The Momentum of Black-Owned Businesses Is Here

When Covid-19 first hit, Black-owned businesses were decimated.

From the racial wealth gap, to institutional barriers preventing Black-owned businesses from accessing capital, to events like the Tulsa race massacre, the pandemic exacerbated a long history of setbacks. 

But two years in, something amazing is happening: Black entrepreneurship is rising like crazy.  

HOW? Two things are at play here:

  • Necessity Entrepreneurs: People who create startups in response to a “push,” like a job loss. When the pandemic began, Black workers were laid off more than other groups. Many used their stimmies to start businesses.

  • Inclusive Recovery: The recognition that things weren’t so great for a lot of people before the pandemic, and that recovery efforts will serve everyone by prioritizing economic opportunity for those who have historically been excluded from it.

WHAT’S UP ⬆️: 

Black-owned businesses are 🔥🔥🔥

Small businesses and startups are rising up across the country — disproportionately in Black communities. In 2020, more Black Americans started new businesses than at any time in the last 25 years (❗), and Black-owned businesses are by far seeing the strongest rebounds among racial and ethnic groups.

Corporate America is taking notice. In the wake of America’s racial justice reckoning, many companies are investing in Black lives to help right systemic wrongs… ones from which they’ve long benefitted. The Age of the Black Entrepreneur is here, and Big Business is a strong part of it. 

  • Target will spend more than $2 billion on Black-owned businesses by 2025 through new brands, contractors, and a startup program. Target previously committed to increasing Black representation in its workforce by 20% over the next three years, and is donating $10 million to racial justice nonprofits.

  • Netflix put 2% of its cash — around $100 million — in Black-owned banks to help close the racial wealth gap, and has pledged even more in the future.

  • PepsiCo, in partnership with the National Urban League, launched a Black Restaurant Accelerator Program to give 500 black restaurant owners a total of $10 million over the next five years.

WHAT’S DOWN ⬇️: 

Statement fatigue. Equity is the new Big Thing™️ for corporations. But if you’re talking the talk without walking the walk, the world will call BS.

WHAT’S NEXT ➡️: 

  • Disruption: Before the pandemic, entrepreneurship in America had been slumping for decades. Bolstered by stimulus money, a societal shift in how people think about work, and nationwide calls for racial justice, a new class of Black entrepreneurs is changing that.

  • Innovation: RaeShawn and LaShone Middleton exemplify the thousands of entrepreneurs in this cohort. The identical twins were laid off from their server jobs hours apart at two restaurants in Washington, D.C. They innovated by developing a delivery service for steamed seafood — a niche no other restaurant in the area filled.

  • Polarization: We’re in the midst of a sea change in what makes people buy what they buy and how it signals their beliefs. Supporting Black-owned businesses may become an identity all its own — but risks becoming an empty gesture of performative allyship.

  • Sticky: Many new Black business owners are necessity entrepreneurs. Rather than joining the growing pool of discouraged workers sitting on the sidelines of the job market, they reacted to layoffs by creating something new and, hopefully, lasting. 

  • Social impact: Do we really need to spell this one out? 🙈 Investing in Black-owned businesses is essential to an inclusive recovery. It will narrow the racial wealth gap by creating more opportunities for upward mobility, property ownership, credit building, and intergenerational wealth for thousands of Black Americans.

Content Team