What the Recession Did for Black-Owned Business May Surprise You
Black-owned businesses, particularly those owned by women, are growing much faster than
businesses as a whole.
The Great Recession of 2008 impacted small businesses, causing many to fail when consumers cut their spending back to cope with stock market losses and high levels of unemployment. The impact of the recession has lasted for eight years. Experts believe that the U.S. has still not fully recovered from it. Small businesses faced many challenges during the recession, and these haven't changed in the time since the economy began to recover, however modestly, in the past few years. Increasing regulation, increasingly choosy consumers, and depleted reserves have made it more difficult for existing small businesses to survive and for new businesses to get started. At a time when other businesses have been failing, however, the doors of opportunity have been swinging wide open for black entrepreneurs. The numbers prove that the impossible has become possible. Black-owned businesses in the U.S. increased 34.5% from 2007 to 2012 while the total number of businesses increased only 2%. More recent indicate that growth continues to increase in this sector. Women Lead the Way for Black-Owned Businesses Female black-owned businesses grew 66.9% between 2007-2012 - that's almost twice the rate of black-owned businesses overall. Women now own 59% of all black-owned businesses, compared to women overall, who owned 36% of all businesses in 2012. It's clear that black female entrepreneurs are leading the way in the growth of these businesses and helping bridge the gap in black business ownership. There is still room for growth, however. While African-American women are starting more and more businesses, the revenues of those businesses are well below average for businesses overall and for black-owned businesses as a whole. Most of these new businesses don't have employees other than the owner, a trend that must be overcome for the businesses to grow and develop.
Although black-owned businesses are growing at a fast pace, there are many challenges yet to overcome.
Black-Owned Businesses Have Room to Grow It is encouraging to see the trend of increasing entrepreneurship among African-Americans, and there is hope for those businesses to grow in the future. Black-owned businesses represented 9.4% of all businesses in 2012, but generated only .4% of the total revenue of these businesses. As these black-owned businesses look to grow and prosper, they will need help finding access to financing, partnerships, and suppliers (or businesses to supply). These young businesses have much to learn about scaling up and about the way the corporate world works. The California Black Chamber of Commerce and other groups can provide training, connections, and mentorship to help black-owned businesses reach their full potential and close the revenue gap that currently exists. The California Black Chamber of Commerce provides many workshops, consultations and other programs designed to help black-owned businesses prosper and be successful in their struggles to navigate entrepreneurship. Join the chamber to get these benefits and be part of the movement.
Tara Lynn Gray
Chamber Foundation Board of Directors
President & CEO YADARI Enterprises