Are there still practices and procedures that discriminate and create unequal access or exclusion in small businesses in the United States (and elsewhere) based on skin color? Sadly, yes. Despite this, a recent study shows that many Black small business owners look forward to higher profits in 2023.
As part of raising awareness during Black History Month, Goldman Sachs 10,000 Small Businesses Voices released the results of a new survey showing how, despite continued systemic barriers, Black-owned small businesses are optimistic this year.
What did the survey find?
A total of 1,838 Goldman Sachs 10,000 Small Businesses participants across 48 US states were surveyed, including 325 Black small business owners. David Binder Research and Babson College carried out the research.
The findings include Black-owned small businesses reporting plans to create more jobs in 2023 than their peers, and they are optimistic about profit increases as well despite the challenging economic environment. Below are specific figures.
Eighty-one percent of Black small business owners are confident about the financial trajectory of their business this year, which is 13 percent above the optimism level (68%) for the overall small business community. Moreover, 78 percent of Black-owned small businesses expect higher profits in 2023, 18 points higher than the national average (60%).
Surveyed Black business owners also expect to create more jobs. 67% of Black small business owners anticipate creating new jobs internally in 2023, 16 points above the national average (51%).
But systemic problems continue
But Black-owned small businesses still face systemic challenges. Thirty-seven percent of Black small business owners find it difficult to access new capital or financing, 14 percent more than their peers.
Additionally, 45% of Black small business owners increased their personal savings in the last three months to keep their business running (versus 33% overall).
“This Black History Month should be a celebration of the success of black-owned small businesses in this country,” said Jessica Johnson Cope, Goldman Sachs 10,000 Small Businesses Voices National Leadership Council Chair. “But Black business owners and entrepreneurs continue to face systemic barriers compared to their peers.”
The quest for change
Those barriers are a big reason why Goldman Sachs 10,000 Small Businesses continues to press Congress to approve small business administration for the first time in 23 years. Modernization improves access to capital and financing options for Black-owned small businesses and simplifies the certification process for minority-owned enterprise programs.
Supporting Black-owned small enterprises is essential. It builds the local economy and celebrates diversity.
Strengthening relationships and closing the racial wealth gap will only happen if we are in this together, recognizing talented owners like Nikki Watson, owner of The Design Quad, and raising them up.
It can be as simple as changing our buying habits. More people are looking at choosing sustainable brands for the planet. Let’s also choose Black-owned stores and brands to help them grow for sustained economic development. Consider doing so not only during Black History Month but also far, far beyond it.