Three Strategies for Advancing Equitable Business Opportunities for Black Entrepreneurs
Entrepreneurship can provide pathways to building wealth. But for Black entrepreneurs, a harder road lies ahead because of systemic barriers to credit, markets, and economic and social capital. For example, we know that White-owned businesses nationwide are valued 11 times higher on average than Black-owned businesses. Because of our unwavering commitment to clearer pathways to financial stability and wealth for households of color, Prosperity Now, with the support of Annie E. Casey Foundation’s Atlanta Civic Site and The Kendeda Fund, recently facilitated a community of practice in Atlanta. This cohort of professionals came together over the course of several months to learn from one another and to identify strategies for strengthening Black-owned businesses.
The data make clear that although Black Americans are no less likely to own businesses than their White counterparts, those businesses don’t offer the same returns on the entrepreneur’s investment. The average Black-owned business is valued at $58,085, but for White-owned businesses, that number jumps to $658,264—more than 11 times greater. Lower values mean that these businesses don’t provide the same wealth-building opportunities that White business owners enjoy as the result of their entrepreneurial efforts.
Despite Atlanta’s reputation as a burgeoning mecca for upwardly mobile African Americans, its business scene exhibits the same inequities as other American cities. An equitable future in Atlanta partly depends on ensuring that entrepreneurship is a pathway for financial security for entrepreneurs, their employees and their communities. This means transforming, aligning and focusing the support to Black entrepreneurs to reduce systemic barriers in accessing capital and markets, create social networks for growth and build financial resilience.
During our engagement with the community of practice, which included 10 organizations from the Atlanta region committed to strengthening Black entrepreneurship, we identified three key strategies for supporting Black-owned businesses to hire one additional employee or pay a living wage. These strategies include:
Creating data-sharing opportunities in order to use resources more efficiently and overcome barriers preventing us from more deeply understanding the drivers of success for Black enterprises.
Establishing an Economic Development & Entrepreneurship Institute focused on building the capacity of community organizers to engage in advocacy that increases access to economic development opportunities.
Expanding procurement and contracting opportunities for African American entrepreneurs to expand the markets that can be served by Black-owned businesses.
Our hope is that these strategies spur local action to support Black-owned businesses, leading to increased revenues and employment and improved individual, enterprise and community outcomes. To learn more, download Advancing Collective Prosperity through Entrepreneurship in Atlanta.