According to a recent study of small business owners, inflation and supply chain issues are the biggest challenges entrepreneurs face, however, Black businesses are facing other unique hurdles that are specific to the Black community.
NBC News reports that in addition to supply chain issues and rising inflation, the study shows Black businesses and entrepreneurs are also dealing with structural inequities built into the Paycheck Protection Program (PPP), in addition to the struggles Black men and women face in the banking industry.
“We know that when something is bad for all small businesses in America, it’s worse for Black-owned businesses,” economist Nicholas J. Hill, the Dean of the School of Business at HBCU Claflin University told NBC. “So, if there’s any type of economic shock or supply shock, like the pandemic, it is going to hit us a lot harder.”
Black businesses still struggle to get loans from large banks, even if they have good credit and a solid financial history. As a result, Black entrepreneurs are forced to go to Local Initiatives Support Corporations (LISCs) and Community Development Financial Institutions (CDFIs) to get funding. Maya Barfield, who owns an animal hospital in Dallas, experienced it when she and her husband were denied bank loans, but received one from an LISC.
“You put together a great portfolio and it’s not enough,” Barfield told NBC. “A process that should take 30 to 45 days took us six months. It was exhausting. Our white counterparts who are on equal footing had no such problems.”
To help Black businesses and entrepreneurs with financing, a number of Black celebrities and entrepreneurs, including tennis star Serena Williams and musician Pharrell Williams, have started venture capital funds in order to provide seed funding, technical support, and more to Black businesses.
Another issue is that the motivations of Black workers, especially young ones, are changing. According to a survey by Future Forum, Black workers are looking for more flexible work schedules, instead of the traditional 9 to 5 workday. The survey reports that 83% of Black workers are looking for a better work-life balance, which, according to the survey, is creating a labor shortage for Black businesses serving Black communities.
Keith Millner, who owns a Jersey Mike’s sandwich shop with his wife and two friends in an area of Atlanta with a large Black demographic and workforce, said the statistic is in line with staffing issues they’ve experienced.
“Their freedom and flexibility in their schedule are more important to them than a regular paycheck,” Millner told NBC. “And so, they will drive Uber or Lyft. They will take the occasional odd job or they’ll go work for a moving company for a day or two or they’ll take four roommates so that they can split their rent. They’re making a lot of different choices from a lifestyle standpoint. And it impacts business.”