Black-Owned Businesses Urgently Need These 4 Kinds of Support

Each year since 2004, August has brought us Black Business Month, a tradition dedicated to raising awareness about the achievements of Black entrepreneurs and business owners.

But this observance seeks to be more than just another moment of visibility. It’s a call to action for consumers, policymakers, and communities to support Black-owned businesses and advance policies that address the hurdles these entrepreneurs face — particularly the challenge of gaining financial backing. (I may know a thing or two about that!)

The significance of Black Business Month cannot be overstated, especially as Black entrepreneurs continue to face systemic challenges that hinder our growth and success.

The ROI of Supporting Black-Owned Businesses

Supporting Black-owned businesses is a strategic move for economic growth. Black-owned businesses contribute significantly to the U.S. economy, creating jobs, fostering innovation, and driving community development.

According to a report from the Census Bureau in 2022, there are estimated to be 161,031 Black-owned businesses in the United States. The report notes Black-owned businesses generate approximately $183 billion in annual revenue, 1.4 million jobs, and $54 billion in payroll. Despite these contributions, statistics show that Black entrepreneurs still struggle with limited access to capital and lower revenues compared to non-Black businesses — which means lower financial returns and less financial security for their owners.

Thus, supporting Black-owned businesses can also help reduce the racial wealth gap, which remains a very real barrier to economic equality in the United States. According to the Federal Reserve, the median wealth of Black families is just 13 percent of that of White families.

What Do Black Business Owners Actually Need?

So, what does support for Black-owned businesses actually look like? It could look like a variety of things, but here are four of the most pressing needs:

1. In-Person Patronage: One of the most direct ways to support Black entrepreneurs is to intentionally seek out and shop at Black-owned brick-and-mortar stores. Directories like The Black Wallet, Official Black Wall Street, or local chamber of commerce listings exist to give visibility to Black-owned businesses.
2. Online Traction: The rise of e-commerce has made it easier than ever to support Black-owned businesses, regardless of location. Platforms like WeBuyBlack, BLK + GRN, and Etsy feature a wide array of Black-owned brands offering everything from clothing and beauty products to home goods and art. Retailers like Target have a page dedicated to Black-owned businesses.
3. Amplification and Visibility: Consumers can and should share positive experiences with Black-owned businesses on social media, write reviews, and recommend them to friends and family. Word of mouth is free marketing for these companies–it can not only help drive traffic to these businesses, but also introduce them to new customers who might not have discovered them otherwise.
4. Investment: While organizations like the National Black MBA Association offer financial support and mentorship, and community development financial institutions (CDFIs) provide loans and financial services, there’s still a lot of work to be done in the VC space. Black women received 0.41 percent of venture capital distributed in 2021. Not even a half of a percent!

Black Business Month reminds us just how important economic equity is for all of us. We each play a role in the overall health and success of our country. And despite how far we’ve come in the last 60 years, some groups still get left behind.

But individual actions can, collectively, have an enormous impact–not just on individual businesses, but on community development, the racial wealth gap, and our long-term economic stability. So as we celebrate Black Business Month, let’s commit to making support for Black-owned businesses a year-round effort.