City pledges new commitments to grow Black entrepreneurship
Cyril Josh Barker | 8/27/2020, midnight
Black Americans make up 22% of New York City residents but account for only 2.1% of business owners, according to city data. As part of the City’s commitment to close the racial wealth gap and support Black-owned businesses, the Department of Small Business Services (SBS) released a Black entrepreneurship report and is using its partnerships to launch new programs for Black business owners.
The city’s new commitments invest in Black entrepreneurs. The BE NYC initiative aims to increase the number of Black-owned businesses in New York City with a focus on growing businesses in high-growth industries.
SBS is publishing “Advancing Black Entrepreneurship in NYC.” The report highlights the challenges Black entrepreneurs face when starting and growing their businesses and offers recommendations in four key areas including equitable access to financing, strengthening connections within the city’s Black entrepreneurial community, scaling Black businesses for long-term success and meeting the challenges of the economy of tomorrow.
“Black-owned businesses are certainly struggling, and helping them grow is part of the broader struggle for racial justice,” said J. Phillip Thompson, deputy mayor for Strategic Policy Initiatives and co-chair of the Racial Inclusion and Equity Taskforce. “The commitments made today will provide significant opportunity for these small-business owners to grow in new economies and lay the foundation for a more equitable future.”
In an interview with the AmNews, cabinet member Gayle Jennings-O'Byrne of the WOC (women of color) star Fund said investing in Black businesses is important because of the contributions they make to the city's economy.
“Black businesses bring a lot of products and services and they are some of the best employers we have in the city,” Jennings-O'Byrne said. “We have to value their impact in the city.”
Jennings-O'Byrne said the biggest hurdle Black entrepreneurs face is access to capital. Only 1% of venture funding goes to Black entrepreneurs, according to a study conducted by RateMyInvestor. A 2018 study by Harlem Capital found fewer than 100 Black founders who’d raised at least $1 million over approximately 10 years.
“Banks and loans, credit cards and PPP loans, all of these tools and financial vehicles that are supposed to be there for business are not there for Black-owned businesses. Access to capital is the biggest challenge,” said Jennings-O’Byrne.
Another issue facing Black entrepreneurs is the digital divide. While the digital divide is often associated with education, Black businesses often lack the tech tools to be able to offer goods and services online and marketing through social media. More than 70% of Black business owners indicated that they want assistance reaching more customers and growing their sales.
“It’s time to acknowledge that starting and growing a business is hard enough without the additional challenges of a system that feels built to hold you back,” said Ajay Banga, chief executive officer of Mastercard. “We have to stack the deck in favor of success for everyone.”
BE NYC’s inaugural partners will work together with the city to address the key challenges and respond to the recommendations in the report. The city plans to work with partners in the private and philanthropic sectors to make sure resources are being distributed equitably.