On average, Black-owned businesses start with $35,000 in capital, compared to white-owned businesses, which start with $107,000, according to a McKinsey study. Yet Black-owned businesses could add a potential $190 billion to the economy, according to a new study by Shopify.
Shopify interviewed over 500 Black entrepreneurs to understand the state of Black business in the United States and Canada. Here are its key findings:
- Funding is still a challenge: 44% said it’s very difficult to find funding, and 60% said it was challenging to get grants. Meanwhile, 78% said it was hard to find customers who weren’t Black.
- There’s a need for community: 54% said it was very challenging to find a community of Black entrepreneurs, while 34% said they didn’t feel like they have the knowledge or tools to manage sales. Meanwhile, 61% said they feel like it’s them against the world.
- Still, Black business owners feel positive about 2023: 68% said they feel optimistic about their overall business growth. And 81% said they agree with the statement: “Ignore the background noise of racism and stigma, or you’ll never get your business off the ground.” Meanwhile, 83% felt excited and like it was their time to shine.
“The public’s increased awareness of social justice movements like Black Lives Matter has led to more tangible support for Black businesses, which has Black entrepreneurs optimistic,” said Brandon Davenport, head of equitable commerce for Shopify, in a statement. “For all my fellow dreamers who are sitting on an idea and waiting for the right moment, that moment is now.”
Recognize your brand’s excellence by applying to this year’s Brands That Matter Awards before the early-rate deadline, May 3.
