Black entrepreneurs may struggle with challenges that are both common to small-business owners—access to capital and contracts, finding reliable employees—and unique, due to racial and socioeconomic barriers. And while more than 2.5 million businesses are owned and operated by African-Americans, according to the Census’ most recent survey of business owners, only 109,137 (or 4 percent) had paid employees—a data point that highlights just how many black entrepreneurs are trying to run a business entirely by themselves. (For comparison, there are 21.5 million businesses owned by white entrepreneurs, and 4.4 million—20 percent—have paid employees.)
But the small-business owners we spoke to aren’t defined by those barriers. “There are more new and existing black businesses making more,” says Robert Smith of RSA Public Relations. “Yes, racism and prejudice still exists when it comes to funding, customer acquisition, etc., but you can’t let that stop you.”
There are numbers to back Smith up—black women are among the fastest growing group of entrepreneurs, and the revenue the largest black-owned businesses are pulling in has grown rapidly over the years. We spoke to several black small-business owners to learn about their hopes and concerns for their businesses, as well as their thoughts on the state of black entrepreneurship in 2016.
“The current social climate in America is a double-edge sword for minority business owners. Because the conversation about race is so prevalent, I feel like black entrepreneurs are no longer invisible. However, [we] still have to be twice as good as our non-black counterparts, especially when it comes to business. The greatest tool I have in my arsenal when competing with my non-black counterparts is preparation. I spend copious amounts of time researching the market and looking at an opportunity from various angles, so when I walk in the room, I’m confident about the needs of the client and what I can offer. As a black business woman, I have to be excellent in everything I do. Mediocrity is acceptable for non-minority entrepreneurs, and clients tend to be more patient with them, but with minorities—black minorities especially—every element is hyper-scrutinized, so I have to make sure every single element of my business is amazing.”—Misty Starks of Misty Blue Media
Growing a Team
“My concerns are black small-business owners in 2016 will still not build [a] solid team and work with skilled professionals. I think that the mentality of the black business owner is the DIY—Do It Yourself—attitude, because that’s how we have to do everything else. My other concern is that black small-business owners are not properly marketing their products or services, and they don’t put as much effort into the marketing and branding of their businesses when it comes to websites, product development or marketing advice.”—Dennis Buchanan, founder and president of OneRecourse.com
Access to Resources and Networks
“Black entrepreneurship is just as hard now as it has been in the past. The African-American owned businesses that we [and our partner organization, the National Minority Supplier Diversity Council] work with say their number-one hardship is getting access to capital. We have several businesses who are trying to work with the … Fortune 500 companies of the world, but without the right access to capital, it is hard to compete for those large contracts. We encourage minority-owned businesses who are facing challenges with capital to partner with other small businesses and compete together.”—Sky Kelley, founder and CEO of Avisare
“As a black woman [and] small-business owner, my concerns are that other black business owners continue to have direct access to opportunities, as well as access to tools, resources and funding needed to ensure their businesses can thrive. It is also my hope that black business owners continue to have the courage to pursue the ideas they’re passionate about, while understanding that they will need the endurance to be in it for the long haul. Sometimes our fears hold us back, and you have to move past that. It’s important for small-business owners to build a strong network of connections and identify business mentors/teachers that will provide them with the knowledge and understanding of how to operate a profitable business.
“These concerns are extremely important to me, and they’re a big reason why I founded my own conference, The Dream Project Symposium. At the Symposium, I’m able to connect to a multicultural audience comprised of business professionals and aspiring entrepreneurs. My own passion involves providing these individuals with a space where they can connect with thought leaders and corporate brands that would benefit their entrepreneurship. Being in a room full of CEOs, entrepreneurs and executives can be inspiring in itself, and I always find it helpful to hear other people’s success stories. You never know what takeaways or connections you might get from attending a great conference!”—Teneshia Jackson Warner, CEO and founder of Egami Group
“Opening a business is easier than ever, but scaling and building a sustainable business is difficult. We acknowledge that it takes a village to make sure that black business owners are well-supported and also highly engaged in their entrepreneurial ecosystems. Through the Blue Hills Contractor Incubator, the only construction-specific business incubator in the country, we intentionally strive to recruit a diverse mix of businesses to prove the existence, productivity and beauty of a multicultural business community. I see that our black business owners are hopeful that they will be able to meet their annual revenue forecasts and are seeking technologies to increase their efficiency. My concern is that although the amount of contracting opportunities in the construction industry are increasing, I still see black business owners slow or unable to scale due to inadequate gap financing opportunities and a shrinking pool of qualified skilled tradespeople.”—Adrienne B. Haynes, founder of SEED Law and SEED Collective, and director of Blue Hills Contractor Incubator
“Being a black small-business owner comes with many odds, and I have the additional challenge of being deaf. The good news is that for us, beating all odds is something we are good at! If there’s a problem, we’ll find a way to get around it. As a small-business owner, growth is our number-one priority. We were initially able to fund our growth and inventory through special events: BBQ competitions, food shows, craft fairs and craft brew festivals. By doing this, we proved that we know how to run a business, turn a profit and, better yet, gain repeat customers. Competition for black-owned small business has not gotten easier. But for us, the road has become smoother than most, because we are good at selling and marketing our product, using social media and events as a driving tool for commercialization. We have continued to double our growth every six months.”—Rasool Raheem, founder and owner of Deaf Man’s BBQ
“As a black small-business owner, I firmly believe that the outlook is positive in regard to growth potential. I’ve noticed a sense of collaboration amongst other black business owners and a desire to explore mutually beneficial partnerships coming from non-black business owners that I haven’t seen in the past. There are some programs in place designed to make doing business on an equal playing field a reality for black business owners. These initiatives have positioned some minority enterprises for success, but at the end of the day, it comes down to our ability to network, partner and deliver. This is why it is extremely important for us as black business owners to constantly operate at or above the technology and knowledge curves. We must also remain constantly in search of ways to support and collaborate with one another to move the needle forward.
My diversity recruiting firm is coming off of its best year ever. A large part of that success is rooted in our efforts to seek out opportunities to support and learn from other small-business owners. We’ve created some excellent partnerships that have supported our desire to grow in both scope of services and geographical reach. These partnerships have allowed us to be proactive in our efforts to build a team of professionals that can compete with the larger firms in our sector and win a fair share of the contracts. We’ve gone from operating primarily in the metro Philly and NYC tri-state areas, to conducting global search assignments. This is a great time to be a black small-business owner!”—Kenneth L. Johnson, president of East Coast Executives.
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