Recently, there have been many articles on the number of Black business startups during the COVID-19 pandemic due to layoffs and the great resignation. We love to see it, but what about the more alarming rates of business closures? Studies show that 80% of Black-owned businesses fail within the first 18 months! So, let’s take a look at how to survive as a Black-owned business.
If you’re going to make it as a Black entrepreneur, there are a few things you’ll need to do.
1. Take more time to think through your business plan.
Many Black entrepreneurs start their businesses to have more free time and flexibility and are often unrealistic about what it takes to stabilize the company. If you are a first-gen entrepreneur, find a mentor or join a business mastermind to familiarize yourself with the inner workings of business ownership.
2. Keep your overhead expenses low in the beginning.
Don’t rush out to hire an assistant or purchase an office space if it isn’t necessary. Growth is always good, but make sure you don’t get too far ahead of yourself when your cash flow increases. Be sensible and hire an accountant early on to help keep things in perspective.
3. As your team grows, spend time cultivating your company culture.
Talent is very important; however, if your team doesn’t work well together and respect each other, you will have a constant revolving door. It’s tough running a business and trying to scale when you have to keep rehiring new staff. Take care to pick the right people and then work together to build a collaborative environment.
4. Research and adapt.
Too many Black business owners fail because they’re not keeping up with market trends and technological advancements. You have to be mindful of emerging business practices. Do your research and study your competition so that you can keep up with the market changes. If you refuse to be flexible and innovate, you’ll be out of business before you know it.
5. Don’t be discouraged from seeking capital.
37.9% of Black business owners say they are “discouraged” from applying for loans. Take advantage of your available resources. Getting a loan or a credit line can help you grow your business — and it’s nothing to be afraid of. So many of us were taught not to trust the banks and that loans are risky, but with strategic planning, you can come out on top.
Starting a business is a lot of hard work, but you can do it! Even if you’ve already made some of these mistakes above, you can pivot and get refocused. No matter what happens, never give up. There are going to be ups and downs in your business even if you do everything right. It’s just the nature of the beast.
More and more Black businesses must begin to grow and thrive. As our community becomes more self-sufficient, we will be in a position to invest in our school systems and local resource programs to liberate our people. Let’s build a legacy that future generations can stand on proudly. It starts with us — let’s work!