What Black business owners need most right now, according to Black business owners

The day Hello Alice launched in 2017, we committed that our primary focus would be the New Majority of business owners, which includes Black business owners. We did this because we saw the major opportunity to work with some of the fastest growing companies in the country, while also closing gaps faced by entrepreneurs of color.

In our continued commitment to Black-owned businesses, our company partnered with the business support organizations Black & Brown Founders, DivInc, and Digital Undivided to compile anonymous owner data and publish a new Impact Report on our Black-Owned Business Resource Center that analyzes challenges that the Black business community is facing right now. Based on responses from more than 28,000 Black owners, 77 percent told us that they need emergency grants immediately.

One of the owners asking for funds was Bridgette Baker, the owner of Sunshine Remodeling, a New Orleans-based property company. Nobody in her family had been landlords, and everyone told her she didn’t have the knowledge, let alone the money, to remodel and rent out real estate. But after years of repairing her credit, watching countless home improvement videos, and building some literal sweat equity alongside her husband, Baker now owns and manages a multi-family unit and a single-family home. The difficult journey was all worth it, she says, because of what it means for her daughter’s future.

“As an African American female, I wanted our daughter to know you can do anything you set your mind to with determination and a zeal to achieve your goals,” she says. “I wanted to put myself in a position to create generational wealth and a legacy for our daughter.”

The term generational wealth, might be the key to unlocking the unique challenges facing Black business owners. Talent and hard work are not always enough to overcome a persistent racial wealth gap that puts Black entrepreneurs at a disadvantage when starting a small business. Combine that reality with the challenges of COVID-19, and certain estimates project that more than 40 percent of Black businesses are in danger of closing forever.

While Black entrepreneurs overwhelmingly said in the survey that access to capital is their number one need right now, it’s certainly not the group’s first time facing this issue. Deldelp Medina and Aniyia L. Williams of Black & Brown Founders put it best in the report’s opening letter: “You can’t fix what you don’t even consider counting.” In other words, just because you haven’t been paying attention doesn’t mean these problems are new.

Many business leaders continue to lack a basic understanding of the historical obstacles facing Black business owners because they haven’t taken the time to gather information on the community. We must all gather specific data and educate ourselves on the longstanding institutional barriers standing in the way of success for all New Majority business owners, but particularly the Black community.

Collaborate with organizations that promote entrepreneurs of color.

DivInc CEO Preston James implores in the report that business leaders can proactively engage in collaborative partnerships with organizations, such as ones like DivInc, BlckVC, Black Woman Talk Tech, and Black Innovation Alliance which help promote underrepresented entrepreneurs, build profitable, high-growth companies.

Business owners and consumers themselves can also open pocket books and seek out collaboration. A great example is the My Black Receipt, a campaign led by The Black Upstart and Kezia M. Williams, which quantifies collective purchases from Black-owned businesses, and has so far driven nearly $10 million in sales to Black-owned small businesses.

Finally, community leaders can harness their power and influence. If you hold any sway with governments, foundations, the VC community, or other groups, remember that Black business owners often need access to social capital as much as financial capital. A simple introduction or mentor relationship might change the course of an entrepreneur’s life.

Enterprise has a role to play as well.

As Robert F. Smith of Vista Equity Partners points out, “Nowhere is structural racism more apparent than in corporate America.  If you think about structural racism and access to capital, 70 percent of African American communities don’t even have a branch bank of any type.”

Black business owners overwhelmingly requested access to funding, with 81 percent of respondents to our survey reporting that they need less than $100,000 to stay in business. Part of this means continuing the call for rent relief, tax deferrals, and tax waivers that business owners are asking for. It’s also about pressuring government leaders to extend emergency funding programs.

In response, Smith is pushing an initiative that urges the nation’s enterprise leaders to invest 2 percent of net income over the next decade into minority communities as a small step toward restoring equity and economic mobility in America.

Rising Tides Lift All Boats

Tackling these problems will be hard, yes, but leaders who ignore the Black community will do so at their own peril. Black women are already the most educated group in this country and comprise the fastest growing group of people creating businesses. What could Black entrepreneurs accomplish with the proper support and resources? What incredible innovations, experiences, and generational wealth do we forfeit if we continue to neglect this community?