There’s no denying that entrepreneurship has become a popular choice for people who want to make money. However, while entrepreneurship provides a pathway for building wealth, it holds a different fate for black entrepreneurs.
Evidence shows that although Black Americans are no less likely to own businesses than their white counterparts, those businesses do not offer the same returns on investment for both groups. Black entrepreneurs often struggle with systemic barriers to credit, markets, economic and social capital, and debt, which translates to lower revenues and dimmer prospects for the growth and survival of their businesses.
If you’re a black entrepreneur looking for ways to overcome these barriers and ease your entrepreneurial journey, you’ve come to the right place! In this article, you’ll learn essential strategies to mitigate the problems with black businesses’ success and how they can help enhance your business.
Problems with Black Businesses
There are many reasons why black entrepreneurs struggle. Some of the most common problems with black businesses include:
- Lack of business savviness (i.e., a lack of experience and education)
- Limited capital and
- Racism: Stereotypes about African Americans’ education level and credibility
- Lack of business savviness
Business savvy refers to understanding complex business issues. It is the ability to keenly and quickly deal with business situations, seeing the possible threats and opportunities that are likely to succeed in a business. To be business savvy, experience and education in an industry are necessary.
Several black entrepreneurs lack business acumen and make grave mistakes that cause the failure of their businesses. As a black entrepreneur, you must gain education in the industry via mentorship or formal education.
- Limited Capital
Another problem with black businesses is the lack of access to funding. Most black entrepreneurs start their companies as small businesses to raise money for the next growth step. Hence, these entrepreneurs might have trouble getting loans or investments from banks or investors because of the lack of resources compared to their white counterparts. Thus, black entrepreneurs find it challenging to grow their businesses.
- Racism: Stereotypes about African Americans’ education level and credibility
Stereotypes are harmful and are likely to prevent you from pursuing opportunities to further your education or cause you to doubt your abilities because of other people’s opinions of you or your race. According to a Pew Research Centre survey, 95% of black adults suggest that black people face at least some discrimination. Due to racial stereotypes, black entrepreneurs are regarded as uneducated and lacking the credibility to build a successful business.
Strategies to help Black Entrepreneurs Enhance their Businesses
- Mentorship
The best method to gain a business advantage is to be mentored by someone who has achieved success in a related field. Find an entrepreneur who shares your aims and history to learn from them as a black businessperson.
- Branding
Establishing a professional brand for your company that differentiates you from other service providers in the marketplace is essential to designing a fully functional website that highlights your services and portfolio alongside identical business stationery (cards, stickers, etc.).
- Social media
Having a presence on social media is another good way to promote your business and reach more potential clients. It’s crucial to develop a strategy for each platform (e.g., Facebook, Twitter, and LinkedIn) to consistently post engaging content that draws the attention of people who may not be aware of your company yet.
- Email marketing
Email marketing is a great way to reach out to potential clients and remind them of your services. You can collect emails via your website and social media links or ask your customers to write their email addresses on a signup form. It’s important to send relevant, valuable, and exciting emails to ensure your customers don’t unsubscribe from your list.
- Direct mail
Some people may be skeptical of direct mail, but it’s still a popular way to promote your business. You can send postcards or brochures to potential clients in their mailboxes to learn more about your offer.
- Networking
Getting out there and meeting new people is another way to promote your business. You can attend industry events; join a local Chamber of Commerce, and network with other professionals who work in the same field as you do.
Conclusion
The main lesson from this is that entrepreneurs of color may launch successful enterprises using a variety of tactics, including personal networks, training in cultural sensitivity, and mentorship programs. The most crucial thing is to have a clear vision for how your company will develop and what resources it will need to succeed.
