The State of Black Entrepreneurship: ‘We don’t get what we need, yet we still find a way forward.’

As we come to the end of Black Business Month, we talked with three business leaders who gave us deep insight into the state of Black entrepreneurship across the country. They discussed how business owners are faring after 41% of Black businesses were lost in the beginning of the COVID-19 pandemic, what makes them optimistic for the future, and what gives them pause – as well as ways communities and policymakers can strive for greater equity and inclusion in the entrepreneurial ecosystem. Those leaders are:

• Ron Busby, Sr., president, and CEO of the U.S. Black Chambers, Inc.
• Katie Gailes, senior director of membership and DEI+B at the National Association for Community College Entrepreneurship
• Dr. Fallon Wilson, co-founder and principal investigator of the #BlackTechFutures Research Institute

What makes you feel hopeful about the state of Black entrepreneurship right now?

Ron Busby, Sr.: The fastest-growing business segment in the country, in reference to new openings, is Black women. And there’s a good news/bad news story there – the good news is that women are taking their future into their own hands. But the bad news is that many of them were forced into becoming entrepreneurs in the first place. But this is a case where tragedy turns into triumph, creating opportunity. And so now, we’re growing new businesses.

Katie Gailes: I’m optimistic because Black people, especially Black women, continue to start businesses at a very high rate in the face of systemic racism built into our culture. That initiative led to the formation of the Historically Black Colleges & Universities (HBCUs), Black churches, Black sororities and fraternities, and all the cottage businesses that people started in their communities before we had the word “entrepreneurship.” And the local dry cleaners and daycare center, and coffee shop are part of the community – they hire their friends, relatives and neighbors. So, I think we’re in the era of the entrepreneurial ecosystem builder. And I find it very encouraging because if you think about it, that’s what grew this country in the first place.

Dr. Fallon Wilson: What gives me hope is the resiliency of Black business owners – we don’t get what we need, yet we still find a way forward. And, of course, I’m excited about the increase in the number of business owners this year and the increase for Black women business owners – this is very important. I’m also excited about the number of micro-businesses that we’re launching online, understanding that there’s a need to have both online and offline businesses so that we can thrive in a digital economy. So that gives me hope.

What makes you pause regarding the state of Black-owned businesses?

Ron Busby, Sr.: We need to see more accountability. Over the last year, corporate America said they would give $6.6 billion to Black businesses and/or nonprofit organizations. We haven’t been able to trace more than a few hundred million of that … It wasn’t impactful. They can say, “We’ll deposit $10 million in a Black-owned bank,” but that’s still their money. They can pull it out at any time – it’s not like they’re giving the bank money. Banks don’t make money when you make a deposit; banks make money when you make a loan. So, when corporate America, the federal government, and sports teams said, “We’re going to do right by depositing $10 million in this Black-owned bank,” that didn’t help our communities. So, without some real accountability and intentionality, many of these programs are just good thoughts and good intentions, with no accurate measurements or metrics to follow up.

Katie Gailes: I’m seeing a lot of great intentions, and we see some excellent movement – there are many chief diversity officers out there and a lot of money that’s intended to be funneled into Black businesses. But with that sometimes comes arrogance – I call it the colonial mindset. The thinking is, “We’re going to come into your community. We’re going save you because we know what’s better for you. We’re going come in and fix everything.” And that mindset can cause things to be a dismal failure.

Dr. Fallon Wilson: I am deeply concerned, as many people, about inflation and supply chain issues. When a large-scale business has a hiccup in its supply chain, they can divert resources; they have flexible capital, and it can move things around. But that is not the case for communities of color, who often rely on outsourced materials but don’t have the relationships within a global ecosystem to work around the supply chain issues we’re having. We don’t have the additional capital to stretch the penny any further than the penny can be extended.

What can our communities do to be more inclusive and supportive of Black-owned businesses? 

Ron Busby Sr.: People shop where they feel most comfortable. So, you’ve got to make the environments more comfortable and inviting for people. I grew up in Oakland, and we had a main street called East 14^th Street. On Saturday mornings, you could go and find all the Black stores. So, I returned to Oakland 30 years later, and that street was now more international. It had lost some of the appeals for Black people, but there was a Vietnamese section, a Chinese section, and a Latino section, and it made it more comfortable for the entire city to participate. So, yes, we lost some of our cultures, but I think we gained the influence of the community as a whole. There’s a way you can bring people together – you have to make it very comfortable for all businesses and residents.

Katie Gailes: I think small businesses can truly make a difference. If entrepreneurs reach out in their community, they can make a conscious effort to hire and serve people who don’t necessarily look like them. And I’m talking about any business. If you reach out and decide that you’re going to hire people from your community who don’t want them all to look like you, then you can make a difference. Because essentially, diversity is, “I look around the room and the people here don’t all look like me.”

Dr. Fallon Wilson: There are so many Black businesses online – a simple Google search will find you apparel, an amazing furniture company out of Harlem, and so much more. And if you put in Black History Month and business, many businesses will come up. We’re no longer virtually unseen if you want to find us. And if you want to shop locally, identify your Black chamber of commerce, and they would know where most of the offline mom-and-pop storefronts are within your city.

How can policies better support a more equitable entrepreneurial ecosystem?

Ron Busby Sr.: We were very pleased when President Biden went to Tulsa, Oklahoma, in 2020 and talked about the federal government’s spending with Black firms. For the first time, we disaggregated the numbers, which turned out to be 1.67%. So, all these years, we’ve been voting, we’ve been paying taxes, and we’ve been advocating for good programs. And then you find out that you’re only getting less than 2% of the federal government spending, and the federal government is the largest procurer in the country. That’s why I’m saying you can’t be about just minority programs if you’re talking about moving an economic plan for Black people. There’s got to be intentionality, there’s got to be transparency, and there’s got to be accountability.

Katie Gailes: Policy happens at many levels, so policymakers must know their area and look out for the big picture. If I’m a doctor and you have a sore toe, I could come in and look at your toe and say, “Oh, you have an ingrown toenail. That’s the only problem.” But if I don’t look to find out that you have diabetes, then I’m missing the real issue. Sometimes, it seems our policymakers are looking myopically at one thing and not seeing the ripple effect, and that’s why some of their policies go wrong. They need to look at policies that could help small business owners, especially solo entrepreneurs, to save, invest, and give themselves benefits.

Dr. Fallon Wilson: It’s always an issue of public policy underlining all of this work. We all know that the payroll protection program was a great idea, but it did not work well for communities of color because of the implicit biases that they had to go through. But we all agree that non-diluting capital (any capital a business owner receives that doesn’t require them to give up equity or ownership) is super important. Grants go a long way to supporting communities of color and helping them grow their own businesses – it gives them the flexibility to innovate on what they currently are doing or dig themselves out of a hole.

Plus, policymakers need to listen. A while ago, the Small Business Association (SBA) and the Congressional Black Caucus hosted a listening session with Black entrepreneurship support organizations, which was amazing because we could all share our concerns and what we needed. I think part of good policy making – on the top end and also on the back end – is being able to ensure that before Congress passes a bill, they run the traps, as we would say, of inclusive entrepreneurship organizations across the country to get feedback on what they’re hoping to do.