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Black Entrepreneurs Break Barriers - Despite the Odds
The challenges Black entrepreneurs of different backgrounds face and their triumphs over economic and racial obstacles.
Ebony White & Abigail Golden-Vazquez | a Prosperity Now feature
It’s Black Business Month and despite the progress made in recent years, Black entrepreneurs continue to face significant barriers that can hinder their success. Contrary to common perceptions, there is a lot of diversity within being Black in America. As our society continues to diversify, there are Black Americans that hail from Africa, from Latin America and the Caribbean and of a mix if races and ethnicities, all of which carries additional cultural considerations.
The Impact of Systemic Racism on Black Entrepreneurship
To truly understand the challenges faced by Black entrepreneurs today, we must first examine the historical context in which our businesses operate. For centuries, Black individuals and communities have been subjected to systemic racism and discrimination, which has had a profound impact on their ability to thrive economically. From slavery to Jim Crow laws to redlining, Black entrepreneurs have faced numerous obstacles that have limited their access to resources and opportunities whether they are descendants of slavery or not. Having access to capital is the biggest challenge for Black entrepreneurs. In fact, according to the Federal Reserve, Black entrepreneurs are denied loans at nearly twice the rate of white business owners.
Traditional financial institutions have created systems and underwriting criteria that don’t meet the needs of Black small business owners looking to seed, sustain and grow their business.
One of the most significant challenges that Black entrepreneurs face is the pervasive stereotypes, bias, and discrimination that exists in our society. These negative perceptions can hinder their ability to secure funding, attract customers, have access to markets, and build professional relationships. Black entrepreneurs often must work twice as hard to prove themselves and overcome the preconceived notions that others may have about their abilities and qualifications. At the same time, these stereotypes and bias also exist within communities of color and between individuals of color that adds another layer of navigation for entrepreneurs. For Black entrepreneurs that come from Black majority countries or countries where racism plays out differently, this reality can be a shock and require skills to navigate.
Racial Barriers: Stereotypes, Bias, and Discrimination
The journey of diverse Black individuals to becoming business owners is a unique and inspiring one. These individuals navigate the complexities of their racial identity while also facing the challenges and opportunities that come with entrepreneurship. Their experiences are shaped by both their Blackness and cultural identity, which adds a layer of complexity to their entrepreneurial endeavors.
One aspect of the journey for diverse Black individuals is the exploration and understanding of their racial identity. They often grapple with questions of belonging, as they may not fully identify with or be accepted in the fullness of their racial and ethnic identities.
In addition to the interpersonal aspect, Black entrepreneurs face external cultural challenges and opportunities in the business world. For example, Black Americans born here that are descendent of slaves, Black Americans from Haiti speaking creole or English with a Jamaican accent, Africans coming from Africa, or Afro-Latinos who may speak Spanish or identify culturally as Latino, all experiencing Blackness in America in different ways. They may encounter racial bias and discrimination, which can influence their progress and opportunities. Research on how these systems play out similarly or differently in the way they impact different Black communities would be helpful for those seeking to understand and support them.
The Ecosystem of Support beyond Capital
Overall, the journey of Black individuals of all backgrounds and to becoming business owners is a testament to their strength, resilience, and ability to thrive in the face of adversity. Their experiences shape not only their personal growth but also contribute to a more diverse and inclusive business landscape.
Access to capital is a critical factor in the success of any business, and Black entrepreneurs, regardless of origin often face significant barriers when it comes to securing funding. Studies have shown that Black-owned businesses receive a disproportionately small amount of venture capital and bank loans compared to their white counterparts. This lack of access to capital can make it challenging to start or expand a business, limiting their ability to compete in the marketplace.
Networking and mentorship are essential components of any entrepreneur's journey, but Black entrepreneurs often face additional challenges in this area. Building a strong support system can be difficult when there is a lack of diverse role models and mentors who can provide guidance and support. It is crucial for Black entrepreneurs to actively seek out networking opportunities and connect with others who have faced similar challenges. For example, there is an emerging presence of Afro-Latino entrepreneurs, affirming both their Blackness and Latinidad or “Latino-ness”, who are creating businesses centered around Afro-Latino identity. There is also the Afro-Caribbean Business Network for entrepreneurs who identify as African and Caribbean where they have created a community dedicated to providing resources and wraparound support to build successful businesses. By building strong support systems, they can learn from one another and navigate the business landscape more effectively. Service providers supporting Black entrepreneurs would do well know and understand the nuances and differences among their Black clients and aim to provide or connect them to targeted support systems.
Education and skill development are vital for the success of any entrepreneur, and Black entrepreneurs in all their diversity need access to quality education and training programs that can equip them with the knowledge and skills necessary to thrive in today's business world. Unfortunately, disparities in educational opportunities and resources can limit their ability to acquire the tools they need to succeed. It is essential for policymakers and business leaders to invest in programs that provide Black entrepreneurs with the education and training necessary to overcome these barriers.
Representation matters. Seeing successful Black entrepreneurs can inspire and motivate aspiring entrepreneurs and challenge the stereotypes and biases that exist in our society. It is crucial for Black entrepreneurs to be visible and actively share their stories and experiences. By doing so, they can help break down barriers and inspire the next generation of Black entrepreneurs to pursue their dreams and overcome the cultural obstacles they may face. This can be particularly challenging when the national narrative presents a monolithic representation of Blackness in America, and many of the diverse groups mentioned in this piece do not see themselves in the dominant cultural narratives around business or Blackness.
Supporting Black-owned businesses is not just about economic empowerment; it is about community empowerment. When we support Black-owned businesses, we are investing in the success and prosperity of our communities. By consciously choosing to patronize Black-owned businesses, we can help create a more equitable and inclusive economy that benefits everyone.
Despite the challenges they may face, Blacks of all origins bring a unique perspective to the business world. Their ability to navigate different cultural contexts and understand diverse perspectives can be a valuable asset in today's global marketplace. They have the potential to challenge traditional norms and bring fresh ideas to the table.
The Ongoing Fight for Equality in Entrepreneurship
While progress has been made, the fight for equality in entrepreneurship is far from over. Black entrepreneurs continue to face unique challenges and barriers that can hinder our success. However, by acknowledging and addressing these challenges, we can work towards creating a more equitable and inclusive business environment. It is essential for individuals, communities, and policymakers to come together and support Black entrepreneurs of all kinds, ensuring that everyone has an equal opportunity to succeed. Together, we can break down barriers and create a more inclusive and prosperous future for all.
Despite the challenges and barriers Black entrepreneurs face, there are many inspiring examples of Black entrepreneurs with diverse backgrounds who have overcome adversity and achieved remarkable success. From Kim Etheredge and Wendi Levy Kaaya, Co-owners and Cofounders of Mixed Chicks to Rihanna, an entertainment mogul and owner of the makeup company Fenty Beauty, these success stories serve as a testament to the resilience, determination, and ingenuity of Black entrepreneurs. By highlighting these stories, we can inspire and empower others to pursue their entrepreneurial dreams.
What can you do? You can support Black-owned businesses of all types in your community and help break down barriers to success. By consciously choosing to patronize these businesses, you can make a meaningful impact and contribute to a more equitable economy. Service providers should collect disaggregated data to know and understand the diversity of their Black entrepreneurs and how that may impact what they need to be successful.
For policymakers, business ownership is beneficial to Black households and their communities, but the racial wealth gap and structural racism is a big factor and having state and federal policies in place to mitigate these realities is crucial for all Black entrepreneurs.
For media and influencers, lift up diverse Black stories so that all Black Americans can see themselves in examples of success.
For researchers and data creators, let’s disaggregate different Black origins, cultures and experiences to learn about what is working and what is not and to tailor solutions accordingly.
In a nutshell, Black entrepreneurs have many intersectionalities that influence how they are situated in our society. Having targeted and inclusive strategies also means that one size does not fit all, so we must not make the mistake of assuming that all Black individuals' experience is the same. Nor do they all need the same things.