State of Black Entrepreneurs
Bank of America just unveiled its 2021 Black Business Owner Spotlight, an inaugural report “exploring the goals, challenges, and everyday realities of Black small business owners across the country.”
Overall, Black business owners were optimistic. Over the next 12 months:
- 48% expect their revenues to increase
- 44% say their local economies will improve
- 43% think the national economy will improve
- 22% plan to hire
Of course, since we’re still in the midst of a global pandemic, the Black entrepreneurs surveyed had some concerns. They’re worried about:
- The impact of coronavirus—78%
- The political environment—71%
- Healthcare costs—67%
- Consumer spending—67%
- The strength of the U.S. dollar—62%
- Corporate tax rates—62%
Specifically, 67% think consumers will be less likely to shop at brick-and-mortar stores. But 80% believe consumers “will have a greater appreciation for small business” and will “return to being the backbone of the U.S. economy” when the nation recovers from the pandemic.
The Black business owners in the survey were active participants in the Year of the Pivot. Nearly half (48%) retooled their operations to deal with COVID-19, double that of the national average. Of those, 55% donated time, products, and services, and 53% developed new products or services.
Lessons were learned as the Black business owners survived the pandemic—68% think small businesses will be better prepared if the coronavirus reemerges.
Historical Challenges and a Brighter Future
It’s no secret that Black business owners have had to work harder to achieve success (82% of those surveyed noted this), and 62% are satisfied with the size and success of their businesses. But 56% say accessing capital has been a challenge that’s limited their business growth.
Black business owners see positive change coming in the next 10 years with more people of color in executive and C-suites (71%), in STEM fields (68%), and as business owners (67%).
If you’re in the throes of starting a small business, I talked to three Black entrepreneurs who shared their perspectives and advice.
Charley Moore, CEO and Founder, Rocket Lawyer
Remain focused on the problem you are solving for your customers: Give your customers the best customer experience and service, and they’ll reward you with business success and growth. Apply your unique, lived experience to empathize with customers and exceed their expectations.
Incorporate your business: Create a separate legal entity for your business to take advantage of possible tax benefits and to protect your personal assets in the event of a lawsuit.
Protect your intellectual property: Register your trademarks, copyrights, and patents to secure your rights to your business name, logo, and any works and inventions that are key to the success of your enterprise. Use confidentiality agreements to protect the secrecy of any product or service information that you need to reveal.
Be an informed employer: As a person of color, you likely know firsthand the workplace challenges that many people face because of their status. Apply your experience to creating an inclusive workplace with clear policies and open lines of communication. Know your legal obligations as an employer. Understand how to classify workers and use non-disclosure and employment contracts with all workers. Use employee handbooks to establish workplace policies.
Cover yourself for the unexpected: Line up the right type and amount of insurance to protect your business from unexpected disruptions and liabilities.
Read before you sign and keep good counsel: Read and make sure you fully understand every contract you plan to sign before signing. Seek out legal advice and assistance from lawyers to avoid costly mistakes.
Ramon Ray, Founder, Smart Hustle
As “minority” entrepreneurs, we are categorized by society for various good and, perhaps, some not-so-good reasons. However, you should present yourself as simply a great businessperson. Or “the best solution for a particular customer.” Over the years, I’ve never led with “Hi, I’m a black business owner—hire me.” Just lead with how you are the best business owner.
Understand you are a “minority” and embrace it. I’ve felt marginalized many times. At an event a few years ago, I was given the keys to a car to park by one of the attendees who thought I was a parking attendant and didn’t know I was the keynote speaker. I didn’t get “twisted up” or “angry” about this. I understood his misguided behavior and moved on. I talked about this in The New York Times.
We have to “be better” than others at times. Many of my good friends and mentors are white guys. When they walk into a room full of strangers, the people there look at them with no judgment or in a positive light. I know that sometimes because I’m a black guy, they will judge me negatively. Not because they’re “bad people” per se, but because of their own implicit biases. Hence, I always dress as sharp as I can and slightly above what the occasion calls for.
Karen Swim, President, Solo PR Pro and President and CEO Words For Hire
Don’t be penny wise and pound foolish. Many entrepreneurs focus so intensely on preserving capital they fail to spend on activities that can grow their bottom lines. This can also manifest in a DIY mentality that can diminish what you are trying to accomplish. Invest in the people and activities that can deliver an ROI, and you will actually grow your bottom line.
Don’t romanticize your business. You invest so much of yourself in starting a business that it can be easy to lose your objectivity. You may think your business is smarter, faster, better than the competition (and it may be true), but you have to prove that in bottom-line numbers. As an entrepreneur, you have to strike a balance between holding fast to your vision and being open to valid criticism. Always look at what you are doing through the eyes of the end-user. Criticism can be hard to hear but can also help you miss blind spots.