“There are only 1.7% of federal contracts [obtained by Black businesses] … that’s where that disparity needs to be addressed so that they can grow,” Small Business Administrator Isabel Guzman tells theGrio.
To the delight of consumers eager to save this holiday season, there are many bargains and a lot of shiny objects to attract shoppers and their dollars. Today is Small Business Saturday, a marketing initiative geared toward encouraging spending with small businesses across the country. Moreover, in an effort to encourage support for Black-owned businesses, the day has also become known as Black Business Saturday.
For many small business owners, the month of December and the holiday buying season is a make or break for their balance sheets. This especially holds true for Black-owned businesses.
During a recent interview with theGrio, Small Business Administrator Isabel Guzman says Black businesses make up over 10% of all businesses in the United States. However, a large proportion of Black-owned businesses are sole proprietorships, meaning they are usually owned and operated by one individual. Scaling these businesses and setting them up for success is key for the Small Business Administration.
“We want to make sure that they have growth opportunities,” says Administrator Guzman, who shares that the SBA is working on securing more federal contracts with Black-owned small businesses. “There are only 1.7% of federal contracts [obtained by Black businesses] … that’s where that disparity needs to be addressed so that they can grow.”
During the first year of the COVID-19 pandemic, at least 40% of Black businesses shut down, shaking the Black American economy and the overall national economy. As data shows, a majority of these businesses did not receive funds from the Paycheck Protection Program (PPP) – federal money poured into mostly small banks during the Trump administration to loan to businesses in need of cash flow to stay afloat during the pandemic.
As businesses and the U.S. economy fight to bounce back from the impacts of the pandemic, Guzman said Black and minority businesses “constantly need that support.”
“Not only in our pocketbooks but even in our social media platforms … reminding people to shop with them or dine with them or entertain with them is what helps propel them forward every year,” says Guzman.
Marc Morial, president of the National Urban League, tells theGrio that “strengthening Black-owned businesses is a strategy to close the racial wealth gap.”
In years past, Black Business Saturday received unprecedented support. Understanding the economic significance of his presence by purchasing at a Black-owned business in Washington D.C., then-President Barack Obama made it a priority to patronize a Black coffee shop to show support and spur others to do the same. After leaving office, Obama has continued to encourage patronage of Black businesses.
Fast forwarding to 2022, Guzman tells theGrio that “spending that we do on small business Saturday on Black [Business] Saturday is really critical for our businesses just to make sure that they can survive and position themselves for growth into the new year.”
Morial also emphasized that consumers “must promote and participate in supporting Black-owned businesses by spending our dollars on the goods and services that they produce.”
“During the high volume holiday shopping season, I urge all to shop online or in person at a Black-owned business,” he adds. “Do your research to locate Black-owned businesses in your community, as well as online.”
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