit 15% of their shelf space to products sold by Black-owned businesses.
Here are some Black-owned business-to-business companies that may be of interest to small business owners looking for new vendors.
Mobile Defenders: Headed by CEO and co-founder Jordan Notenbaum, Mobile Defenders helps both small businesses and the average tech consumer find cell phone parts for repairs. Though it started as a source for parts, the company has grown to also cover consultation services, marketing materials and other needs.
OnceLogix: If your healthcare firm needs custom web-based applications, OnceLogix could be a strong solution. Formed in 2005 and headed by CEO Trinity Manning, the North Carolina company provides digital tools like payroll, management and timeclock apps.
LISNR: This company helps retail and transportation businesses handle transactions with high-tech checkout solutions. Headed by CEO and President Eric Allen, LISNR uses ultrasonic technology to handle things like proximity verification and contactless transactions.
McKinley Resources: This Dallas-based cosmetics and personal care ingredient supplier provides source materials to companies that create their own health and beauty products.
True Moringa: This Massachusetts business supplies skin care products to retailers at wholesale and to consumers through its website. True Moringa also supplies ingredients to companies in the health and beauty industry.
- JFI Packaging: Describing itself as a full-service packaging company, JFI Packaging assists businesses by designing, manufacturing and shipping "folding cartons, point-of-purchase displays, instructional inserts and leaflets" for retail products.
Further actions business owners can take to support the Black community
While buying goods and services from Black-owned businesses is a good way to show your support for Black entrepreneurs, there are also some socially conscious actions you can take as a small business owner to show your support for the Black community.
1. Prioritize diversity at your business.
The first thing you should do is look within your own business for ways to improve workplace diversity and inclusion. Including more people of color among your ranks not only helps combat racial inequities but may also increase your revenue. According to a Boston Consulting Group study, companies with diverse management teams produce 19% higher revenue. The same study found that companies with above-average diversity scores had 45% higher innovation revenue, compared with 26% average innovation revenue at companies with below-average diversity scores. [Read related article: Diversity Isn't a Checkbox: Here's How to Make It an Intentional Movement]
2. Evaluate your company's hiring process.
A crucial part of improving diversity at your business is becoming more inclusive in your hiring practices. Refine your hiring practices to remove any unintended biases and ensure you hire the most qualified candidate. Start by checking your job postings to make sure they encourage diverse candidates to apply.
3. Expand your target customer base to include Black consumers.
Inclusivity can take many forms within your business. Evaluate your target market and your marketing campaigns to make sure you're reaching Black consumers. Through concepts like diversity marketing, you can increase foot traffic, which also increases your bottom line.