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Why supporting Black-owned businesses is crucial to anti-racism

Written by Nahla Davies

Nahla Davies is a software developer and tech writer that is passionate about banishing racial inequalities in the business industry. She is one of the few Black female coders and runs multiple groups helping Black students pursue a career in tech. Her goal is to hopefully inspire other Black marketers and startups to build businesses in their local areas.

Supporting local Black-owned businesses is an essential part of banishing racism from your neighborhood. The significant growth of Black entrepreneurs over the last few years was derailed by the Covid-19 pandemic, which disproportionately affected Black Americans. When parts of our communities are experiencing turmoil, it is important to empower our neighbors by helping them rebuild after extreme social and economic hardship. This is especially important when it comes to supporting people of color because of the effect of systemic racism in the U.S. 

Systemic racism creates an environment of financial barriers that are very difficult for Black small business owners and other minority-owned businesses to overcome, which is why supporting local Black-owned businesses is an essential part of the effort to level the playing field. A

Shopping local helps close the racial wealth gap

When it comes to accumulated wealth, Black families historically make less money for the same work in the United States. In fact, the median wealth of white families is up to six times higher than that of Black families. This racial wealth gap impacts the overall economy in addition to local economies and minority families. 

Furthermore, 65% of Black residents in the U.S. fall below the national average in more than just income. People of color are also less likely to have access to quality healthcare and employment, trapping them into an impoverished state that is incredibly difficult to climb out of and often leaves them dependent on government-funded programs to stay afloat. 

Even owning a business does not provide Black Americans with the same benefits as white Americans. The average Black American business owner’s equity is worth half as much of the average white American. This is because when a person of color opens up a new business, they have to give even more of their business equity to investors to get started. This is also why when you shop local, your dollars have an immediate and direct impact on the lives of Black business owners. 

How to support Black-owned businesses

Eradicating racism starts at the community level. Supporting Black-owned businesses long term is one of the most direct ways that you can have an impact on fighting against racism. 

August is Black Business Month and while supporting Black-owned business should be an action that happens every day, here are some ways to support them consistently.

  1. Make a habit of searching for Black-owned businesses when you are shopping online. Instead of sending your dollars to big online corporations, you can make a big difference in someone’s life by buying from a small online business instead. 
  1. As a result of high unemployment following the start of the pandemic, many Black professionals were forced to go online to look for work. Keep this in mind if you ever need work done online yourself (such as writing, proofreading, graphic design, or VA work). Most starting freelancers charge $20 to $30 an hour for general tasks and have experienced backgrounds, so keep this in mind. 
  1. Post about your favorite Black-owned businesses on social media and leave good reviews. Not only does this make you a part of that community, but it also helps their business get noticed to generate future income. If you instead receive service that doesn’t meet your expectations, leaving a note for the manager after your visit or even posting a suggestion instead of a negative review is a more supportive way of communicating your experience with a Black-owned brand. 
  1. If you like the products that you try, add them to your list of weekly stops and recommend them to your friends by posting on Nextdoor and social media. This is a great way to funnel a consistent stream of support to your Black neighbors. Word-of-mouth testimonials help build trust in a business and increase the likelihood that a new customer will give it a try.
  1. Support them without expecting anything in return. Asking for discounts, or expecting perks for consistently visiting can actually do more harm than good. It costs a lot of money to keep a business running, and during these times of economic strain, every penny counts. 
  1. Keep an eye out for local Black-owned businesses to try. Support your local economy and when you hear about new local businesses in your area, go for a visit and see if they have something you might be interested in. NextDoor makes it easy to stay connected with your neighborhood by sharing recommendations, getting updated when new local businesses open up, and even have deals delivered right to your phone.

Consistently shopping locally at Black-owned businesses alone can drastically change the financial landscape for people of color, but closing the wealth gap requires the continued effort of allies to communicate to their leadership that there needs to be better legislation that supports small businesses and makes it easier to obtain funding. 

But there is good news for those businesses that have fallen victim to socioeconomic barriers. According to financial expert Tim Fries of the Tokenist, there are still plenty of options to secure funding that have low barriers to entry and don’t require a high credit score either. 

“We’re way past the point where we need to rely on banks and the government for funding,” says Fries. “Numerous online lenders provide cheap loans quicker than big banks – and more importantly, these alternative lenders do not require high credit scores.”

Lending options such as these have proven to be very helpful for minority-owned small businesses hit hard by the pandemic. But again, remember that business loans are only a shorter-term solution to help keep business float. Ultimately, small businesses are reliant on support from their local neighborhoods and communities to stay up and running over the long term. 

Elevate Black-owned businesses in your neighborhood

Speak up when you see discrimination taking place. Talking about race with your friends and neighbors is an important step towards understanding and empathy. Build lasting connections by having tough conversations with an open mind and open ears. 

Subconscious bias has an effect on everyone and it takes a conscious mental effort to change the way we think on a deeper level. Building an inclusive community means also being mindful of areas that bias can have a harmful impact on the lives of minorities. 

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