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How can we all ensure that Black small business owners thrive and grow year-round?
That’s the question at the heart of Hello Alice’s latest survey of more than 3,000 Black small business owners on our platform. Published in partnership with Mastercard and the NAACP, the results help identify the unique obstacles challenging Black owners’ growth and specific solutions that can help them reach their full potential.
Based on the survey, here are three actions to help Black owners put their best foot forward in 2023 and beyond.
1. Streamline operations through easy wins
Decision paralysis, or the inability to decide out of fear of making the wrong choice, is too real for entrepreneurs whose dreams and livelihoods feel at stake with every decision. Whenever I face a big, complex challenge, I ask myself a simple question: What can I do to make progress right now? As a small business with limited resources, that typically means creating a scrappy experiment that requires as little new money, time and human resources as possible. Tackling the low-hanging fruit helps clear the noise, arms my team with learnings, and re-focuses our attention on more important goals down the road.
Based on our survey, Black owners face several day-to-day challenges ripe for easy optimization:
- 32% of Black owners said budgeting and managing cash flow was their top day-to-day worry
- 17% of Black owners said combating inflation was their top day-to-day worry
- 13% of Black owners said scheduling/managing time was their top day-to-day worry
Solutions to these problems largely fall into two buckets:
- Go digital: If your bookkeeping and invoicing still involve paper, you’re probably leaving money on the table. Solutions such as Quickbooks, Freshbooks and Bench provide all-in-one solutions that help you manage finances and issue invoices so your business gets the money it’s owed on time.
- Seek out administrative help: Time is an entrepreneur’s most valuable resource, and an assistant ensures you waste as little as possible. Part-time virtual assistants are a great resource to tap into via marketplaces such as Fiverr or Upwork. And if an assistant is currently out of your budget, free tools such as Calendly, Asana, and Notion can help you schedule your time and manage projects.
Pick one of these strategies and see how quickly you notice an improvement.
Related: How to Streamline Your Operations
2. Seek out working capital
Optimizing day-to-day routines helps Black owners focus on two primary challenges: raising capital (the top challenge for 40% of Black owners) and growing their businesses (the top challenge for 21% of Black owners). These responses far outranked other challenges, such as marketing, customer acquisition and hiring, that typically rank highly for other demographics.
Why is that? Our survey found that inflation hit Black owners particularly hard. With an average annual revenue of about half the typical non-Black owner (roughly $70K versus roughly $145K), Black entrepreneurs have less cash buffer to weather unforeseen challenges such as inflation. This leaves Black owners with an acute need for capital to overcome barriers and pursue growth. More than 80% of Black small business owners said they are considering applying for financing this year.
Here are a few options for Black owners seeking funding right now:
Related: ‘Bias Is a Business Killer,’ Says the Co-Founder of the Largest Black-Owned Wine Company in the U.S.
3) Level up your skills and community
Finally, our survey found a steady increase in the overall number of Black entrepreneurs, many of whom are very young. I’m not talking about a difference of a few years here and there, either: Roughly two-thirds of Black owners (66%) are under 40, whereas roughly two-thirds of non-Black owners (63%) are over 40. This age gap is driven by an explosion in Black entrepreneurs between 18 and 29, who make up twice the share of business owners as their non-Black counterparts.
I’m inspired by this new generation of youthful innovators choosing the entrepreneurship path, but I’m also aware they will need mentorship and connections to avoid rookie mistakes.
I recommend the following to any owner, regardless of age:
- Digital education content: Platforms such as Skillshare, Coursera, and Udemy can help you learn nearly anything independently. Both Hello Alice and the Small Business Administration also release free step-by-step guides on crucial topics for small business owners.
- Mentorship: SCORE, Amazon’s Black Business Accelerator, and Black Connect all offer free access to mentoring and resources to help you learn, iterate, and grow.
- Conferences and Events: Nothing can replace spontaneous, face-to-face connections that teach us lessons and facilitate invaluable partnerships. Black Enterprise maintains a list of conferences for Black owners, and I recommend joining the National Black Chamber of Commerce. Also, check out your industry groups — they have regular programming to help you network, stay up-to-date with changing regulations, and access local resources.
Whichever options you choose, make sure you don’t go it alone. There’s a thriving community of entrepreneurs battling the same challenges. With a little coordination, we can all rise together.