Black History Month reflects a clear message about entrepreneurship: In a world that tries to restrain your potential and dictate your path, owning a business creates the opportunity for self-determination.
That’s the story of Robert Reed Church, who founded the Solvent Savings Bank and Trust Company in 1906 to help African Americans buy homes and become entrepreneurs. It’s the story of Madam C.J. Walker, who became one of America’s first female self-made millionaires by developing cosmetics and hair care products for Black women. And it’s the story of Oprah Winfrey, who became the first Black female billionaire by leveraging her on-screen talent into a global media empire. With success comes influence, and all three figures have wielded their fortunes to right historical wrongs and lift up their communities.
That legacy continues among the almost 77,000 Hello Alice business owners who identify as Black. There’s Bridgette Baker, who told us that she opened Sunshine Remodeling, her New Orleans-based property company, to “create generational wealth and a legacy” for her daughter. There’s also Darsha Carter, who founded Melanoid Exchange, an e-commerce platform for Black-owned businesses, “to build a community that thrives off of inclusion, equity, and innovative technology.”
Why assume the risk of starting a business? Survey data reveals that the most common reasons Black entrepreneurs set off on their own are “dissatisfaction with corporate America,” “desire to pursue my own passion,” and “ready to be my own boss.” Many of these people are fed up with being the only one in the room, tired of not being paid according to their skills and experience, and exhausted by microaggressions in the workplace. Black firms may receive just 1% of venture capital funding and are twice as likely to be rejected for a loan, yet Black women are among the fastest-growing groups of entrepreneurs in the United States. The urge for self-determination is that powerful.
Study after study suggests that entrepreneurship is one of the best tools we have for closing the racial wealth gap in the United States. Owning a business can help reinvest in a community, provide a path toward homeownership, and address the unmet needs of a market. These ventures’ economic potential is undeniable, with one Center for Global Policy Solutions report estimating that the U.S. economy could gain more than nine million potential jobs and $300 billion in collective national income if Black entrepreneurs received the necessary support.
But the coronavirus now threatens to roll back progress toward that future. Black Americans have been disproportionately impacted by the pandemic, with a staggering 1 in 735 now dead from the virus. And while stay-at-home orders and social distancing guidelines have affected small business owners of all races, just 12% of Black and Latino business owners were approved for CARES Act funding essential to business survival. These compound crises will only accelerate as some estimates project that more than 40% of Black-owned businesses will shutter due to COVID-19, shattering the social and economic fabric generations have worked to create. We cannot allow this to happen.
Throughout Black History Month, Hello Alice will recommit itself to the Black business community. First, we’ll issue a Black-owned business data report that dives into the challenges Black entrepreneurs face and highlights their most pressing needs. We’ll also share our social media and blog platforms to hear the inspiring stories of small business owners making it work against the odds. And we’ll expand on our Black-Owned Business Resource Center hosted in partnership with the NAACP to connect Black owners with mentorship, knowledge, and grant opportunities required to make history themselves.
Not sure where to begin yourself? Darnell Bowen, Hello Alice Controller and State of Black Entrepreneurship panelist, says to reflect on the basics: “A business owner should become comfortable asking and answering challenging questions: Do I understand the market? What elevates my product/service in the market? How do I operate my business most efficiently? By patiently working through these questions, confidence will spread from the business owner and benefit employees and investors.”