Why Is It Important To Support Black-Owned Businesses?

Why? Well, if you are seeing people celebrating and supporting black businesses and wondering about their importance, congratulations, you are on the right track. Because, as they say, wisdom comes from asking the right questions. And as someone with the purchasing power in their hands, you must know why you should spend your money purchasing from black businesses. Don’t worry; we will help you get the answer to “Why is it important to support black-owned businesses.” 

Why Do You Need To Support The Black-Owned Businesses?

More than 3 million black-owned businesses are running in the US currently. Yes, we know the number looks promising, but there are many other statistics to learn. Do you know that 58% of the total black-owned businesses have reported vulnerable or jeopardized finances after the Covid? It means more than half of the black-owned businesses struggle to stay in the market.

With 41% of black-owned businesses getting closed in 2020 and now half of the rest struggling to stay open, it’s time to help these businesses with vitality. Also, in 2022, black-owned businesses employed 1.3 million people. So, by supporting black-owned businesses, we are not only supporting the businesses to stay afloat but are also saving millions of jobs. 

Still not convinced? Let’s check the top 5 reasons to support black-owned businesses.

Top 5 Reasons To Support Black-Owned Businesses

Black-owned businesses are generating about $206 billion for the US economy. Also, these businesses are employing over 3.56 million people. Thus, the role of black-owned businesses is very substantial. Here are the top 5 reasons why you should support a black-owned business. 

Provide Equal Business Opportunities

Every business owner should get the same opportunities and help while starting a business. However, things are pretty different when we compare white businesses to black-owned businesses. How? As the data suggests, black-owned businesses are less likely to stay afloat after 4 years of their opening date. 

Other data suggests businesses owned by black women earn less than those owned by other women. Why does it happen? The reason is that black-owned businesses are less likely to get business financing, and more often, they get it at high-interest rates. Thus, these businesses face problems in upscaling their business and procuring more stock. How can you help? By purchasing from black-owned businesses, you become a conscious customer who is using their purchasing power for a cause. 

So, by making conscious purchases from black-owned businesses, you help them with a regular flow of money, and thus, they will be able to avoid sudden close-downs. Also, by using the continuous cash flow, black-owned businesses can become able to enjoy equal business opportunities as others.

Bridge The Racial Wealth Gap

When we talk about the racial wealth gap between black and white Americans, believe us when we say it’s huge. How are we saying it? Well, let’s check the statistics to prove us right. Do you know that the difference between the median wealth of white and black families is 21 times? It simply means, on average, every white family is 12 times richer than a black family in the US. 

Yes, you might consider this data as past and think that with all the support campaigns running for the black businesses, the situation must have improved. Well, sadly, the answer is “no.” Why? Because the latest statistics predict that with the current support black businesses are getting, the situation may not improve. 

Why? The support that black businesses are getting is the bare minimum in front of the challenge they are facing. So, what’s the challenge? A news report published by Prosperity Now and the Institute for Policy Studies in 2017 forecasts that the median income of black families can hit zero by 2053. 

No matter who we are and where we belong, no one wants to see black families hitting that road. Also, small businesses like black-owned businesses help build communities and strengthen them at the same time. Thus, by supporting and buying from black-owned businesses, you can create new opportunities for them to make savings, finance building, property investments, and build generational wealth.

Also Read: How To Shop Black Owned Business? Best App & Directories

Give More Power To Local Economies 

The best way to strengthen a local community is to strengthen their businesses. Wondering when there are banks, why do you need to do this job? Well, most often, banks discriminate between afro-american communities and other communities while offering small business loans. 

Wondering if it’s true? Well, in 2017, the Board of Governors of the Federal Reserve System submitted a report stating that more than 50% of black-owned businesses were turned down for loans by the banks even when the interest rates were twice of what they were charging from other small businesses. The statistics further concluded that whilst black businesses had the highest number of applicants applying for funding, less than 47% of these applications were getting funded. Furthermore, even after getting the full funding approved, the black businesses were 10% more likely to not acquire the full funding than the other communities. 

Wondering how you can help by making a small purchase? Well, as per statistics, consumer spending forms a total of almost 70% of the US economy. Thus, by directing the power you hold in choosing where and from whom to buy, you can target a percentage of this 70% to help afro-american businesses. And when many other conscious customers follow the same practice, the black-owned businesses and black communities can strengthen with the flow of regular finances. 

Increase Employment Within The Community

We have learned earlier that most black-owned businesses struggle to get financial support. Thus, most often, they don’t have adequate funds to upscale their business and manage their business alone. However, if black-owned businesses have a better flow of money, they will be able to upscale their businesses. And in the upscaling process, they will need more help which will, as a result, generate new job opportunities. 

These job opportunities are often filled by local people belonging to small communities. Thus, the flow of money within the local communities will increase, increasing their purchasing power and the standard of living. All of these activities, which will take place simultaneously, will create a loop that will not only help black-owned businesses but the US economy and the local communities in need in general. So, by making a simple purchase from a small black-owned business, you are becoming a part of a greater cause that will affect many lives positively. 

Celebrates The Black Culture & History

Most of the black businesses are inspired by the rich black history. And their main aim is to share that or uplift and support other black businesses in the community. ShopBlck.net is a big example of it, which is a black-owned black business and product listing platform working throughout the US. 

How does the business support other black businesses? Well, as we clarified that the business is a black business and product listing platform. ShopBlck.net provides black businesses a way to showcase their business and products throughout the US to a community of people who are interested in shopping from black businesses. As this community is filled with conscious customers who want to shop from and support black-owned businesses, businesses can find better and high-quality leads from the platform.