By Bria Overs,
Word in Black <\/p>\n

There\u2019s an underappreciated power in Black businesses. A power that goes beyond their ability to boost the United States economy. From cultural-changing fashion brands to construction companies to hair salons, Black-owned businesses have a profound impact on the Black community.\u00a0<\/p>\n

The heart of that impact? The ability to generate prosperity that could help close the racial wealth gap.<\/p>\n

And Black-women business owners are leading the charge, increasing their numbers to 52,374 businesses in just three years, according to a report from the Brookings Institute.<\/p>\n

This boost is despite a lack of access to capital, expensive student loan debt, the COVID-19 pandemic and historical traumas around Black business ownership.<\/p>\n

Most Black-owned businesses are solo endeavors and are 12.7 percent of all non-employer companies, $83.6 billion in revenue. Zooming in, the Pew Research Center found that men owned 55 percent of Black businesses, while Black women owned 37 percent, and 8 percent had equal male-female ownership.<\/p>\n

\u201cWe know that Black people aren\u2019t lower in their entrepreneurial spirit,\u201d Andre Perry, senior fellow at Brookings Metro and a co-author of the report, said. \u201cWe have people who want to start businesses, but they\u2019re certainly not capitalized or incentivized to do so.\u201d<\/p>\n

While the entrepreneurial spirit is alive in Black communities, only 3 percent of those owned by Black women maturate or last beyond five years. But Black folks need these businesses to survive and thrive.<\/p>\n

If growth stays at its current rate and significant gaps in established businesses persist, reaching equality with the number of Black people will take about 256 years. Brookings\u2019s report claims this will leave the racial wealth gap entrenched.<\/p>\n

For example, in Atlanta there are about 8,663 Black businesses, accounting for 7.4 percent of employer businesses. If Black businesses accounted for 36.3 percent of companies with employees, which is equivalent to the Black population, there would be 57,796 more Black businesses for a total of 66,459.<\/p>\n

\u201cThe goal of our report is not just to point to the economic benefits of business ownership,\u201d Perry said. \u201cIt\u2019s about self-determination, agency, and community development, not just building more capitalists. It\u2019s to give agency to people who were historically denied opportunities.\u201d<\/p>\n

State of the Black women-owned businesses<\/strong><\/p>\n

The COVID-19 pandemic, and the murder of George Floyd within that, certainly affected Black business owners. This chain of events caused an unexpected boom in business says Nikki Porcher, founder of the non-profit Buy From A Black Woman. Though significant support flowed in, Black business owners say it didn\u2019t last.<\/p>\n

\u201cBecause there was such an influx in the last part of [<\/code>2020]<\/code>, they were starting to prepare thinking that would be the norm and now it\u2019s dwindling,\u201d said Porcher. \u201cThe people who were excited to buy Black and support Black women and businesses are now getting ally fatigue.\u201d<\/p>\n

With a shift like this, it\u2019s difficult for their companies to maintain operations and achieve goals. And that\u2019s necessary, if Black businesses are to have the kind of impact on their families and communities that they hope to have.<\/p>\n

The Brookings report found that in 2020, Black business owners employed 1.3 million people, created 48,549 new jobs and added $1.7 billion in aggregate payroll to the economy.<\/p>\n

Going from being a solopreneur to an official business that can afford employees is a wall to get over for Black businesses\u2013 especially for Black women.<\/p>\n

Black women and their companies account for slightly less than 1 percent of all American employer businesses, bringing in 0.3 percent of overall revenue in the U.S., according to Brookings. This means there aren\u2019t enough Black women offering employment opportunities.<\/p>\n

Part of the problem is most of these companies are stuck in certain revenue brackets. The largest share of Black women\u2019s businesses have mid-level revenues between $100,000 and $250,000 per year. Less than 15 percent make more than $1 million each year.<\/p>\n

The report also found that Black women are \u201cover-represented in the lowest earning categories\u201d of $50,000 or less annually.<\/p>\n

Porcher said the rapid change in revenue and transactions over the years is a new challenge for founders and owners.<\/p>\n

Pushing Black women further<\/strong><\/p>\n

Black women do and continue to face a lot of adversity on their path to reaching entrepreneurial goals. High-interest rates, inflation, and the restarting of student loan payments will affect owners and consumers alike.<\/p>\n

\u201cAnything which is constraining the wealth, or creating additional debt is going to have a negative outcome on those individuals, households, and communities they\u2019re part of, which includes all of those businesses,\u201d Manann Donoghoe, senior research associate at Brookings Metro and fellow report co-author, said.<\/p>\n

Porcher said there are still easy ways to support these businesses and their founders, including swapping out everyday items to Black-owned or supporting organizations that help these companies.<\/p>\n

For owners and founders, she said, consider starting businesses with unique ideas and customers. Because while there might be room at the table, it\u2019s also beneficial to uplift existing companies and firms.<\/p>\n

\u201cWhenever you see one Black woman, you\u2019re not just seeing ,\u201d Porcher said. \u201cShe has a whole community that she\u2019s standing in for, standing up for, and standing with. It doesn\u2019t just stop with her.\u201d<\/p>\n

This article was originally published by Word In Black.<\/em><\/p>\n