Minority Business Development Agency (MBDA) Undersecretary Donald Cravins Jr. speaks at an investment summit in Maryland on May 4. In 2021, the Infrastructure Investment and Employment Act established MBDA as a permanent institution. Ting Sheng – Bloomberg – Getty Images
In recent years, Black-owned businesses have grown at the fastest pace in more than 30 years, marking a pivotal moment on the path to economic equity. And while the recent surge in Black-owned businesses is evidence of the resilience and innovation of Black entrepreneurs, common-sense policies and empowering resources are needed to help them grow.
This economic recovery is deeply rooted in the national psyche. There is an inherent excitement in the Black community about entrepreneurship and creating something of your own. At the beginning of the pandemic, Black-owned businesses were closing twice as fast as other businesses. But surprisingly, he bounced back even faster, opening 28% more businesses than before the pandemic.
Black-owned businesses in the United States make significant contributions to the economy, generating $206 billion in annual revenue and supporting 3.56 million American jobs. Many of these companies are federal contractors, and many more are well-positioned to become contractors. A recent Rethinking Main Street survey found that small and medium-sized businesses with diverse operations generate at least $1 million in annual revenue, with one in three respondents (33%) generating at least $1 million in annual revenue, and nearly half (48%) It has been revealed that it has significant contracting capacity to generate at least 50%. From the contract. Our success is a catalyst for change, driving economic growth and fostering a more inclusive business environment. Closing the racial wealth gap by 2028 could add $1 trillion to the U.S. economy. By supporting Black-owned businesses, we invest in a more prosperous and just future for everyone.
While the economic contributions of Black-owned businesses are significant, it is important to recognize that these gains did not come easily. Black entrepreneurs apply for business loans at higher interest rates, but we receive loans at much lower interest rates than white entrepreneurs. Research shows that Black entrepreneurs are three times more likely than white entrepreneurs to report that their access to financial capital is negatively impacting their profits.
The path to success for Black entrepreneurs is often fraught with challenges and institutional barriers. When I started my entrepreneurial journey 18 years ago, I had very limited access to capital. Despite doing everything by the book and achieving high business numbers, I kept getting rejected. Despite our significant contributions, our businesses are still often undervalued and face hurdles that are less common in other communities.
Black businesses thrive when they are supported by laws enacted to help us succeed. Policies like the bipartisan Infrastructure Act not only fund projects to repair our nation's crumbling roads and bridges, but also include provisions to support Black businesses. The Office of Minority Business Development is now a permanent part of the federal government and plays an important role in providing technical assistance and capital to black-owned businesses.
The expansion of the child tax credit included in the American Rescue Plan was a game-changer for Black small business owners and their employees. The poverty rate for black children fell by 17.1%. This credit has helped us restart our workforce by allowing parents to pay for reliable child care with stable work schedules. Consumers also have more money to spend at local small businesses. It definitely gave some black entrepreneurs the financial stability they needed to launch their businesses. That's part of the reason I support legislation that restores the child tax credit for low-income families.
But policy alone is not enough to ensure the success of Black business owners. Mentorship within our community is essential. Without it I wouldn't be here now. My journey began at the age of 13 working at a local printing shop. Mentored and inspired by the work ethic of his black bosses, he started his own business at age 14 by making flyers for friends. After a few years, it evolved into the marketing company it is today. . Learning from people who look like me has shaped me into the entrepreneur I am today.
Consumers can also play a role in intentionally seeking out and supporting Black-owned businesses, whether it's with everyday purchases or large-scale investments, not just during Black History Month and Juneteenth, but all year round. is needed. Leading companies can create or participate in programs that provide funding and resources tailored to the needs of Black entrepreneurs.
As we reflect on the accomplishments of Black entrepreneurs, we must also look to the future. The boom in Black businesses is proof of what can be achieved with the right resources and the right support. This is a reminder of the continued need for policies and systems that foster an inclusive and thriving business environment for Black entrepreneurs.
By supporting Black entrepreneurship, we are investing in a future rich in diversity, innovation, and economic prosperity for all.
Shaundell Newsome is the visionary founder of Sumnu Marketing, co-chair of Small Business for America's Future, and a board member of the Las Vegas Chamber of Commerce. He is the 2023 Nevada Entrepreneurship of the Year Award Winner, in 2008 he is the SBA Small Business of the Year Champion, and in 2015 he is the SBA Nevada Family Business of the Year Award Winner. I received an award.
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