August 1 marked the start of Black Business Month, which is a month dedicated to celebrating, appreciating and supporting Black-owned businesses across the United States.
The month of observance was created in 2004 by entrepreneurs John William Templeton and Frederick E. Jordan who understood the importance of Black-owned businesses to economic growth. Templeton is an author and was the editor of the oldest Black newspaper in America and Jordan is a civil engineer.
Barriers to Success for Black Business Owners
As stated by Templeton and Jordan, Black-owned businesses contribute a lot to overall economic growth in the U.S.
Data from the Census Bureau shows that there were 134,567 Black-owned employer businesses, or businesses with more than one employee, in all sectors of the nation’s economy in 2019, which is an uptick of 8% from 2018.
While Black-owned businesses contribute a lot to the economy, many Black business owners face obstacles to running their businesses. One of those obstacles was the COVID-19 pandemic, which led to a loss of business and closures in some cases because of lockdowns, shorter business hours and a lack of staffing brought on by the COVID-19 pandemic.
A report from the House Small Business Committee shows that the Black business ownership rate fell 41% between February and April 2020, which was the largest rate drop of any racial group.
The report from the House Small Business Committee shows that Black business owners were more likely to be in areas with high areas of COVID cases that had less access to relief. It also shows these businesses had less resources to handle mandated closures.
These pandemic-fueled issues piled on to issues Black business owners were already facing and have faced for years. Historically, there are other systemic barriers Black business owners face such as a lack of access to capital, a lack of business opportunity and fewer relationships with mentors to help them along their business journey.
What Corporations Can Do
There are several ways corporations and larger companies can support Black business owners to help them overcome historic barriers to success and barriers brought on by the pandemic.
For example, financial institutions can implement programs that help Black entrepreneurs get loans for their businesses and other forms of funding.
The largest Black-owned bank in the nation, OneUnited Bank, is doing this through a partnership with Lendistry, a Black-owned financial tech company, to provide $50,000 to $5 million in business loans to help Black business owners build wealth and maintain working capital.
Target (No. 27 on DiversityInc’s 2022 Top 50 Companies for Diversity list) is supporting Black entrepreneurs by working with Black business owners and content creators. At this year’s Essence Festival in New Orleans, Target’s Laysha Ward said during a press conference that by 2025, the big-box giant has a goal of spending $2 billion with Black-owned businesses and suppliers. The company also plans to spend 5% of its annual media budget with Black-owned media. She added that Target has doubled the number of Black-owned brands on its store shelves while increasing company spend with Black-owned brands and suppliers by 50%.
Ward said Target wants to partner with and support Black entrepreneurs to make “a sustainable impact and lasting legacy.”
“After George Floyd’s murder in our own backyard in Minneapolis, we felt like we needed to do more to fuel the economic, social and structural vitality of Black people. The work isn’t always sexy, but it’s important. We’re making progress and we’re taking steps to help Black-owned brands be retail ready so that this creates some intergenerational wealth,” she said.