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Resources every Black business owner should know

August marks the 17th anniversary of National Black Business month, which was launched by historian John William Templeton and engineer Frederick E. Jordan Sr. in 2004 to shine a spotlight on the more than two million Black-owned businesses in the U.S. These businesses often face disproportionate challenges to success, and this month of heightened awareness provides an opportunity to increase advocacy, education and policy efforts to spur growth and inspire others.

To say that the 12 months since the last National Black Business month has been a challenge is an understatement. The COVID-19 pandemic and resulting shutdowns, the uneven allocation of relief funds to Black businesses, and the overall conversation around racial injustice have led to some difficult times for Black business owners. Yet, there continues to be light at the end of the tunnel.

According to census data, 380 out of every 100,000 Black adults became new entrepreneurs in 2020. That means there were more new, Black-owned businesses in proportion to the total U.S. population than anytime in the last 25 years. Clover wants to celebrate these new business owners and support the ones hard at work to make their established businesses thrive by providing some valuable, practical resources.

Finance

Money is a constant challenge for many Black-owned businesses. They still receive significantly less funding and have overall less access to capital than other businesses, which can make starting and sustaining a business difficult. This can often lead to reliance on personal credit and investment for business capital, increasing the stress on the owner.

There is now a range of lending, grant, and scholarship opportunities for minority merchants looking to gain more financial support. Here are some options for Black business owners looking to boost their capital:

State-sponsored programs

Private/nonprofit opportunities

  • The Business Consortium Fund offers loans up to $500,000 with favorable repayment terms.
  • Union Bank’s Business Diversity Lending Program provides loan packages for small, minority business owners who have been in operation for at least 24 months.
  • Accion is a nonprofit that makes loans up to $1 million to small businesses who have had trouble getting traditional loans, with specific programs for women- and minority-owned businesses.

Venture capital/Angel investors

  • Unshackled Ventures is a venture capital firm that provides financial support to immigrant-owned business who show potential for substantial returns.
  • Kapor Capital invests in early-stage tech-driven companies aimed at closing a gap of access, opportunity, or outcome for communities of color and low-income communities.
  • Intel Capital’s Diversity Initiative targets high-tech companies run by minorities, with a new five-year commitment that 15% of its total new deals will be led by Black founders.

Aggregators

These aggregators can help connect small businesses to the resources they need to grow, whether other businesses, governments, or donors.

Incubators and resource providers

For startups aiming to develop the businesses with a partner who can offer a full scale range of services, these incubators could prove invaluable.

Contests

  • Since 2013, FedEx has run a small business grant contest every year, with a grand prize of $50,000. The 2021 contest recently ended, with several Black-owned businesses taking home $10,000.
  • The National Black Business Pitch (NBBP) is a competition designed to connect Black-owned businesses to corporations who seek to expand and diversify their supply chain with new products and services.

Mentoring and networking

It’s hard starting and maintaining a successful business. For many entrepreneurs, having an experienced person who can serve as a sounding board is critical. However, many Black-owned businesses are lacking this connection. Research done in New York showed that founders who were mentored by successful entrepreneurs were three times more likely to become successful than those without help.

Fortunately, this avenue has improved for Black business hopefuls. There are several organizations and groups dedicated to providing a helping hand and proffering some solid advice.

  • SCORE is a network of volunteer, expert business mentors who are dedicated to helping small business grow and thrive. The SCORE for Black Entrepreneurs program gives owners a chance to speak and learn from someone who understands the challenges facing Black small business owners today.
  • Black Founders has developed global programs that help entrepreneurs by sharing resources and hosting networking events and conferences in cities across the U.S.
  • Black Girl Ventures offers comprehensive education and advisory services to provide business owners with a guide for growth, both from a mentorship and capital component.  
  • A model program for a major city BE NYC Mentors is a program seeking to increase Black ownership in high-growth industries, with hand-picked mentors willing to share their strategies for success in business.

Chambers of Commerce

Chambers of commerce can be invaluable resources for any small business starting out or needing a helping hand. These chambers are noteworthy resources for Black- and minority-owned businesses in their areas:

Buying and supporting Black business

The desire to support Black-owned business has spiked over the past year, as customers want to shop more intentionally, with aiding businesses of color at top of mind. Supporting Black-owned business helps strengthen local economies, create job opportunities, close the racial wealth gap, and celebrate diverse cultures. According to the Black Chamber of Commerce, about 75% of Black-owned small businesses saw increases in customers in the summer of 2020, but those figures haven’t proven to be sustainable.

The other important element comes from the merchant side of the equation. Many would like to insert themselves into the supply chain or ecosystem of Black-owned businesses, but many not know where to start. Here are some places to shop and other ways to help:

  • Black-Owned Market features quality products from Black makers to help add to your everyday routine. From beauty to household goods, this site features collections from emerging business owners across the country.
  • Another collective of Black-owned businesses, We Buy Black is where you can buy Make the Switch starter kits featuring an assortment of home goods ranging from toothbrushes to laundry detergent.
  • The advocacy group Color of Change started the Black Business Green Book, a way to search businesses across categories, including home goods, fashion, health and wellness, books and art. You can search by your state or online-only retailers.

Companies across the spectrum can do their part to help smaller businesses. Clover offers its Back2Business program, which helps Black and other minority-owned small businesses get back on their feet and back to business, with grants, mentorship, and other support. Merchants can also help by:

  • Varying the supply chain. Business owners should consider adding minority vendors, suppliers and service providers to the supply chain.
  • Diversifying the workforce. Help train the next generation of minority entrepreneurs by giving them the opportunity to work today.
  • Building a relationship. Companies should support Black-owned business because they believe in their mission, values and plans. Building relationships is a way to connect on more than a surface level.

And, be sure to peruse this collection of posts featuring Black-and minority-owned businesses.

Clover equips minority business owners with POS solutions to scale their business goals and streamline payment processing. Talk to a Clover Business Consultant today to learn how our POS systems and business management solutions can help merchants protect what’s important to them and run their operation easier.

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