August marks the 17th anniversary of National Black Business month, which was launched by historian John William Templeton and engineer Frederick E. Jordan Sr. in 2004 to shine a spotlight on the more than two million Black-owned businesses in the U.S. These businesses often face disproportionate challenges to success, and this month of heightened awareness provides an opportunity to increase advocacy, education and policy efforts to spur growth and inspire others.
To say that the 12 months since the last National Black Business month has been a challenge is an understatement. The COVID-19 pandemic and resulting shutdowns, the uneven allocation of relief funds to Black businesses, and the overall conversation around racial injustice have led to some difficult times for Black business owners. Yet, there continues to be light at the end of the tunnel.
According to census data, 380 out of every 100,000 Black adults became new entrepreneurs in 2020. That means there were more new, Black-owned businesses in proportion to the total U.S. population than anytime in the last 25 years. Clover wants to celebrate these new business owners and support the ones hard at work to make their established businesses thrive by providing some valuable, practical resources.
Money is a constant challenge for many Black-owned businesses. They still receive significantly less funding and have overall less access to capital than other businesses, which can make starting and sustaining a business difficult. This can often lead to reliance on personal credit and investment for business capital, increasing the stress on the owner.
There is now a range of lending, grant, and scholarship opportunities for minority merchants looking to gain more financial support. Here are some options for Black business owners looking to boost their capital:
It’s hard starting and maintaining a successful business. For many entrepreneurs, having an experienced person who can serve as a sounding board is critical. However, many Black-owned businesses are lacking this connection. Research done in New York showed that founders who were mentored by successful entrepreneurs were three times more likely to become successful than those without help.
Fortunately, this avenue has improved for Black business hopefuls. There are several organizations and groups dedicated to providing a helping hand and proffering some solid advice.
The desire to support Black-owned business has spiked over the past year, as customers want to shop more intentionally, with aiding businesses of color at top of mind. Supporting Black-owned business helps strengthen local economies, create job opportunities, close the racial wealth gap, and celebrate diverse cultures. According to the Black Chamber of Commerce, about 75% of Black-owned small businesses saw increases in customers in the summer of 2020, but those figures haven’t proven to be sustainable.
The other important element comes from the merchant side of the equation. Many would like to insert themselves into the supply chain or ecosystem of Black-owned businesses, but many not know where to start. Here are some places to shop and other ways to help:
Companies across the spectrum can do their part to help smaller businesses. Clover offers its Back2Business program, which helps Black and other minority-owned small businesses get back on their feet and back to business, with grants, mentorship, and other support. Merchants can also help by:
If you’re interested in learning more about Clover’s Back2Business program, connect with a Business Consultant today.
The information provided in this blog is for informational purposes only and should not be construed as legal, financial, or tax advice. Readers should contact their attorneys, financial advisors, or tax professionals to obtain advice with respect to any particular matter.
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