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A recent article stated that ‘the future needs more black businesses’. This strong yet simple statement means so much more than encouraging people of colour to be entrepreneurial, it’s about equality, diversity and overcoming a difficult past. Black people in business are doing so many magical things around the world, and we should be reminded of how they are changing stigmas, people’s lives, and history as we know it…
Jannah Handy, right, was one of three business owners taking the stage at AfroTech to discuss the future of Black business. (James Nwobu)
The Future of Black Businesses
Despite there being various challenges, the number of black-owned businesses in the US increased by 400% between 2017 and 2019. Among these businesses, black women form the fastest growing demographic of new businesses. There’s clearly a movement happening, but where is this momentum coming from?
The answer could be found in passion - not just for their business, but for their heritage. These women, and men’s ancestors paved the way to create these opportunities, and many people are now making lives for themselves that their ancestors could have only dreamed of. They feel like they have a responsibility to take hold of these opportunities and run with them, to make the most of everything they have that their predecessors suffered for.
Making Positive Changes
The growth of black-owned businesses is helping to close the wealth gap between other ethnicity groups. This is achieved by strengthening communities and increasing job opportunities. A study suggests that a 10% increase in businesses owned by people of colour could in turn create one million new jobs for people of colour. In majority-black communities, this will also strengthen the local economy, as around 48% of money spent in a local business is recirculated locally.
Black business owners are encouraged to look back and take the time to understand the progress made in black ownership, and the struggles of the past. This can only inspire and instil an understanding of what is achievable today, if so much was achieved with so many barriers in place.
Black-Owned Businesses - The Movement
This whole conversation was sparked when Jannah Handy, owner and founder of BLK MKT Vintage gathered with a panel of peers to talk about black businesses. The Shopify-hosted panel kicked off the first day of AfroTech 2019, which is a four-day gathering of more than 6,000 black entrepreneurs and tech professionals. The convention if aimed at building community and driving conversation, so it seemed fitting that the panel got together to answer the question: why does the future need more black businesses?
The BLK MKT Vintage founders curate artifacts of Black history and provide cultural context for them in the antiques market. (BLK MKT Vintage)
The panellists are successful community role models and founders, and include Gwen Jimmere, founder of Naturalicious, William Adoasi, founder of Vitae London, and moderator Mandela SH Dixon, CEO of Founder Gym. At some point during their careers, they have all overcome some of the many barriers faced by black business owners.
Part of why many of the founders worked so hard to overcome this is to improve representation, as Jannah explains: “When you go into antique stores, you look around and don’t see yourself represented,” she says. “How are we a part of history but we're not represented in the artefacts?”
These entrepreneurs, among many others are changing the face of the future for people of colour, but there are still barriers…
Barriers Faced in Business
While it may look like black-owned businesses are growing and thriving, there are still barriers faced by black entrepreneurs. A lack of representation is still present, which can create fear, uncertainty and reduced confidence in any situation. Because of this, many people are deterred from getting into business, seeing it as ‘well it’s just something that people like me don’t do.’ The entrepreneurs that did find the confidence to set up their own business are brilliant role models, but there’s still a lack of balance in business.
Events such as AfroTech opens doors by creating connections and starting meaningful conversations. The people that attend AfroTech are energized by connecting with other black founders and the people that are leading the way for black-owned businesses. More events like this would help people overcome their uncertainties and introduce them to the connects they need to understand that they can achieve their dreams.
Further barriers include financial challenges. A study carried out in 2017 reported that access to mentorship was limited for people of colour. Those that are unable to access the knowledge, resources and opportunities that they need to succeed are less likely to try and go it alone.
This can be seen when we look at social capital and financial capital - over 80% of venture capital firms don’t have a single investor of colour. This also means that black entrepreneurs need to gain access to predominantly white networks for funding, so there are various barriers at every level.
Of course, there is still a wealth gap between races too, with black ethnicity groups being considered to have a low income. All of this shows a huge disadvantage for black founders and businesses, who are less likely to have family wealth to support their business and get it off the ground in the first place.
Proof of Change
Despite there being clear barriers and difficulties, many black entrepreneurs are setting up and succeeding in business. While many of the founders mentioned in this article have faced challenges as entrepreneurs, they have been able to face up to any issues and overcome these.
The key to making these positive changes is to encourage and spread the news of black-owned businesses. As highlighted earlier a lack of representation is still a problem, and so those in business need to put themselves forward to become role models and show others that anything can be achieved.
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