The Contributions of Black Entrepreneurs are at the Forefront of Black Business Month 2022
Across the U.S. economy and countless communities, Black entrepreneurs have made significant contributions through their businesses. Based on figures from the U.S. Small Business Administration (SBA), there are more than 3.2 million Black-owned businesses that employ over 1.18 million workers in the U.S., according to the 2018 Annual Business Survey and Non-employer Statistics by Demographics. Despite these successes, Black entrepreneurs have faced discrimination and have struggled to get funding for their businesses.
While the contributions of the African American community are honored during Black History Month every February, August is Black Business Month, which celebrates incredible business owners and the obstacles they’ve overcome. But who started Black Business Month, and what’s its significance?
Who Started Black Business Month?
The history of Black Business Month goes back two decades. Black Business Month was established in 2004 by entrepreneurs Frederick Jordan and John William Templeton. The purpose of establishing a month for Black business owners was to drive the policy agenda for Black entrepreneurs through the participation of community leaders, local politicians, and venture capitalists.
As an entrepreneur himself, Jordan related to the plight that many minority business owners have historically faced; in 1969, he struggled to gain financial backing and funding when he began his own firm in San Francisco, Calif. This struggle is unfortunately too common and continues today, but Black Business Month celebrates beating the odds, which increases its significance.
The Importance of Black Business Month
Supporting Black-owned businesses as a customer or a franchisor shows a commitment to diversity and inclusion, which increases Black entrepreneurship and minority business ownership. Simply educating the public about the obstacles that minority businesses still face is also important. For example, Blacks have historically seen higher unemployment rates in comparison to whites. Additionally, the median wealth held by White to Black families is 10:1, according to a study by the Joint Economic Committee.
A way for entrepreneurs of all backgrounds to increase generational wealth is through franchising. By investing in a franchise, business owners benefit from a proven system and don’t have to start from scratch. But how do franchising institutions specifically reach minority entrepreneurs, and what does “support Black business” mean?
Black Entrepreneurship and Franchising
The International Franchise Association (IFA) works to increase diversity, equity, and inclusion (DEI) initiatives with its DiversityFran program. Through this program, IFA members are assisted with reaching emerging markets and recognizing the importance of educating underserved communities in business ownership to increase generational wealth and job opportunities. The IFA has also established the Black Franchise Leadership Council, which is part of its Diversity Institute, to create a network for African American business owners. Through this network, Black business owners are empowered to understand the meaning of what it means to be supported.
What Does ‘Support Black Business’ Mean?
Supporting Black businesses doesn’t only mean frequenting a brand for the sake of economic exchanges of goods and services; when you support Black businesses, you’re supporting the community’s self-sufficiency, unity, and pride. As many entrepreneurs can attest, owning a business is more than just making a profit; it’s about giving back to the community through job opportunities and great service. This is especially true for franchisors, who have several ways to support Black entrepreneurship.
How Franchisors can Support Black Entrepreneurship
- Hold Vendor Partners Accountable
Franchisors have a lot of power regarding who they do business with. A great way to advance DEI initiatives is to work with vendors with the same values.
- Follow the Hashtags on Social Media
Business owners understand the importance of social media to grow their brands. To increase awareness of Black-owned businesses, hashtags to follow include: #ShopBlackOwned, #Blackmakers, #Blackowned, #SupportBlackBusiness, and #NationalBlackBusinessMonth.
- Shop Locally
Many Black-owned enterprises are smaller, local businesses and not big-box stores. When franchisors buy supplies or go out to lunch with staff, they can consider going to locally Black-owned restaurants or stores.
- Provide Financing Options
Since many franchise owners put much of their life savings into the business, funding can help them achieve their dreams. Franchisors can provide in-house financing options or have partnerships with third-party lenders. Although less than 10% of franchises are Black-owned and minority business owners have historically struggled to access capital, Black entrepreneurship is becoming more and more prevalent. Many celebrities have been leading the way for hopeful Black business owners, including Michael Jordan and Shaquille O’Neal. Institutions like the SBA have embraced DEI initiatives to ensure anybody with the will and ability to start a business has access to capital and educational resources.
Takeaways of Black Business Month 2022
Black Business Month comes along every August to honor the entrepreneurs who’ve overcome obstacles to achieve great success. Franchising has proven to be a great path for these business owners. Franchisors can support these businesses by following them on social media, shopping locally instead of going to the box-big stores, and holding business partners accountable.