Representation and diversity in business are hot topics, especially around holidays such as Juneteenth. Unfortunately, the conversation often ignores the incredible history of Black entrepreneurship, and the urgent action needed to empower Black founders today.
While the recent pandemic increased the economic strain for populations around the world, in America the Black community experienced disproportionately severe impacts.
However, despite the added challenges, Black business ownership actually increased 30% by 2022, compared to pre-pandemic levels.
The more you learn about the perseverance of Black entrepreneurs over the course of history, the less surprising that number becomes.
Even in the time before slavery was outlawed in 1865, the Black community participated in entrepreneurialism. In many states, entrepreneurship offered a rare chance at escaping the inhumanity of enslavement.
Countless stories demonstrate the tenacity and business acumen of pre-abolition Black business owners:
In North Carolina, Lunsford Lane (known as “the tobacconist”) amassed $1,000 selling his popular prepared tobacco blends and handmade pipes—enough to buy his freedom in 1835.
Enslaved woman Elizabeth Keckley used her skills as a seamstress to purchase her freedom in 1855, later becoming a dressmaker for Mary Todd Lincoln.
Biddy Mason walked 2000 miles from Georgia to California, where she won her freedom in a landmark 1856 court case and went on to become one of California’s first Black women to own land. She wisely utilized much of her land as a “parking lot” for visitors in the area to keep their horses and carriages, eventually earning enough money to purchase a large commercial building. She amassed a fortune of $300,000—worth about $6 million today.
In the 20th century, the golden age of Black-owned businesses emerged in the United States. After Booker T. Washington founded the National Negro Business League (NNBL), the talents and innovations of Black Americans were promoted and recognized within the community.
The NNBL worked to provide economic development as an avenue to equality, focusing much of their energy on empowering the Black community with financial literacy.
Prominent members of the league included business leader C.C Spaulding, contractor John L. Webb, and businesswoman Madam C.J Walker, who shattered the glass ceiling by becoming the first female self-made millionaire in America.
The NNBL went on to establish 600 chapters across the U.S. to support Black entrepreneurs, helping them form and expand their businesses. The league is still headquartered in Atlanta, Georgia, and continues to foster financial literacy and contribute to the advancement of Black enterprise.
The thriving Black business community did not go unnoticed to domestic terrorists in the U.S., who were determined to reverse this miraculous progress.
By the early 1920s, a prosperous neighborhood in Tulsa, Oklahoma, had earned the reputation as the Black Wall Street of America. The Greenwood District had developed its own self-sustaining economy, as Jim Crow laws forced the separation of Black capital from that of white communities.
Unfortunately, the Ku Klux Klan was also thriving in Tulsa, with prominent supporters in law enforcement and the government and growing ranks of violent members. These white supremacists viewed Greenwood as a threat, and soon took action that would erase decades of progress and destroy an entire community.
In an act of unimaginable racism and evil, a white mob killed hundreds of residents and burned down more than 1,250 structures including homes, businesses, churches and schools.
The damage was irreparable, both in property and in spirit. Insurance companies denied payout claims on the basis of the massacre’s official categorization as a “riot,” and Black residents and business owners were denied any government funds to rebuild.
Though by the 1960s there were signs of a return to Black Wall Street, city planners once more found a way to erase progress through a trend called “urban renewal.”
Policies like rezoning and eminent domain tanked property values in Greenwood, and new highways cut through once-charming neighborhoods and business corridors. Dealing the final blow, redlining kept new buyers from the area.
Tulsa was just one incident…why is it so pivotal to the understanding of Black enterprise?
It’s important to realize that what happened in Tulsa also occurred at a smaller scale, directed at Black wealth and success across all of America.
Though the Tulsa Massacre was dramatically consequential, Black businesses throughout the U.S. have, historically and presently, been targets of violence and hate.
Redlining and the devastation of “urban renewal” destroyed countless communities. Gentrification continues to push Black businesses and homeowners beyond the margins of opportunity.
In effect, Black Americans have been denied the opportunity to build generational wealth, and in turn, the creation of businesses and jobs that distribute that wealth to an entire community.
Explore: Credit Disparity and Wealth Inequality: What Caused It, and How We Can Fix It
Policies and laws have been enacted with the goal of reducing discrimination against Black Americans in education, business, and more. Technology has advanced and financial landscapes have changed.
Yet still, countless hurdles make the path to success a near-impossibility for many Black-owned businesses.
Despite the glaring disparities, a heroic resiliency is evident in the rise of Black-owned businesses and the impact of Black innovators in the century since the Tulsa Massacre.
As America continues to recover from the deep atrocity of slavery and rewrite the laws that have disenfranchised the Black community, addressing inequity is often most effective at a local level.
A recent study showed that 8 out of 10 Black businesses failed within the first 18 months of operation. When a Black-owned business closes its doors, the racial wealth gap deepens.
The sky-high business failure rates can usually be attributed to lack of capital to scale and overcome early obstacles. Black entrepreneurs are significantly less likely to secure venture capital than their white counterparts. And when they do, funding is usually in much smaller amounts and includes much higher interest rates.
Though it may seem like an insurmountable challenge, individuals can make an impact by buying Black whenever possible, and helping to promote Black businesses through positive reviews and word-of-mouth.
Recently, greater awareness about the importance of buying Black has been promoted in the media and in grassroots communities. In the face of glaring racial injustice, it’s critical that society works together to develop an economy that reflects the American promise.
According to a 2020 report, only 4.3% of America’s 22.2 million business owners are Black.
Shifting how and where we spend our money can help revive Black economic power and build a foundation of change for future generations, but more can be done to level the playing field.
Governments (federal, state, and local) can increase initiatives and investments in businesses owned by marginalized groups and in minority-dominated communities.
Funding and guidance for Black entrepreneurs can also benefit historically underrepresented and underserved Black founders.
Firms like 1863 Ventures seek to inject capital into Black and Brown-led startups, along with the resources and advisors that a new company needs to be successful.
Groups like the Minority Business Development Agency connect Black business owners with grants, education initiatives, and other helpful business tools.
But there’s still a need for more support to upend the disparity in Black business ownership.
There’s no one-size-fits all solution, but by buying Black and supporting resources for Black entrepreneurs, we can begin to turn the tides.
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