The State of Black Entrepreneurship: ‘We don’t get what we need, yet we still find a way forward.’

As we come to the end of Black Business Month, we talked with three business leaders who gave us deep insight into the state of Black entrepreneurship across the country. They discussed how business owners are faring after 41% of Black businesses were lost in the beginning of the COVID-19 pandemic, what makes them optimistic for the future, and what gives them pause – as well as ways communities and policymakers can strive for greater equity and inclusion in the entrepreneurial ecosystem. Those leaders are: 

• Ron Busby, Sr., president and CEO of the U.S. Black Chambers, Inc.
• Katie Gailes, senior director of membership and DEI+B at National Association for Community College Entrepreneurship
• Dr. Fallon Wilson, co-founder and principal investigator of the #BlackTechFutures Research Institute

What makes you feel hopeful about the state of Black entrepreneurship right now? 

Ron Busby, Sr.: The fastest-growing business segment in the country, in reference to new openings, is Black women. And there’s a good news/bad news story there – the good news is that women are taking their future into their own hands. But the bad news is that many of them were forced into becoming entrepreneurs in the first place. But this is a case where tragedy turns into triumph, and that creates opportunity. And so now, we’re growing new businesses.

Katie Gailes: I’m optimistic because Black people, especially Black women, continue to start businesses at a very high rate in the face of systemic racism that is built into our culture. That initiative is what led to the formation of the Historically Black Colleges & Universities (HBCUs) and Black churches and Black sororities and fraternities, and all the cottage businesses that people started in their communities before we had the word “entrepreneurship.” And the local dry cleaners and daycare center and coffee shop, they’re a part of the community – they hire their friends and relatives and neighbors. So, I think we’re in the era of the entrepreneurial ecosystem builder. And I find it very encouraging because if you really think about it, that’s what grew this country in the first place.  

Dr. Fallon Wilson: What gives me hope is the resiliency of Black business owners – we don’t get what we need, yet we still find a way forward. And of course, I’m excited about the increase in the number of business owners this year, and also the increase for Black women business owners – this is very important. I’m also excited about the number of micro businesses that we’re launching online, understanding that there’s a need to have both online and offline business so that we can thrive in a digital economy. So that gives me hope.  

What makes you pause regarding the state of Black-owned businesses? 

Ron Busby, Sr.: We need to see more accountability. Over the last year, corporate America said they were going to give $6.6 billion to Black businesses and/or nonprofit organizations. We haven’t been able to trace more than a few hundred million of that … It wasn’t impactful. They can say, “We’ll deposit $10 million in a Black-owned bank,” but that’s still their money. They can pull it out at any time – it’s not like they’re giving the bank money. Banks don’t make money when you make a deposit, banks make money when you make a loan. So, when corporate America and the federal government and sports teams said, “We’re going to do right by depositing $10 million in this Black-owned bank,” that didn’t help our communities at all. So, without some real accountability, and some real intentionality, a lot of these programs are just good thoughts, good intentions, with no real measurements or metrics to be able to follow up.

Katie Gailes: I’m seeing a lot of great intentions and we see some really good movement – there are many chief diversity officers out there, and a lot of money that’s intended to be funneled into Black businesses. But with that sometimes comes arrogance – I call it the colonial mindset. The thinking is, “We’re going to come into your community. We’re going save you because we know what’s better for you. We’re going come in and fix everything.” And it’s that mindset that can cause things to be a dismal failure. 

Dr. Fallon Wilson: I am deeply concerned, as are many people, about inflation and about supply chain issues. When a large-scale business has a hiccup in their supply chain, they can divert resources, they have flexible capital, they can move things around. But that is not the case for communities of color, who often rely on outsourced materials but don’t have the relationships within a global ecosystem to work around the supply chain issues we’re having. We don’t have the additional capital to stretch the penny any further than the penny can be stretched.  

What can our communities do to be more inclusive and supportive of Black-owned businesses?  

Ron Busby Sr.: People shop where they feel most comfortable. So, you’ve got to make the environments more comfortable and inviting for people. I grew up in Oakland and we had a main street called East 14^th Street. On Saturday mornings, you could go and find all the Black stores. So, I went back to Oakland 30 years later, and that street was now more international. It had lost some of the appeal for Black people, but there was a Vietnamese section, a Chinese section, and a Latino section, and it made it more comfortable for the entire city to participate. So, yes, we lost some of our culture, but I think we gained the influence of the entire community. There’s a way you can bring people together – you just have to make it very comfortable for all of the businesses, as well as the residents.

Katie Gailes: I think small businesses can truly make a difference. If entrepreneurs really reach out in their community, they can make a conscious effort to hire and serve people that don’t necessarily look like them. And I’m talking about any business. If you reach out and decide that you’re going to hire people from your community and you don’t want them all to look like you, then you can make a difference. Because essentially, diversity is, “I look around the room and the people here don’t all look like me.”

Dr. Fallon Wilson: There are so many Black businesses online – a simple Google search will find you apparel, an amazing furniture company out of Harlem, and so much more. And if you put in Black History Month and business, a lot of businesses will come up. We’re no longer virtually unseen, if you want to find us. And if you want to shop locally, just identify your Black chamber of commerce and they would know where most of the offline mom and pop storefronts are within your city. 

How can policies better support a more equitable entrepreneurial ecosystem? 

Ron Busby Sr.: We were very pleased when President Biden went to Tulsa, Oklahoma, in 2020 and talked about the spend that the federal government has with Black firms. For the first time, we disaggregated the numbers, and it turned out to be 1.67%. So, all these years we’ve been voting, we’ve been paying taxes, and we’ve been advocating for good programs. And then you find out that you’re only getting less than 2% of the federal government spend, and the federal government is the largest procurer in the country. That’s why I’m saying you can’t be about just minority programs if you’re talking about moving an economic agenda for Black people. There’s got to be intentionality, there’s got to be transparency, and there’s got to be accountability.  

Katie Gailes: Policy happens at so many different levels, so it’s very important that policy makers know their area and look out for the big picture. If I’m a doctor and you have a sore toe, I could come in and look at your toe and say, “Oh, you have an ingrown toenail. That’s the only problem.” But if I don’t look to find out that you’re diabetic, then I’m missing the real issue. Sometimes, it seems our policymakers are looking myopically at one thing and not seeing the ripple effect, and that’s why some of their policies go bad. They need to look at policies that could help small business owners, especially solo entrepreneurs, to save, invest, and give themselves benefits. 

Dr. Fallon Wilson: It’s always an issue of public policy underlining all of this work. We all know that the payroll protection program was a great idea, but it did not work well for communities of color because of implicit biases that they had to go through. But we all agree that non-diluting capital (any capital a business owner receives that doesn’t require them to give up equity or ownership) is super important. Grants go a long way to supporting communities of color and helping them grow their own businesses – it gives them the flexibility to innovate on what they currently are doing or dig themselves out of a hole.  

Plus, policymakers simply need to listen. A while ago, the Small Business Association (SBA), along with the Congressional Black Caucus, hosted a listening session with Black entrepreneurship support organizations, which was really amazing because we were all able to share directly what our concerns are and what we need. I think part of good policy making – on the top end and also on the back end – is being able to ensure that before Congress passes a bill, that they run the traps, as we would say, of inclusive entrepreneurship organizations across the country to get feedback on what they’re hoping to do.