All small businesses have felt the impact of COVID-19 over the past two years. From February to April 2020, the United States saw a 22% decrease in the amount of working business owners; this was the largest drop ever. However, Black-owned businesses have fared the worst due to the pandemic and generational racial disparities.
The Racial Wealth Gap for Black-Owned Businesses
In general, Black households hold only 2.9% of the wealth in this country despite being 15.6% of the population. In comparison, white families have 86.8% of wealth and are 68.1% of the population. This data represents the racial wealth gap between Black and white households. Moreover, this gap extends to Black owned businesses. Currently, white business owners have over 9x more average annual sales than Black owned businesses. This gap is due to a magnitude of barriers systemically placed before Black people in the United States to hinder wealth accumulation. These barriers are not ancient history, though.
“Black entrepreneurs apply for loans less often than White entrepreneurs largely because they expect to be denied credit, even when they have a good credit history and in settings where strong local banks favor new business development.” – COVID-19, Small Business Owners, and Racial Inequality, National Bureau of Economic Research.
Taking Intentional Steps to Close the Wealth Gap for Black Owned Businesses
At USI, we are committed to designing equitable practices that inform and influence policy, transform systems, and positively impact families.
Through these intentional and equitable practices, USI supports Black owned businesses in a multitude of different ways, therefore continuing efforts to close the racial wealth gap in America. For example, USI supports Black owned businesses as vendors and programming partners, creates a network of organizations that foster entrepreneurialism, and invests directly in Women and Minority-Owned Business Enterprises via our CDFI.
Direct Support for Black Owned Businesses
Two of our frequently supported Black owned vendors support the organization on both a national and local scale across our sites. This intentional support and collaboration cultivate a relationship that flows deeper than invoices and establishes our commitment to stable and thriving families and communities.
Simon Says Promotional Products Plus
Simon Says is a Texas-based promotional products company that our Communications and Marketing team uses to design and order swag, t-shirts, and more. In addition, much of our employee or resident gifts and giveaways are typically purchased through Simon Says.
https://www.simonsaysproplus.com/
EyeSeeMe African American Children’s Bookstore
EyeSeeMe is a bookstore located in St. Louis. This bookstore provides “the very best children’s books on the market that promote positive images and stories about African American culture and history” (via their About page). Additionally, we utilize EyeSeeMe for national events like the recent Read for the Record or for just supporting reading for youth across our sites, not just in St. Louis.
Fostering Entrepreneurship for Black Individuals
Not only do we support current Black owned businesses, but we also encourage our residents with an entrepreneurial spark to follow their dreams of starting their businesses.
Green Garden Bakery
Green Garden Bakery (GGB) is an innovative social enterprise program started in 2014 by a group of entrepreneurial youth in the USI Heritage Park Neighborhood of Minneapolis. Youth leaders grow vegetables in their community garden, bake them into healthy vegetable-based desserts, market them using sustainable practices, sell the desserts for “pay-what-you-want,” and donate their proceeds back into the community.
Today GGB has developed into an award-winning social enterprise led by a group of young minority entrepreneurs driven by the passion for changing the world one healthy and delicious baked good at a time.
http://www.greengardenbakery.org/
DreamBuilders Program
The DreamBuilder entrepreneurial training program is sponsored by the Women’s Business Center for Innovation and Entrepreneurship at Old Dominion University (ODU) in Norfolk, Virginia. In partnership with ODU, the Norfolk People First team refers Tidewater Gardens entrepreneurs to sign up for this nine-week course.
This program covers topics like marketing, management, accounting, risk assessment; matches students with industry leaders as mentors; and awards a DreamBuilder Certificate and a complete business plan for each student.
https://www.odu.edu/iie/wbc/biz-startup
Investing Directly in Black Owned Businesses via the USI CDFI
One of the strategies that USI has put in place to directly impact the racial wealth gap for Black families and businesses alike is through our CDFI. Our goal is to propel entrepreneurs to prosperity and economic liberation by creating middle-income and wealth-generating jobs and thriving businesses.
We intend to provide much-needed capital and financial services to Black, Brown, and Indigenous families residing in revitalization areas across the country where USI is present. In addition, the USI CDFI offers small business loans at favorable terms for new, growing, and locally owned businesses connected to community revitalization projects throughout the country.
While not exclusively for Black owned businesses, this CDFI takes direct action to break down the racial wealth gap between Black and white businesses.
It’s More Than Just Economic Mobility
USI believes that ensuring Black owned businesses are supported economically is a significant component in reducing the racial wealth gap. However, due to the systemic and historical barriers placed precisely on Black families, this strategy must affect all cross-sections of their lives; no matter how beneficial, economic mobility practices are not the end all be all to closing the racial wealth gap.
USI takes a well-rounded examination of how race affects minority families in this country and makes positive shifts towards growth in all areas. Our intentional work through these cross-sections of economic mobility, health and wellness, education, housing stability, and policy engagement is necessary to dismantle barriers that hinder Black and Brown communities from becoming stable and thriving.
How Individuals Can Support Black Owned Businesses
While USI is taking larger, more systemic approaches to closing the racial wealth gap for Black owned businesses, we encourage individuals to make better intentional and equitable choices in how they shop. By shopping at Black owned businesses, any individual can make an impact on Black families directly and immediately.
We suggest the directory Support Black Owned to look for Black owned businesses, restaurants, tradesmen, etc nearest you.