Large corporations have a history of putting down other businesses, particularly small businesses and placing a burden on low-income communities. There have been cases of these corporations causing adverse effects in a community, negatively affecting the typical mom-and-pop shops. However, diversity can help fuel economic vitality, promote productivity and uplift communities. No community has been more disenfranchised than the Black community. So here are 6 reasons to support Black-owned businesses. 

Increases The Number of Black-owned Businesses With Employees When you examine US business ownership, it is imperative to distinguish between businesses that have employees and those that are without employees. Using this prism, you discover that there is a significant disparity in how white and Black business ownership is delineated in the aforementioned categories. Within the total number of business owners in the US, Black men are only a quarter as likely as white men to have employees in their business. Black women are only one-fifth as likely to have employees in their business as white women. Why is this distinction important? 

A strong indicator of a business revenue is if it has employees. The key to raising the number of Black-owned business employers is to support them with our money. Choosing to support Black-owned businesses can help contribute to business growth, which in turn increases the number of Black-owned businesses with employees. 

Keeps Other Businesses Accountable 

There have been various cases of businesses releasing products that are derogatory to African Americans. There have also been cases where intentionally derogatory products have been released for such marketing. The most popular recent case has to be the extremely offensive sweater design by Gucci, which seemingly resembled Blackface. Taken in isolation, it seems that this was a case of terrible decision-making across the board from the design to the marketing department at Gucci. However, this isn’t an isolated incident. 

Quite a number of companies offer support to minorities and the diverse culture they hold, but also keep systems and policies that perpetuate injustice intact. This seems like performative solidarity. The problem is widespread from Facebook’s lack of hiring diversity and Starbuck’s removal incident to H&M’s disastrous marketing. Every one of these cases shows that Blacks overwhelmingly bear the brunt of corporate and systemic discrimination. 

Choosing to support a Black-owned business over these problematic ones means that you voice your opinions using your money. By divesting from these types of companies, you hold them accountable. You also empower successful Black-owned companies to apply equitable policies. 

Serves Communities and Celebrates Black Culture 

Quite a number of Black entrepreneurs get into business inspired by the wealth that is Black culture. A few examples of this are Black-owned hair care, makeup products and clothing stores. There is something about creating a service or product that doesn’t exploit your people but celebrates them. Certain Black-owned businesses have been created to provide access to specific services that meet the community’s needs.

These types of business ventures help uplift the community, fostering a sense of pride that all residents in the community feel. Supporting Black-owned businesses means that you get products that have been created with you in mind, products that are valuable and have a unique character to them. Additionally, you avoid putting money into organisations that might not celebrate Black culture or worse, look to exploit it. 

Fosters Job Creation 

Quite a number of Black business owners fund their businesses themselves as a result of a lack of access to capital. What this means is that the majority of Black-owned businesses are sole proprietorships that can’t make sufficient money to pay for additional overhead. The 2012 US census data highlighted that Black-owned businesses created 1 million jobs. This is in comparison to the 56 million jobs created by white-owned businesses. 

The African Americans unemployment rate in 2018 fell to 6.6%, which was actually double that of white Americans. It is also the highest among other minority groups. Considering that Black-owned businesses are more likely to hire from their local community, choosing to support them can help create the job opportunities people require to attain financial stability. 

Local Economies Are Strengthened 

When local businesses flourish, their communities do as well. However, banks typically hinder that prosperity by discriminating against African Americans looking for small business loans. A 2017 National Community Reinvestment Coalition study found that banks were 2 times as likely to give business loans to Caucasian applicants than Black ones. They were also 3 times more likely to schedule follow-up meetings with Caucasian applicants over more qualified Black ones. 

Consumer spending accounts for about 70% of the US economy, so imagine what directing a portion of that spending power to Black-owned businesses all over the country could do. 48% of small business purchases are generally recirculated locally. This is high compared to just 14% of what chain stores circulate. Choosing to support Black-owned businesses means supporting employees, families, and other businesses. It also helps attract investors to the community as they provide loans, banking services and promote financial literacy, all factors in building economic strength. 

Close the racial wealth gap 

The racial wealth gap that exists today has origins that can be traced down to the practice of the Jim Crow era. Policies such as job discrimination and redlining segregated African Americans from homeownership opportunities and higher-paying jobs that could have promoted wealth building. This was further exacerbated by the Social Security Act of 1935 which didn’t expand coverage to agricultural and domestic workers, many of whom were African Americans. Its requirements for payroll and information and residency also excluded a large portion of Blacks working menial, off-the-record jobs. 

These policies have resulted in the median wealth for white families being around 12 times that of Black families. 1 in 4 Black households have negative or zero net worth compared to less than 1 in 10 white families without wealth. This is even more concerning when you find out that the average wealth for Black families is projected to fall to zero by 2053. 

Entrepreneurs and small businesses have long been wealth builders in the Black community. By choosing to support more Black-owned businesses, you can create increased opportunities for generational wealth, credit building, property ownership and meaningful savings.