Black business owners often have to overcome big odds in their desire to achieve the American dream. Fortunately, they can count on the support of some forward-thinking individuals and institutions to overcome these barriers. What are the most pressing challenges that black-owned businesses face, and how can they overcome them?
Challenges Faced by Modern Black-Owned Businesses
According to Brookings, as of 2019 only 2.3% of all employer firms in the US were black-owned. This disparity is worrying, considering blacks account for at least 14% of the population. Although successive governments pledge support for black-owned businesses, they still face enormous difficulties such as:
1. Institutional barriers
Black businesspeople are more likely to be denied loans, grants and other funding opportunities compared to their non-black counterparts. Other institutional barriers include bureaucracy and inadequate information about capital sources.
2. Lack of mentorship
Black entrepreneurs are more likely than other races to be the first of their generation to operate a particular business. Although commendable, it means they’re also unlikely to have older relatives, friends, or acquaintances who can give them deeper insights into running the business.
Intuit’s comprehensive Black Business survey reveals persistent inequalities black business owners face despite the groundswell of support for BLM. A whopping 79% of respondents reported experiencing racism from customers. 82% stated they had to change their mannerisms while interacting with customers to avoid racist stereotypical judgments.
On a positive note, 85% of the Intuit survey participants revealed they were able to draw a salary from their businesses in 2022. 75% of respondents also agreed that successful black-owned businesses were essential to creating a prosperous black community.
Crucial Resources to Empower Black Businesses
The past three decades have seen various institutions take a keen role in correcting the economic underrepresentation of black businesses. They include civil rights groups, growth engines, non-profit organizations, and venture capital firms. Examples are black-focused business directories such as We Buy Black and social media marketing pages such as Black Owned Everything on Instagram.
The NAAIA Foundation offers comprehensive business growth support for black professionals in the financial services and insurance industries. These crucial resources include scholarships, community development programs, networking opportunities, specialist training, and agency ownership.
NAAIA provides exceptional career growth prospects for African American professionals. Our mission is to provide philanthropic support to local communities by partnering in established programs. We also invest in organizations that champion inclusivity, equity, diversity, and economic sustainability. Contact us for more information about our initiatives.