August is National Black Business Month, a time to recognize and celebrate the important contributions from Black-owned businesses. As more people look for ways to support Black communities, 75 percent of Black small businesses have seen an uptick in customers since the beginning of June, according to a new survey commissioned by Groupon and the National Black Chamber of Commerce. While the increase in business has been welcome, particularly in light of the devastating economic impact of COVID-19, the study also reinforced the inequities that Black entrepreneurs continue to face.
The new poll surveyed more than 400 Black small business owners to better understand the challenges they face, why they decided to become entrepreneurs, how they achieved success and the most important issues they want to see addressed in the 2020 presidential election.
Overcoming challenges
According to the business owners who participated in the survey, 80 percent said they faced more challenges launching their businesses due to their race. Nearly 60 percent of respondents said they experienced some form of racism or bias, and half of the survey participants said that the government stood in their way when it came to opening their businesses. Approximately three out of four Black business owners said that they’ve had fewer chances due to a lack of capital investment and resources.
Disproportionate COVID impact
The disparities between Black and white-owned businesses were highlighted by the devastating economic impact of COVID-19. While 76 percent of Black-owned businesses said they were negatively impacted by COVID-19, only 5 percent of those that applied for a Paycheck Protection Program loan received one. According to the National Bureau of Economic Research (NBER), as many as 41 percent of Black small businesses were forced to close permanently due to COVID-19 compared to just 17 percent of white-owned businesses.
Becoming the boss
Seventy-nine percent of survey respondents said they’re more proud than ever to be a Black business owner. Black business owners said that pursuing their passions, gaining more control over their futures, being their own bosses, having flexible schedules and helping their local communities were the top five reasons why they went into business for themselves.
Achieving success
Nearly half (47 percent) of the survey respondents said it took between three and six years for their businesses to get off the ground and become successful. While 84 percent said they were held to a different standard than other ethnicities, putting in hard work, taking pride in the quality of their product or service, having an innovative business idea, hiring the right people and building strong community relationships were identified as some of the keys to their success.
Making their voices heard in the 2020 election
Most Black business owners, 74 percent, are hopeful about the future of race relations in America, but they still want to see the issue addressed by the 2020 U.S. presidential candidates. The top issues that Black business owners want to see addressed in the 2020 campaign are race relations, small business support, police brutality, the economy and healthcare.
Taking action
Groupon, which has seen searches for Black-owned businesses increase more than 300 percent on mobile since early June, is urging consumers to celebrate National Black Business Month by supporting businesses in their local communities as well as by making a donation to help provide new Black entrepreneurs with much needed access to capital. The company has a curated collection of hundreds of Black-owned businesses across the United States and will be featuring these merchants across its mobile, online and social channels throughout the month of August. In addition, the company has partnered with Kiva.org––a renowned crowdfunding platform––to raise funds from consumers in support of a Black-owned business fund that will help create opportunity and unlock investment capital for Black merchants across the U.S.
Throughout the month, Groupon will continue its #PassTheMic social media campaign where the company has turned over its collective U.S. audience of 22 million followers to amplify and uplift Black voices and merchant success stories.
In addition, Groupon is announcing a month-long series of virtual events hosted in partnership with its home state, the state of Illinois, to shine a light on challenges faced and to find ways to support Black-owned businesses across the country.
“We’re thrilled to celebrate Black Business Month as this community has been disproportionately impacted by COVID-19 and traditionally suffers from a lack of access to adequate capital and resources,” said Aaron Cooper, Interim CEO at Groupon, in a news release. “One of the many ways that we’re translating our support for Black Lives Matter into meaningful action is by highlighting and championing the success of Black-owned businesses and looking for more ways to connect them to our diverse customer base. We hope that everyone will join us in supporting the more than 2 million Black-owned businesses in this country at a time when they need us the most.”
Upcoming virtual events
To help bring more attention to the disparities Black entrepreneurs face and resources available to help their businesses succeed, the company is partnering with the Illinois Department of Commerce and Economic Opportunity (DCEO) to offer three virtual panel discussions for merchants during the month of August that bring together a national audience of government officials and Black business community leaders.
“Across Illinois, our Black-owned businesses contribute to the vibrancy and success of our communities – yet we know that they continue to face long-standing obstacles to running their businesses, all made even more challenging by COVID-19,” said Michael Negron, acting DCEO director, in a news release. “To protect our Black businesses, Illinois has continued to deploy resources to lift up businesses hit hardest during the crisis, and to continue leveling the playing field for Black businesses. On behalf of Governor Pritzker, we thank Groupon for advancing the conversation around how to remove barriers and better support Black businesses in Illinois and around the country.”
The three panel discussions will be held on the following dates:
- Doing Business with Government: Fostering an inclusive and competitive business environment that will help Black business enterprises increase their capacity, grow revenue, and enhance credentials. (August 13)
- Black Business Lending––Accessing Capital & Tax Incentives: How Black businesses can access financial resources and tax incentives to scale and grow a sustainable business that increases overall economic opportunity and growth in communities of color. (August 20)
- Navigating COVID-19 and Civil Unrest––Federal and State Financial Resources for Black Businesses: How Black businesses can take advantage of federal/state COVID-19 grant/loan relief programs and rebuild damaged businesses post-civil unrest. (August 27)
Get more information on the National Black Chamber of Commerce here.
Find Black-owned businesses that you can support in your community here.
