Black business month, founded in August 2004, shines a spotlight on the 124,551 Black-owned businesses across the country. While nearly 30 percent fall within the Health Care and Social Assistance sector, the highest percentage of any minority group, emerging businesses of all sectors are made possible given access to funding. Securing capital has historically been a challenge to Black entrepreneurs, navigating the perils of discriminatory lending practices.
After overcoming the initial challenges of funding a business, unexpected disasters like the pandemic have served as major hurdles for Black businesses. According to a Stanford report on the effect of COVID-19 on small business owners, between February and April 2020 there was a 41% drop in the operation of Black-owned businesses. The wrath of the pandemic left many businesses fervently seeking funding to stay afloat.
Tay Sweat, self-made Black investor, millionaire, and founder of Secure The Bag With Tay, shares the below tips for Black Americans to secure funding and investors to launch large-scale businesses.
1) Learn The Stock Market: Can’t get anyone to fund you? Fund yourself! Read books, take an online class to learn about the stock market. You may still eventually need angel investors, but you can fund your first entrepreneurial step yourself.
2) Build Your Support System: One of the biggest challenges that black entrepreneurs face, they often don’t have the support system or precedent that a non-minority business owner might have. Reach out to the 20 most successful people you know, befriend them. When it comes time to ask for financial support, it won’t feel like an estranged relationship.
3) Invest In Yourself: If you don’t have a built-in support network, make one, even if you have to buy it. Join online classes, networking events, Black associations, really, anything that is going to get you in front of others in your niche or community. (Even if these efforts cost you, consider it an investment in yourself and ultimately, your business).
4) Crowdfund it: Don’t just post your business to a crowdfunding page and hope for the best. Market your idea– and apply to include it on the designated support “Black Owned Businesses” sub-page, like this Support Black Businesses page on gofundme.com
5) Look For Nonprofits: Runway Capital and Collab Capital and EnrichHer are just a few of the non-profit organizations funding and loaning to Black entrepreneurs. There are dozens, make sure to do your reach, get your documents in order and apply
Through access to venture capital, loans, grants, and private equity, the right resources for black businesses to thrive are out there. The Funding Resources guide for black businesses breaks down the top resources to secure funding, providing an in-depth list for your business’s financial growth.