Updated: Sep 14, 2022
Despite the narrative that there is a growing number of support for black entrepreneurs, it’s important to understand that during the start-up “ideation” stage many Black business owners continue to face economic, market, sociocultural, and institutional barriers, which are all linked to discrimination.
The pandemic, heightened social injustices and structural bias are bringing greater challenges for entrepreneurs to access finance, expertise and support.
Exposing the Disparity
Black entrepreneurs tend to make decisions in the 'ideation' stage which is likely to keep their businesses small and operating in less lucrative sectors.
The focus of support for the start-up and sustainability phases of entrepreneurship should be on ensuring survival and increasing its long-term profitability.
They continue to struggle to secure capital and access to credit for their business.
Combined with a lack of informal connections to venture-capital networks this continues to isolate Black entrepreneurs from potential sources of support and reduce their long-term debt.
Not many can depend on family and friends to contribute to raising capital.
Accessing Expertise and Services
Although professional and business services are available, many Black entrepreneurs who would benefit most from legal and financial advisory services, are less likely to use them citing expense, inaccessibility and mistrust.
This does not help when Black entrepreneurs are more likely to be excluded from receiving information about high-potential opportunities via their networks.
On the other hand, many would like to connect with a variety of business professionals and mentors that can help support and promote their businesses.
Research continues to affirm that founders who are mentored by top-performing entrepreneurs are more likely to become top performers themselves. Due to this disconnection, the outlook is dimmer prospects for business growth and continues to widen the racial wealth gap.
Developing Business Capabilities and Facilitating Knowledge Sharing
Another area that Black business owners need to focus on is reskilling and upskilling if they are going to overcome market barriers, remain relevant and more importantly sustainable.
Don’t get it twisted, there are lots of information and resources available but Black-owned businesses still need targeted support.
Where possible our “only one” Black senior professional can identify networking, mentorship and sponsorship programmes that can help Black entrepreneurs overcome some sociocultural barriers.
It’s worth participating in community programmes which help entrepreneurs connect with role models and commercial networks that can help prospective entrepreneurs pursue business ownership with more confidence and support. But it’s not all doom and gloom.
The call is for building greater digital capabilities and sharing business knowledge within our communities has never been more important irrespective of size.
It’s not enough to hide behind COVID-19 or Brexit, you have a responsibility to protect, strengthen and build business networks that help to aspire and existing businesses to diversify and identify new market opportunities.