The states of black business in America is still low.
February every month is a month that America remembers all the inventions, the triumphs and the progress that the African American in the USA made. While the time is mostly used to celebrate all the steps that have been made by the African American community, it is also a time to reflect on what the progresses that have been made. One of the factors is the wealth creation for the black community. In doing so it is important aspect to examine is the state of the business of black business in America
In the 21st century the business of the black people has grown exponentially. As of 2012, there were a round 1.9 million black businesses in America that were owned by the African Americans. Most of the data used today is based on the Guidant survey on 2600 on business owners in America countrywide.
In 2016, the number of the business that were owned by the black people raised to 2.6 million which showed progress. However, the black businesses in America generally are struggling more, than the other business that are owned by the other races. Of the African American owners in the united states of America 62% of the owners are male and 38% are female. The majority business owners also fall between the ages of 40 -49 who are 28%. The other business owners aged between 50-59% account for 25% and 30-39% accounted for over 22% of the total business owners. Most of the black American entrepreneurs are found in North Carolina, Florida, California and Georgia.
According to a Guidant survey, 62% of the African Americans started the business because they wanted to purchase their passion. Form the same study 53%started the business because they were ready to be their own bosses, 30 started because they saw an opportunity was there and they could exploit it, 22% were disappointed with the corporate culture and 12 % had just been laid off.
However only 3% of the businesses that are owned by the black community make more than 100,000 US dollars per year
From the small percentage, less than ½% of the top three percent ever make it to 1 million dollars per year. That shows that businesses really struggle. From the African American business only 57% of the business are cited as profitable the other are not profitable.
The African American business have also employed a few people. Most of the African American business 46% have just employed themselves. 41% of the African American business have employed 2-5 people. 2% have employed more than 10people and less than 1% have employed more than 20 people.
The black businesses are facing a lot of challenges that inhibit them from either.
For example, according to the Black chambers CEO of the USA the black Americans, the main challenges that the black American business are the is the accessibility to capital and location.
From the surveys carried more than 80% of the black people sited lack or capital as one the most challenging aspect. 31% of the population cite that they have a problem with the marketing and 23% cite that they have huge challenges with time management.
In 2016, African American business starts venture capital only accounted for 0.2% of all the funds. The number is even worse, as only 34 of African American women were able to secure a loan that was more than 1 million.
According to the CEO, the African American Black Chambers whenever the black American are able to access the loans they will be given very little money or they have a high interest rates attached to them. Specifically, there African Americans have hard to finance their start-ups. From the surveys 70% of the African American start-ups have been started with cash and 23% were able to receive funding from their families.
They have however cited that lack of high education is a significant factor but not a huge factor. 32% of those that have business only have high school certificates, 21% have managed associate degrees, bachelors’ r degree is only held by 26% Master degree is also held by only 19% and only 3% have doctorate certificates but they have businesses.
Additionally, most these problems can be attributed to the high incarcerations rates that the black males are facing. For instance, one out of every three African American is expected to be sent to prison at least once in his lifetime. For that surveys reports that over 1.5 million African Americans are either dead or are in Prisons according to New York Times.
From the statistics that have been provided by the recent surveys the black business account for a very small percentage of the national GDP.
For instance, the surveys found that the more than 93% of their income is spent outside their community.
From the data provided, it is clear that while the businesses are trying so much, they are really struggling. The business of the firms is facing negative operations from the public as people believe that the services or products that they are offering are inferior or poor quality. However, the main problems rotate around lack of funds and ability to invest back in their services.
However, the US Black Chambers Inc. is has started an initiative for the Black Wealth 2020 which has them main objective of reducing the wealth gap between the blacks and the Whites in America. The imitate main approach is to increase the blacks’ homeowners by 2 million and also expand the number of business owners to 4 million before 2020.