February marks Black History Month, an annual recognition of the achievements of black Americans and their role in U.S. history.
While political figures such as Dr. Martin Luther King Jr. and Rosa Parks may be the first names to come to mind when considering civil rights. However, African American entrepreneurs have paved the way for economic success. Many of them are well known: Booker T. Washington devoted his efforts to the advancement of the economic position of African Americans; Oprah Winfrey, the media mogul, is among the country's richest women; and Sean "P Diddy" Combs and Jay Z helped expand hip hop from a music movement to a cultural juggernaut.
Madam C.J. Walker became a millionaire by developing beauty and hair care products specifically for black women. Elijah McCoy created an oil pump for locomotives and other machines. While others created copycat products, what worked best was "The Real McCoy" (from which we owe the term).
Minority entrepreneurs are the fastest growing demographic of entrepreneurs, according to recent data of the Survey of Business Owners, and black women-owned businesses have grown by 67.5% from 2007 to 2012, according to U.S. Census figures.
According to the U.S. Department of Commerce's Minority Business Development Agency (MBDA)'s annual performance report for FY 2014, the MBDA saw an overall 45% increase in client contracts and capital transactions to $6.9 billion -- far surpassing the amount MBDA Business Centers achieved in the FY 2013. This activity led to the creation and retention of nearly 31,000 jobs.
Minority borrowers still have a harder time securing financing than the owners of non-minority firms. In fact, up to one-third of minority-owned firms with gross receipts under $500,000 did not apply for a loan due to their fear of rejection, according to the MBDA's Disparities in Capital Access Report.
In response, the Small Business Administration (SBA) and other non-profit agencies implemented a number of initiatives to ease the concerns of African American entrepreneurs and help them secure capital.
Emerging Leaders 2016 Training Cycle
The SBA developed this seven-month business training initiative to provide entrepreneurs growing business operations in economically challenged communities with fundamental training. Participants in the cost-free program will have the opportunity to work with business mentors while attending specialized workshops and networking with political leaders and the financial community.
Nearly 70 percent of past participants in the annual program recorded revenue growth, according to the SBA. Typically recruiting for this initiative begins as early as February and starts in the Spring. For more information, email firstname.lastname@example.org.
SBA's 8(a) Business Development Program
This program offers the opportunity to participate in one-on-one counseling, training workshops and other valuable sessions with the guidance of small business experts. To learn more, visit the SBA's 8(A) site.
The Young Black Male Entrepreneur Institute
The nonprofit U.S. Black Chambers launched this 16-week program to address the employment gap among black men and intended to inspire new leadership opportunities. Entrepreneurs enrolled in the course will receive business development counseling from participating business institutions and executive-level business professionals. For more information about this mentorship program, visit http://bmeinstitute.org.
Just as it is for all entrepreneurs, African Americans can take advantage of advances in technology to secure business financing. Filling out an online application from one's computer, laptop or phone is less time-consuming and certainly less intimidating than walking into a bank and asking to fill out paper work. Online platforms, including Biz2Credit and others like it, help streamline the process and level the playing field by connecting borrowers with nonprofit microlenders and Small Business Development Centers (SBDCs) that want to help build businesses in economically disadvantaged areas.
While February is a time to reflect on all of the positive influences of prior accomplishments of African Americans, it is also a time to assess how much room there is still left to grow, especially economically. The SBA and other government-funded nonprofit programs have been aggressive in setting up initiatives to enable the success of minority-owned businesses, especially under the Obama Administration. Minority entrepreneurs can and should seek out and take advantage of these opportunities.