Black entrepreneurship has an amazing history in the United States.
Within two decades after the end of slavery, Black Americans had started thousands of new businesses, mostly serving exclusively Black communities.
During Reconstruction and the late nineteenth century, some former slaves and their children were drawn to entrepreneurship as a way to celebrate their freedom and become economically independent. Others were forced to start their own businesses after being unable to find work due to their race.
Entrepreneurship is a historic tradition among Black Americans. Some Black entrepreneurs are well known, such as Berry Gordy III, who started the successful Motown Records label with only $800 in borrowed cash. Or Bob Johnson, co-founder of BET and America’s first Black billionaire. Oprah Winfrey, Madam CJ Walker, and David Steward have all made names for themselves as Black innovators.
These are the Black entrepreneurs and businesses you probably have heard of, but there are also millions of Black-owned businesses you don’t know by name.
The majority of Black-owned American businesses are small, local ventures that serve their communities: hair salons and barbershops, restaurants and catering companies, construction and maintenance contractors, record stores, bookstores, local insurance companies, local artists, funeral parlors, and tradesmen.
These grassroots businesses are the often-ignored legs of an economy that tends to boast the kind of high-growth business more often associated with “innovation” and “entrepreneurship.”
And yet, as accomplished and rich as the tradition of Black entrepreneurship is, it has experienced deep hardship. Consider:
- Black-owned businesses closed at double the rate of white-owned businesses due to the COVID-19 pandemic.
- Black Americans own only 3.5 percent of American businesses (despite making up 13 percent of the population).
- Black-owned businesses earn, on average, one-sixth the revenue of white businesses, according to this University of Michigan study.
- The rate of entrepreneurship among Black Americans has been lower than that among white, Asian, and Latino Americans for almost all of the last twenty years.
- Only 29 percent of loans sought by Black business owners are approved by large banks, as compared with the 60 percent sought by white business owners and 50 percent sought by Hispanic or Latino business owners.
While fully addressing these problems requires building better societal systems and institutions, there’s plenty to be done alongside policy reforms.
Dozens of CO.STARTERS members have made equity in entrepreneurship a main priority. SpringGR, Create Birmingham, Corner to Corner, LAUNCH, Launch NOLA, Village Launch, Launch MKE, Progeny Startups, Own Our Own, Block Knowledge, CNI Solutions, Epicenter Memphis, and many others are working toward a brighter future for all American entrepreneurs.
Since 92 percent of alumni go on to start a business with a 97 percent one-year survival rate, CO.STARTERS is forecasted to support the launch of at least 350 new Black-owned businesses in 2021—a humble but significant feat in moving the needle toward equity.
Recognizing that we must work harder and with new tactics to close the gap, CO.STARTERS is proud to play a part in challenging the status quo through accessible entrepreneurial education. In fact: 31 percent of CO.STARTERS participants are African American or Black. Since 92 percent of alumni go on to start a business with a 97 percent one-year survival rate, CO.STARTERS is forecasted to support the launch of at least 350 new Black-owned businesses in 2021—a humble but significant feat in moving the needle toward equity.
This Black History Month, let’s celebrate the rich tradition of Black entrepreneurship in America as a fulfillment of the American promise: no matter who you are, or where you came from, or what obstacles have restrained you so far, together we can rise above those barriers.
And we can all do our part to pursue a better tomorrow.
If you are a Black business owner, check out the resources below: