Labor and supply chain constraints are among the issues facing Black entrepreneurs
It’s the best and worst of times for Black entrepreneurship.
While Black-owned businesses are opening at a brisk pace, they are running into the same problems most businesses confront and, in many cases, faring worst than other racial groups.
Like the rest of the U.S. economy, Black businesses have rebounded from the brutal effects the spread of COVID-19 had on the country.
At the onset of the coronavirus pandemic, the Black business ownership rate dropped by 41%, more than any other racial group, between the months of February and April in 2020, according to the Committee on Small Business.
Meanwhile, the number of Black businesses increased by 38% between February 2020 and August 2021, according to an NBC News report citing research from the University of California, Santa Cruz.
“In many cases, it’s not that hard to start a business, especially an online retail boutique,” Ashley Billings, the co-owner of the online apparel store A+Z Collections, told the news outlet. “But it takes a lot to maintain it. And that’s where the excitement of owning a business meets the reality of making it successful.”
The journey to success means confronting various challenges that go beyond race. With inflation and borrowing rates on the rise, businesses are having a harder time hiring staff and coping with supply chain delays, which affect operational costs.
Economists say those supply chain constraints have contributed to troubling inflation, which hit 8.5% in March, according to the Bureau of Labor Statistics.
These issues come during a time Black-owned small businesses opened at the fastest pace in more than two decades, the Washington Post reported.
Tyrone Foster, who owns a landscaping company in Portland, Oregon, told the Post he could have doubled the size of his business if he could have hired more people. He offered a $1,500 signing bonus to new hires and an equal reward to employees who helped bring in new hires.
His efforts yielded no results.
“Goose eggs! Nothing! It still didn’t move people,” Foster told the Post. “At that point, I gave up. There’s nothing else I could do.”
The racial reckoning brought on by George Floyd’s murder in May 2020 encouraged a number of Black people to start their own companies, which led to a spike in new businesses, according to CNBC.
Goggle searches hit an all-time high from the end of May through mid-June for the phrase, “black-owned businesses near me.” In the two months following Floyd’s death, 75% of Black-owned businesses saw an increase in customers.
Still, long-term success can prove elusive. Eighty percent of Black-owned businesses fail within two years, according to CNBC.
“We believe in buying Black, and we are counting on that mindset from everyone to help all these new businesses thrive,” Billings told NBC News. “We have the buying power to do that.”
TheGrio is FREE on your TV via Apple TV, Amazon Fire, Roku, and Android TV. Please download theGrio mobile apps today!
The post After opening at a robust clip, Black businesses face tough headwinds appeared first on TheGrio.
