Home Small Business How America Can Support Black-Owned Businesses and Build Black Wealth

How America Can Support Black-Owned Businesses and Build Black Wealth


Fashion photographer Nikki Gomez was born and raised in New York City. But in November, on a tip from a buddy, she joined Tulsa Remote, a one-year program that offers eligible employees a $10,000 grant in the event that they relocate to Tulsa, Oklahoma. “I was like, why not?” Gomez mentioned. “I’m sure I can make a living in Tulsa doing what I do.” 

Gomez, 43, now spends her days on the streets of Tulsa, digital camera in hand, working with fashions in entrance of vibrant purple partitions or capturing clients within the essence of their on a regular basis lives.

Moving to Tulsa has given her room to develop as an entrepreneur, she mentioned, and she’s already considered three extra enterprise endeavors that may work within the metropolis.  

“For a long time, the narrative was, if you wanted to do anything in your career or your life, you need to be on either coast — LA or New York,” she mentioned. “Tulsa is a place where dreams come true. All of the things that I would think I wanted that I couldn’t really grasp in New York, I’m able to attain here and really thrive.” 

In three years, the Tulsa Remote program has drawn about 500 employees to the town, whose historical past is steeped in Black entrepreneurship. (The program does not acquire data on race or ethnicity.)

Once residence to Black Wall Street — a thriving, self-sufficient Black neighborhood within the time of Jim Crow legal guidelines, earlier than a white mob burned it to the bottom — Tulsa has change into one among a number of case research in how America can higher help its Black-owned companies.

Small companies make up 99% of American corporations and make use of almost half of the nation’s workforce.

But of the two million Black-owned companies in America, fewer than 125,000 make use of any employees in any respect, Fundera found, which suggests they’re nearly completely “solopreneurs.” And professor Robert W. Fairlie discovered that 41% of Black-owned companies shuttered in the first two months of COVID-19, in comparison with 17% of white-owned companies.

Building Black wealth is essential to fixing racial inequality, and analysis exhibits that entrepreneurship is a robust instrument in doing so. The Federal Reserve found in 2019 that households with a self-employed breadwinner had a web value greater than 4 occasions that of households headed by somebody employed by one other firm. White households usually tend to have fairness in a non-public enterprise than Black households — 16.9% versus simply four.eight%.

Insider’s reporting suggests there are 4 key levers native governments can pull on to remodel Black entrepreneurship from a grassroots effort right into a nationwide precedence. Those levers are offering quick, reasonably priced web entry; strengthening types of neighborhood help; awarding extra authorities contracts; and lowering the price of residing. These priorities have by no means been extra pressing for small-business house owners, and Black house owners specifically.

There are 4 US cities making a blueprint for the remainder of the nation on tips on how to tackle essentially the most urgent points: Chattanooga, Tennessee; Atlanta, Georgia; New Orleans, Louisiana; and Tulsa, Oklahoma.

Here’s how they’re doing it. 

Internet entry: Chattanooga, Tennessee


Drone Trekkers / Shutterstock

Panic coursed by way of Felicia Jackson’s physique. She sat in her makeshift workplace in Austin, Texas, desperately making an attempt to attach her laptop to the wi-fi printer so she may fill an order for Walmart — a game-changing buyer for her first-aid startup CPR Wrap, which sells instruments that assist carry out CPR. 

She did not have the time — or the cash — to waste on a sluggish web connection. 

“You want to put your best foot forward,” mentioned Jackson, who had briefly relocated to Austin to take part within the accelerator program Techstars. “It has to go perfect so they can see you, see what you are compatible with, so you can get that business and grow. If we don’t grow, then our community doesn’t grow.” 

Felicia Jackson, founder of CPR Wrap

Felicia Jackson is the founding father of CPR Wrap.

Courtesy of CPR Wrap

Nine hundred and thirty miles away, in her hometown of Chattanooga, Tennessee, the place she had based her enterprise 5 years prior, Jackson was used to the good thing about a vital 21st-century public useful resource: reasonably priced, quick, dependable fiber-optic web service.

Before Chattanooga introduced broadband almost a decade in the past, it was changing into another postindustrial town losing its appeal. Its comeback, partially by way of accessible web, has bolstered how necessary a metropolis or city’s assets are for entrepreneurs — and Black enterprise house owners particularly, because the US ethnic group is the most probably to begin companies however the least more likely to keep afloat.

They are more and more bucking the brick-and-mortar mannequin and are extra seemingly than some other teams to have online-only businesses. A survey by GoDaddy Venture Forward discovered 72% of Black enterprise house owners reported that having a enterprise web site helped them throughout COVID-19.

“I grew up in a low-income community as a child,” Jackson mentioned, including that a few of these households do not have entry to dependable web.

Chattanooga was the first city in the US to reach gigabit speeds citywide, offering an instance of how a municipally owned fiber-optic community has bolstered its financial system and enterprise neighborhood. A University of Tennessee at Chattanooga research discovered that the fiber-optic community had helped create and retain 40% of all jobs in Hamilton County because it was deployed, and had helped create $244 million in fairness and crowdfunding for entrepreneurs.

Marcus Shaw, CEO of CO.LAB

Marcus Shaw is the CEO of CO.LAB

Courtesy of CO.LAB

Marcus Shaw, CEO of CO.LAB, a nonprofit startup accelerator in downtown Chattanooga, mentioned EPB’s fiber community supplied a dependable and reasonably priced useful resource for Black entrepreneurs who in any other case might not have had the assets to climate the pandemic. 

“Two hundred years ago, you wanted to build your city on a river because that enabled commerce,” he mentioned. “Today that natural resource is broadband.” And, he provides, being municipally owned means there is no redlining neighborhoods from entry.

Jackson felt that urgency firsthand in Austin. Now again in Tennessee, she now not has to fret about calls being dropped, and can depend upon dependable tv service to entertain her patrons as they arrive to her workplace. And to Shaw, primary entry is essential for sustaining a way of dignity within the work of working a enterprise.

“Black folks, white folks, and everybody in between — communities need to be unapologetically supportive of underserved businesses,” he mentioned. “We don’t need to be fearful or embarrassed, or self-conscious about the fact that we are saying we want to support Black-owned businesses.”

Now we’re seeing the dialog attain the nationwide stage. In April, President Biden proposed $100 billion to fund affordable broadband internet access for all Americans, as a part of his bigger infrustructure plan.  

Community success: Atlanta, Georgia  

Atlanta, Georgia

Tetra Images/Getty Images

Jay Bailey doesn’t need the startup accelerator he runs in Atlanta to be “a unicorn shop.” 

“I’ve got a T-shirt that says, ‘Exit is not my strategy,'” he mentioned. 

Instead, his purpose is to see extra companies producing six-figure revenues in Atlanta, creating jobs, and conserving their success in the neighborhood, reasonably than transferring away after they make it large.

Venture funding for Atlanta startups reached a five-year high, placing the town on the brief record for Silicon Valley rivals. It’s additionally residence to Fortune 500 corporations like Coca-Cola and Delta.

Jay Bailey, president and CEO of The HJ Russell Center

Jay Bailey on the 2018 Hosea’s Heroes Awards in Atlanta, Georgia.

Paras Griffin/Getty

“This is ground zero for Black entrepreneurs,” mentioned Bruce Berger, a professor at Clark Atlanta University and director of its Center for Innovation and Entrepreneurial Development. “We have the universities here that are historically Black universities.”

But it has extra to supply than billion-dollar valuations. The Metro Atlanta Chamber discovered that 6.2% of employer companies within the 29-county metro Atlanta area have been Black-owned. 

“Small businesses, make no mistake, run our economy,” mentioned Bailey, president and CEO of The H.J. Russell Center for Innovation & Entrepreneurship. “We may be searching for the next billion-dollar company and passing over a thousand $2 million companies that will create thousands of jobs in the community.”

The heart was named in honor of Herman J. Russell, who based the real-estate developer H.J. Russell & Company in 1952 and constructed its headquarters down the road from three HBCUs — CAU, Morehouse College, and Spelman College. Bailey credit Russell with inspiring new generations of Black entrepreneurs.

“H.J. Russell is one of the most prolific entrepreneurs this city has ever produced,” Bailey mentioned. “Those students in real time could see the physical manifestation of what was possible for people that look like him.”

Bailey needs to hold that legacy ahead in order that youthful Black entrepreneurs can, in flip, make cash, rent employees, and assist Atlanta’s Black enterprise neighborhood thrive. For many younger founders, this begins with startup cash. The Russell Center helps founders perceive the kind of funding that is proper for his or her firm and what they should get it, reminiscent of writing a marketing strategy to get a financial institution mortgage. 

“If I’ve received a relationship with Chase, a enterprise fund, an

angel investor
, or CDFI, I do know their underwriting standards. I do know their funding platform,” Bailey said. “I do know all 15 issues that they want. Not solely is that entry, however it is also vanity and self-confidence in-built that firm as a result of now they are going ready.” 

Government contracts: New Orleans, Louisiana

New Orleans, Louisiana - Famous Decatur St French Quarter New Orleans USA.

Education Images/Getty

Government contracts are the holy grail for a lot of small-business house owners. They are typically a long-term, dependable supply of revenue, amounting to $132.9 billion a 12 months nationally. That is, in the event you can land them. The metropolis of New Orleans is working to make them extra attainable to Black enterprise house owners.

“Government contracts tend to go toward incumbents, companies that have won them before, or have some kind of long, established track record with the government,” mentioned Victor Hwang, the founding father of Right to Start, a nonprofit supporting insurance policies and initiatives that make entrepreneurship extra accessible.

Cleveland Spears, president and CEO of Spears Group.

Cleveland Spears is the president and CEO of Spears Group.

Courtesy of Spears Group

A current McKinsey report discovered that Black-owned companies procure obtainable authorities contracts much less usually than white-owned companies, each within the variety of jobs and greenback worth. The Minority Business Development Agency reported that barriers can contribute to this disparity, reminiscent of networking and last-minute requests for bids. 

Hwang wrote in a recent article for Inc. that granting simply 5% of presidency contracts to small companies — a core piece of the Right to Start marketing campaign — would contribute to financial restoration in communities throughout the nation. 

Getting this cash to small companies is one hurdle; ensuring native and federal funds are put aside for Black-owned and minority businesses is one other. Kim Folsom, the founder and CEO of Founders First Capital Partners, mentioned she has but to see an efficient mannequin within the US.

Funding might assist a enterprise develop, however a authorities contract gives the purchasers and companions wanted to maintain that progress, she mentioned.

New Orleans’ Regional Transit Authority has pledged a minimal of 31% of its federally funded contracts to native, licensed minority-owned companies, that are additionally known as deprived enterprise enterprises. This was in response to an absence of presidency contracts granted to Black enterprise house owners, regardless of the town’s excessive Black inhabitants, a Brookings report discovered. 

“That 31% goal is just an acknowledgment we need to be assertive and do everything we can to make sure that all firms, and in particular DBEs, have the ability to compete for work,” Alex Wiggins, CEO of RTA, mentioned. “We really want to share the wealth essentially across the board.”

Ideally, he’d prefer to see small companies begin out on small contracts and develop their capability and employees over time to finally bid on bigger initiatives as they change into greater corporations.

One of the businesses that landed work with the RTA is Spears Group, a communications agency based by Cleveland Spears. He mentioned it is also necessary for personal corporations to offer extra viable alternatives for girls and folks of colour. “Ultimately, it makes that company more competitive because we get a broader and more diverse slate of people to work with,” Spears mentioned. 

Cost of residing: Tulsa, Oklahoma


Sean Pavone/Getty Images

In 2018, Tulsa launched Tulsa Remote, and up to now 90% of the 500 sponsored members are staying past their yearlong dedication, a spokesperson informed Insider. A key a part of the worth proposition is Tulsa’s reasonably priced price of residing: Median lease on a one-bedroom is $546, in comparison with $2,475 in Gomez’s residence metropolis of New York.

“The quality of life is also just that much better,” Gomez mentioned.

After all, it takes cash to make cash. And if folks wrestle to afford lease, they’re much less more likely to begin companies.

Nikki Gomez, photographer

Nikki Gomez is a trend photographer in Tulsa, Oklahoma.

Josh New

A report by the Kauffman Foundation discovered that individuals with a better family web value are inclined to land extra funding. When you think about a nationwide wealth hole, Black entrepreneurs are much less more likely to have pals and household with cash to lend or make investments to begin a enterprise. The common entrepreneur takes $23,000 from household and pals. 

“The ability to take some time off to start a business is really impossible for many people because when you start a business, at least in the beginning, you’re losing money,” mentioned Hwang. “The playing field is tilted against people who don’t have the ability to take that risk.” 

When somebody has a secure revenue and rising community, it provides them higher odds to begin a enterprise. “It’s not just the cash that people find most valuable,” Hwang mentioned. “It’s actually the network they put you into. They give you a space at a coworking space, so you’re actually embedded into the entrepreneurial community right away.”

2021 marks the 100th anniversary of the Tulsa race bloodbath, and Black entrepreneurs have since come collectively to rebuild the district that was violently taken from them. There’s Fulton Street Books, a bookstore and café looking for to offer area for marginalized communities. There’s additionally the Black Wall Street Gallery, based by Tulsa native Dr. Ricco Wright, which seeks to protect Black historical past. 

Venita Cooper, whose streetwear-inspired artwork gallery Silhouette Sneakers & Art can also be on Black Wall Street, is not a part of Tulsa Remote, however she mentioned the town provides different packages which have helped get her firm off the bottom. “The access in Tulsa is just mind-blowing,” she mentioned.

She was ready to participate within the Tulsa startup collection and pitch her enterprise thought for grant cash. She took courses at Tulsa Economic Development Corporation and additionally went by way of the George Kaiser Family Foundation and Black upStart, a program that enables rising entrepreneurs to take courses and refine their enterprise pitches.  

Honest conversations are important for any metropolis to enhance financial progress and growth, Bailey mentioned. “Without the courage to have a conversation about race, then we’re being intellectually disingenuous in our approach,” he mentioned.

“I want Black Wall Street to be bigger,” Cooper mentioned. “It used to be 40 blocks of booming economics and culture all driven by Black entrepreneurs, creators, artists.” And although she conceded Tulsa nonetheless has work to do, she remained optimistic.

She mentioned, “I certainly think progress has been made.”


Source link Businessinsider.com


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