You wouldn’t think that buying from a Black-owned business would have an effect on anything. That is likely because many of us have grown accustomed to shopping from bigger corporations, which usually consider customers as statistics rather than people. But shopping from a Black-owned business can do so much more for you and its owner than it seems.
“Some people don’t consider it a successful business unless the business has created 500 jobs, but that’s just not the metric of success for everyone.”
Many Black-owned businesses are small businesses, too. It’s generally smart to shop small – it supports the economy on a more local level and it helps individual people instead of large corporations. Products from small businesses also tend to have more personal flair to them.
Today, the median wealth for white families is about 12 times that for Black families, and one in four black households have zero or negative net worth compared to less than one in ten white families without wealth. Even more concerning is that by 2053, the median wealth for Black families is projected to fall to zero.
Small businesses and entrepreneurs have been longtime wealth builders in our society. Supporting more Black-owned businesses, can create more opportunities for meaningful savings, property ownership, credit building and generational wealth.
In other words, making a point to support Black-owned businesses today can help close the racial wealth gap now, and 200 years from now.
When small businesses flourish, so do their communities. But banks often hinder that prosperity by discriminating against African American and other entrepreneurs of color seeking small business loans. A 2017 study by the National Community Reinvestment Coalition actually found that banks were twice as likely to provide business loans to white applicants than Black ones and three times as likely to have follow-up meetings with white applicants than more qualified Black ones.
If consumer spending accounts for 70 percent of the entire US economy, imagine what directing some of that spending power to Black-owned businesses across the country can do. 48 percent of small business purchases are recirculated locally compared to only 14 percent of what’s circulated by chain stores. Supporting Black-owned businesses in turn supports families, employees, and other business owners, as well as attracts community investors who provide banking services, loans, and promote financial literacy--all things that build economic strength.
When black-owned businesses are in high demand, the companies are more profitable. Showing your support helps contribute to creating entrepreneurial opportunities. Black entrepreneurship can fuel the black community's economic prosperity and serve as a bridge where low-income families can move up to middle-class status. The Black to Business article stated, “The problem is that there aren’t enough black-owned businesses to hire unemployed black people. Time is overdue for change, and we must pool our resources and build our own reality.”
Many African American business owners fund their own businesses due to the lack of capital mentioned earlier. This means that most Black-owned businesses are sole proprietorships that don’t make enough money to pay employees. 2012 US census data showed that Black-owned businesses created 1 million jobs compared to white-owned businesses which created almost 56 million.
In 2018, the unemployment rate for African Americans fell to 6.6 percent, which was almost double that for white Americans and higher for other minority groups. Since Black-owned small businesses are likely to hire from the local community, supporting them can foster the job opportunities people need to achieve financial stability.
Many Black entrepreneurs start businesses inspired by the richness of African American culture itself--Black-owned clothing stores, hair care and make-up products, and children’s toys are just a few examples. And some Black-owned businesses are created to bring access to services specific to the community’s needs.
These kinds of business ventures uplift communities, fostering a sense of pride in the people that live there. When you support Black-owned businesses, you get products that are valuable for the unique character they bring.
There’s a common saying, “It takes a village to raise a child.” The power of the community has paved the way for many business owners. When you choose to support black-owned businesses, you’re supporting black pride, unity, and self-determination. While that may be intimidating to some, it would mean the world to many families and communities. Black entrepreneurship is a tool for survival in a world that does not want to see you win. When we choose to win against all odds, young black children grow up seeing successful entrepreneurs and a thriving community.
Many large companies vocally support minorities and their diverse cultures but practice policies that keep systems of injustice intact. Whether it’s H&M’s unsound marketing, Starbucks’ removing people from its store, or Facebook’s hiring diversity problem, African Americans and other minorities often bear the brunt of corporate discrimination.
It's not enough to "not be racist" you have to be antiracism.
When you choose a Black-owned business over problematic companies, you vote with your dollar by divesting from these kind of practices and hold companies accountable. And further down the road, you empower successful minority-owned businesses to implement equitable policies.