The age-old saying to “stay in your lane” can be good advice. Sure, it serves us well in situations like driving, but it can stifle our daily routines, about how we think about things and even in the choices we make. As we celebrate Black History Month this February, it’s a great time to explore other “lanes,” or ways to invest in Black-owned businesses.
First, a few stats about Black-owned businesses:
- Black-owned businesses comprise only 2.2% of the nation’s 5.7 million employer businesses (firms with more than one employee).
- Black-owned businesses create an average of 10 jobs per firm, compared to 23 for non-Black-owned businesses. If the average employees per Black-owned business increased to 23, it would create approximately 1.6 million jobs (1,583,268).
Why it’s worth investing in Black-owned business
It strengthens the larger economy.
Nationally, with 2.6 million Black-owned businesses in the U.S., eight out of 10 fail within their first 18 months. Supporting Black-owned businesses infuses money, which helps operational and growth costs, and keeps doors open. It also boosts community morale and sets an example of optimism.
A shortage of Black-owned businesses also “throttles employment and the development of Black-owned communities. Furthermore, the underrepresentation of Black-owned businesses is costing the U.S. economy millions of jobs and billions of dollars in unrealized revenues,” writes Andre Perry, senior fellow, Metropolitan Policy Program.
It helps close the racial wealth gap.
This isn’t an “other” issue. The racial wealth gap in the United States is a burden on the overall economy as well as Black Americans.
Owning a business is good for Black entrepreneurs, but it also supports the communities around them. According to a Congressional Black Caucus Foundation study, Black-owned businesses have created over 1 million jobs and generated over $165 billion in revenue. That obviously brings all of us up.
Closer to home, from a Smart City Memphis article: “It’s simply common sense. The Memphis economy cannot reach its potential if a large share of its people cannot reach theirs.”
Engage in consistent consumer consideration
“The best way to support Black-owned businesses … is to pay for their goods and services continuously. … You’ll find several Black-owned businesses that would be happy to have you.” —Alex Harshaw, Harshaw Audio LLC
- Cheryl Pesce at The Lifestyle Store, home goods, handcrafted jewelry, apparel, books
- Silk N Honey, fresh and fun clothing boutique
- Mo’s Bows, dial up the “daily debonair”
- Alcenia’s, Southern-style food
- Four Way Grill, more amazing Southern-style food
- Slave Haven Underground Railroad Museum, with a “Walk Through History” tour
- Roots of Memphis Music, self-guided tours throughout Memphis music
- kpfusion.com, fashion, lifestyle and beauty blog
- Phillip Ashley Chocolates, designer sweets
- Black Directory allows you to search for a product and then connects you to the appropriate Black-owned business.
- Black Woman Owned increases visibility for businesses owned by Black women by leveraging social and digital media.
- Eat Okra connects foodies to 9,000 Black-owned restaurants and food trucks in their local areas.
Invest in stocks, startups, minority empowerment EFTs
Make your money and your investments mean more by investing in Black-owned businesses that are publicly traded. Unfortunately, fewer than a dozen Black-owned businesses are publicly traded, say various sources, and that’s among a nearly 135,000 Black businesses in this country, according to the U.S. Census Bureau.
Still, there’s opportunity. The nine companies we found are:
- RLJ Lodging Trust
- Urban One
- Ping Identity Holding
- Global Blood Therapeutics
- Carver Bancorp
- Broadway Financial Corp.
- Axsome Therapeutics
- American Shared Hospital Services
- Citizens Bancshares Corporation
Investing via Black-owned startups is also an area where Black business owners need significant help and is another consequential investment strategy.
Another option: If investing in individual stocks or startups is too overwhelming, choose a bundle of securities through a minority empowerment exchange-traded fund.
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