Black Americans constitute a growing 12.7% of the US population but only 4.3% of the 22.2 million business owners in the country. Times are changing, and the world is fast adjusting to the memo that Black Lives Matter and so do black businesses.
If you’re looking for reasons to support black-owned businesses, you’re at the right place. Here’s why it’s crucial to support black-owned businesses on both corporate and consumer levels.
4 Reasons to Support Black-Owned Business on Both Corporate and Customer levels
- It helps close the racial wealth gap.
In the United States, there is a pronounced wealth gap between blacks and whites, which prevents black people from having access to equal economic opportunities and well-paying jobs. The wealth gap did not just start today but is a product of decades of laws that enforced segregation of black people and restricted their access to schooling, housing, capital, and general discrimination in the labor market.
Statistics show that black households in America earn almost seven times less than white households. Despite this, less than 1% of small black-owned businesses have a median profit above 20%, as opposed to the 40% profit margin of white-owned ones.
Supporting black-owned businesses helps close the racial wealth gap by allowing people of color to earn disposable income, save, invest, own property, and build generational wealth.
- It boosts our economy through job creation.
Another reason to support black-owned businesses is to provide job opportunities for black people. According to the US Bureau of Labor Statistics, the unemployment rate among African Americans on July 22 was 6%. Although this is a decline from years ago, the speed is still very high compared to the 3.2% unemployment rate recorded by white people, 3.9% by Hispanics, and 2.9% by Asian Americans.
Therefore, it is undeniable that people of color are most likely to be unemployed among the major ethnic groups of the American population. The decline of black businesses is also a factor that contributes to the low rates of employment.
According to 2012 US Census data, black-owned companies generated 1 million more jobs than white-owned companies, which generated nearly 56 million. With black-owned businesses growing, there will be more readily available job opportunities for black people without prejudice and unfavorable racial working conditions.
Patronizing Black-owned businesses is a great way to celebrate black heritage and history and invest in a market that caters to the needs of black people. Many black brands sell haircare, skincare, fashion, health, and beauty products created specifically for black people. It is also a great way to ensure the visibility of such brands and business owners.
- It boosts the survival rate of Black-Owned businesses.
Black entrepreneurs face unique challenges born of discriminatory laws and practices in the US that affect their businesses growth and survival. Evidence shows that while 20% of Black Americans reportedly start new businesses yearly, only 4% survive past the start-up phase, as 8 out of 10 Black-owned companies fail within the first 18 months of operation.
Supporting Black-owned businesses on both corporate and consumer levels can assist black entrepreneurs in overcoming some of these challenges and help Black-owned businesses thrive.
- It builds a supportive ecosystem for black entrepreneurs.
One of the most prominent reasons to support black-owned businesses is to keep them (especially Fortune 500 companies) in check and build a system that helps them grow and thrive. This culture ensures appropriate representation of black entrepreneurs in prestigious industries and professions. It also helps to condemn tainted racial practices such as the lack of diversity in organizations like Facebook.
Looking for ways you can support black-owned businesses? Here are some tips:
- Patronize Black-owned businesses.
- Buy products made for black people.
- Hold top companies accountable for their diversity.
- Spread the word on social media.