Beating the Odds: How More Black Businesses Can Find Success
updated June 5, 2017
Open any magazine or visit any website and you’re sure to find something like, “5 Small Businesses You Can Start Today” or… “How to Turn Your Passion Into Profits” or a similar headline that beckons you to trade in your punch card for the coveted “Open for Business” sign. And why not? Why not take the plunge into small business ownership?
A Look at the Numbers
When it comes to Black business ownership the numbers prove that it is possible. Just take a look at the last U.S. Economic Census (2011). As of 2011 Black-owned businesses accounted for 2.6 million of the businesses in the United Sates and generated $187.6 billion in revenues.
With numbers like these, it’s no wonder why many of us aspire to start our own businesses. After all, we want our piece of the pie! But get this… those 2.6 million businesses only accounted for 9.5 percent of all businesses in the United States and generated just 1.3 percent (that’s just over 1 percent–that crazy!) of U.S. revenues. So what gives? Where are all of the (successful) Black-owned businesses?
What’s Keeping Us from Succeeding?
Talk about an uphill battle! Black business owners face the same obstacles as all other businesses, such as proper planning and scalability–the ability to grow exponentially. Add to that the inability for most to reach, let alone succeed with “cross-over” (non-Black) consumers, and Black businesses certainly have a tough journey ahead of them.
This doesn’t mean that Black entrepreneurship is out of your reach. It’s definitely not impossible–as proven by the existing 2.6 million Black businesses as of 2011. Quite honestly, there is no secret success formula. As long as you stay committed and focused, there is a market for almost anything. Heck–as proven by reality television and gossip sites– even drama sells!
Have a Plan B
Business plan, marketing plan, financial plan–you will need an iteration of all of these–but the most important plan that many neglect is a contingency plan (or as I like to call it, the “Aw Shoot” plan). What will you do when something happens–because at some point something will happen. I’m not just talking about the insurable stuff either. Let’s say your merchant system decides to go down… FOR A WHOLE DAY. Do you have a back-up plan? Cash sales only account for about 25 percent of all point of sales transactions. Unless you have another means of accepting credit and debit card transactions, you might as well turn off the lights and go home for the day.
Start Slow, but Don’t Get Stuck
Is your business scalable? Now we aren’t talking Apple or Google here, but even small businesses should plan for growth. If someone called you with a $100,000 order right now, could you handle it? How about $10,000 or even just $1,000..? Unfortunately, too many business owners plan to start off small, but end up stuck in small thinking. You see it all the time, delays in order fulfillment and the classic overbooked hair salon–the demand is there, but the supply (and service!) is lacking. If you haven’t planned for growth, you are merely surviving (can you say, “Good-bye financial independence”?) and doing yourself, your business and your customers a great disservice.
Buy Black? Sure, but Who’s Buying
This may offend some, but it has to be said… Black people do not buy Black. Check out the study conducted by Nielsen, in 2013 Black buying power was $1 trillion. Do the math. Blacks are spending $1 trillion annually, yet Black businesses are making less than $300 billion a year. The lesson? Market to a more diversified audience. This is not a campaign to abandon the Black consumer. Just be smart about your marketing. Blacks comprise less than 15 percent of the U.S. population–no matter how you look at it, there aren’t enough fish in those waters. If you expect to succeed in business, you will have to cast your reel in a much larger pond.
Businesses open all the time. Though it takes work, Black businesses can sustain and succeed with proper planning and a strategic approach to growth and marketing.
Does your Black business have staying power? Do you have a formula for increasing profits or sustaining during lean times? The MYBB community would love to hear your story! Visit our CONTACT page for details on how you can share your story and have your business profiled here!