National Black Business Month 2022
National Black Business Month helps recognize the success of Black owned businesses with the singular goal to generate greater economic freedom for these communities. Historian John William Templeton and engineer Frederick E. Jordan Sr. founded National Black Business Month in August 2004 to help drive the policy agenda affecting the 2.6 million African-American businesses on record at that time. By 2019, there were a total of 5,771,292 employer firms (businesses with more than one employee), of which only 2.3% (134,567) were Black-owned, even though Black people comprise 14.2% of the country’s population.
Shopping at Black-owned business is important and powerful. Here are how your spending habits can positively change the economic landscape for Black-owned businesses.
Closes the Racial Wealth Gap:
The median household net worth for a white family is 7.8 times that of the typical Black household ($188,200 vs $24,100). Despite making up almost 14 percent of the population, Black households only account for 4 percent of the total household wealth in the United States. The wealth gap between races is a continuation of decades-long, if not century long political and systemic attacks against Black and Brown communities.
Supporting Black owned businesses helps address the racial wealth gap by creating sustained, multi-generational wealth through income and asset ownership. Being conscious about shopping at Black-owned business today can close the racial wealth gap now and for the foreseeable future.
Promotes Business Equity:
The most common path to owning a business in the United States is by creating one yourself. In most cases, to start a business requires a significant amount of capital. For entrepreneurs starting their first businesses, the capital will usually come via personal savings and/or business loans.
When it comes to requesting financing for businesses through business loans, the Black community faces even further hurdles. According to the Federal Reserve, over 80% of white business owners receive at least a percentage of the funding they requested from the bank. This is compared to only 66% of minority business owners.
On average, Black entrepreneurs launch their business with around $35,000 in startup capital and loans. This is compared to an average of $107,000 for White entrepreneurs. If a Black-owned business is able to secure funding through a business loan, they paid almost 2% more in interest rates. Redirecting spending habits to focus on Black-owned businesses can help alleviate the need for companies to apply for additional loans or spend their personal saving.
Let’s celebrate Black Business Month! Check out these websites and apps that help buyers find Black-Owned businesses to patronize: