The simple answer to this is that there aren’t many black entrepreneurs. EXCEPT that’s false. To the contrary, there were 10,000 black-owned businesses employing at least one member of staff in London alone, noted in Ready for Business, and I suspect that number has only increased since the report. Even with numbers like these, Black-owned businesses are still disproportionately outnumbered in comparison to other ethnicities. The fact is, Black-owned businesses face many socio-economic challenges others do not.
In this blog we’ll attempt to uncover some of the reasons why Black-owned businesses are underrepresented in the UK
We’ve all heard “money makes the world go round”, “money talks” and other similar turns of phrase centred around cash. Though arguable to what extent, we cannot deny money plays a very important role in our everyday lives.
The economic and racial inequality starts where many other things do – at home. Black households have 10-20p for every £1.00 of wealth in a white household as noted in The Colour of Money. Needless to say, when it comes to starting and growing a business, monetary wealth goes a long way. The underlying reasons for this are too numerous for this post but make sure you subscribe below as this is something I’d love to delve into in the future!
Now onto institutional finance. Black-owned businesses are four times more likely to be turned down for a business loan, overdrafts or credit cards than a white-owned business. And when they do receive a loan the interest rate is, on average 2.12% higher than a principally white-owned business.
This often leads to the business owner being solely reliant on income from the business to grow said business. This often becomes a balancing act between, trying to grow the business where possible but also keeping food on the table and rent/mortgage paid.
Finding these businesses on the Highstreet is an often-onerous task and buying from a Black-owned business isn’t generally a habitual act. In fact, it’s usually a very conscious, good intentioned one. Historically it’s been far more convenient to purchase from a mainstream chain, than seek out an alternative.
The catalyst of the BLM movement has caused a massive surge in awareness, and a lot of Black-owned businesses have benefited massively. We’re now getting a good picture of this due to the efforts of Black Pound day organisers in creating a quantifiable way to measure the money being spent in the black community.
There has been a phenomenal effort, the next step is evolving the surges into repeatable and sustainable purchases that are a part of everyday life.
If you’re in a position to buy from one of your favourite Black-owned businesses, then you should absolutely do just that – if you don’t know of many you can check out some of our amazing business owners here at Wakuda.
Our aim is simple – to empower Black community by not only connecting its businesses to buyers via our online marketplace, but providing support and knowledge on how to grow and scale their businesses effectively.
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Till the next time…