The role of black entrepreneurship is essential today. It’s a tool for economic development, social progress, and cultural representation. Black entrepreneurs are useful in creating job opportunities, reducing socioeconomic disparities, and promoting innovation within their communities.
Here’s why black entrepreneurship is important and its contribution towards creating a more equitable and inclusive society.
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1. Creates Jobs and Opportunities
Group-of-people-using-laptop-computer. Image Source: Pexels licensed under CC BY 2.0
As an African American, when you start a new business, you create job opportunities for other black folks. Having more entrepreneurs can increase economic growth in the black community and help low earners reach the middle class.
One of the problems the black community faces is that there aren’t enough black-owned businesses to hire unemployed African Americans. So, we believe now is the right time for the black community to pull resources and build reality through entrepreneurship.
2. Closes the Racial Wealth Gap
The racial wealth gap between the white and the African Americans in the US is a painful reality for black communities. It has even affected the country’s economy so well. This racial gap started during the Jim Crow era when black people couldn’t access homeownership opportunities and high-paying jobs.
For instance, even though the Social Security Act of 1935 is seen as one of the first social safety nets in the country, it didn’t cover low wages. It also failed to cover agricultural workers or jobs without payroll information, excessively affecting black people. As of 2020, black families own only 13.4% of the nation’s household wealth, while white families own 84%.
Furthermore, according to a report from the Federal Reserve, one in five African American households has zero or negative net worth.
Entrepreneurship has always been the motor to wealth creation in the city. That’s why black people need to get involved in entrepreneurship. Through entrepreneurship, African Americans can develop credit building, meaningful savings, generational wealth, and property ownership.
Read also: 7 Grants for Black-Owned Businesses You Can Apply for in 2023
3. Entrepreneurship Gives Black Community Social Significance
People who engage in entrepreneurship are regarded as heroes because they make things happen even when there’s a lack of support from the government. Their contributions and efforts are recognized. This is because their passion and lifestyle are changing other black people’s lives.
Through entrepreneurship, you can mentor and develop the people working for you. This makes it easy for them to find meaning in life.
People Also Read: 8 Meaningful Ways You Can Uplift Black-owned Businesses
4. Educate Blacks About Financial Literacy
Entrepreneurship exposes blacks to financial education, an essential skill for managing men and resources and making sound business decisions. As an entrepreneur, you’ll learn about budgeting, investment strategies, and financial analysis.
With such skills, you can analyze market trends and financial data to determine the profitability of new business or investment opportunities.
People Also Read: 7 Black Financial Literacy Podcasts Discussing Smart Money Moves
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5. Foster Resilience Among the Blacks
Being resilient will help you come out strong during trying times. Through entrepreneurship, you can learn resilience.
For instance, you could face a challenge in starting a new business. But you can learn from the challenges and change your approach. By doing so, you’ll turn setbacks into opportunities for growth and success.
6. Entrepreneurship Helps Existing Black Businesses Grow
Entrepreneurs create and influence new products and ideas. They also have an impact on already established enterprises. Engaging in entrepreneurship allows the black community to explore new markets and improve existing marketing tools.
For instance, modernizing the production process and using new and improved technologies to market it can help established businesses use resources more efficiently.
7. Brings Innovation to Black Community
Entrepreneurship involves innovating in an established or new business to generate wealth or increase revenue. This process includes developing new product lines, improving existing ones, and enhancing ideas, markets, and technology.
Basically, the goal of entrepreneurship is to make life easier for both buyers and entrepreneurs. This means by embracing entrepreneurship, blacks will bring innovation to black communities.
8. Build up a Black Community
Establishing a new enterprise helps promote plenty of retail facilities, higher levels of homeownership, fewer slums, and higher expenditure on recreation and education. Enterprises invest in community projects and give financial support to local charities. This encourages further development beyond their ventures. Hence, entrepreneurship leads to more stability and a higher quality of black community life.
How to Encourage Entrepreneurship Among the Blacks
There has been a significant increase in black entrepreneurs in the business world. Recent reports indicate that the US now has 140,918 black-owned businesses, which continues to grow. Despite their growing presence and impact, black entrepreneurs often find it difficult to establish the necessary professional connections for growth and secure funding.
If you’re thinking about when to show your support to black-owned businesses, Black National Business Month is the perfect time. Follow the steps that we have outlined here to encourage and support them.
- Do business with black entrepreneurs: Action speaks volumes more than words. Saying you support black entrepreneurs isn’t enough. You need to partner and buy from them.
- Connect black entrepreneurs with your network: If you don’t require the product or service of a black-owned business, you can still help by referring them to people in your network who might need their services. Making valuable connections and referrals is a guaranteed way to expand a business.
- Studies indicate that 65% of new business for brands comes from referrals. Black entrepreneurs can benefit from referrals from others, which will help them access new markets and expand their businesses.
- Offer mentorship: A report has shown that 92% of small business owners said that mentorship impacted the growth and survival of their businesses, yet not more than 40% of black entrepreneurs had access to mentorship, according to a report.
- Fund their ideas: Many black entrepreneurs have innovative business ideas but face challenges in securing the necessary resources. In fact, only a small percentage of black-owned businesses receive loans they apply for. If your business has connections with organizations offering funding, consider introducing black entrepreneurs in your network or community to them.
Supporting black-owned businesses gives voice to them and encourages inclusivity. When you promote black entrepreneurship, you also encourage economic growth, social justice, equality, and collective prosperity.
People Also Read: What Does it Mean to Buy Black
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