Entrepreneurship has always been a part of Black America’s DNA. From hair to healthcare, large-scale corporations to construction, Black people have shown a special knack for creativity, despite the hurdles and the odds.
This year, online career platform, LinkedIn, surveyed Black entrepreneurs nationwide to get a better understanding of the Black entrepreneurship journey. The study was framed to shine a spotlight on the challenges Black entrepreneurs are facing today.
“Today, Black professionals and entrepreneurs have felt the need to contort their lives and careers in order to fit often oppressive and largely outdated workplace norms,” said LinkedIn Career Expert and entrepreneur Drew McCaskill upon the release of the report. “Whether it's the events of the past decades, living through a pandemic or the Great Reshuffle, today’s Black professionals and entrepreneurs are being bold about what they want and are unapologetic about pursuing their passion for entrepreneurship.”
Though the pandemic was devastating for a myriad of businesses, the number of African American business owners in operation surged in August 2021 to almost 1.5 million. That was up 38 percent from February 2020, according to data from the University of California, Santa Cruz. It’s a shining point in an otherwise disappointing look at the state of Black business ownership. For instance, the survey also found that when it comes to funding, 43 percent of Black entrepreneurs believe having access to funding/capital is key to growing their business, but only 1 in 4 Black business owners has received funding. When it comes to seeking out the means to launch or sustain a business, more than a third of Black entrepreneurs say they have been discriminated against. And McCaskill points out that so many Black entrepreneurs don’t know where to begin to look for funding.
“Nearly 2 in 3 Black entrepreneurs start their business using personal savings (64 percent) vs. investor finds (18 percent),” McCaskill notes. “This tells us that there are systemic structures in place that make it difficult to start scalable businesses if you haven’t saved up for it. And most of the time, personal savings aren’t nearly enough to cover many of the expenses associated with entrepreneurship.”
Tangible resources aside, networks are also a barrier for these entrepreneurs. Having a diverse, connection-filled community to rely on is something 58 percent of Black business owners believe would help them be more successful. “When I think through what could be defined as a strong network, I think about not just the social capital and connections leaders have, but the financial capital that could be behind those doors, says McCaskill. “As a leader, mentor or sponsor, a letter of recommendation, connection to another industry leader, and even a shout-out are some tangible ways to build a strong network. The best networks are diverse and include people from all walks of life with multifaceted life experiences and skills to bring to the table. Strong networks can also open access to funding opportunities.”
The power of community has made the overwhelming majority of Black entrepreneurs (75 percent) feel more supported. It has also made it possible for them to learn new skills (69 percent) and feel a greater sense of belonging in their industry (67 percent).
In the fall of 2020, a new employment trend was afoot. And by the spring of 2021, the Great Resignation was widespread. A year later, the U.S. Bureau of Labor Statistics reported that 4.3 million people quit their jobs in May, resembling the number of resignations at the same time last year. Resignations in the early stages were fueled by employees who desired more from their employers—whether that be higher pay, less time in the office, or just something that they were more passionate about. But for Black Americans, that desire was also driven by the opportunity to build financial security + generational wealth—nearly half of the respondents said so.
“The Great Reshuffle, as we call it at LinkedIn, has been a time where Black employees everywhere have been reimagining not just where they work, but how and why they work as well,” McCaskill explains. “Black people systemically face higher unemployment rates, have access to fewer job opportunities, are paid less and face greater job instability. Not to mention, Black professionals who have student loan debt can expect to pay more per month in student loan payments.”
He adds that as the Great Reshuffle continues, it’s crucial to keep in mind that due to the ever-changing landscape, in this new world of work, the employer-employee social contract is being rewritten, and the worker is holding the pen.
“As leaders, we can intentionally create spaces to help Black professionals and entrepreneurs thrive in and outside the workplace,” says McCaskill. “Networks and creating community matter–particularly when you’re facing institutional and generational headwinds to your success.”