Black business owners say they are ready for growth despite lacking access to capital and mentorship. Shopify’s data makes it clear.
- 81% of black entrepreneurs say they must ignore the background noise of racism and stigma to succeed
- 61% say finding access to capital is a major challenge
- 83% say it’s time to shine despite organizational barriers
At Shopify, we know that a world with more voice in commerce is better for both businesses and consumers. Yet today’s business deals are not fair to everyone. Imagine anyone with the ability to run a successful business can do so without barriers. If companies had the resources they needed to thrive, how many generations of wealth could they create? How many lives could they change?
Raising awareness of the impact of inequality on entrepreneurship is important to our quest at Shopify. To better understand the barriers that still exist for Black-owned businesses, we recently conducted over 500 surveys and interviews. Aspiration When Established Experiences of black entrepreneurs across North America*.
Here’s what we learned:
Access to capital on better terms is key
Racial and social justice movements have promoted public support for black businesses for the past three years. It promised investments and loans from banks, investment firms, technology companies and others. Yet one of the core problems facing black-owned businesses remains unresolved. Nearly two-thirds of his entrepreneurs (61%) say finding access to capital is a major challenge. Even securing grants for black businesses is difficult for about 60% of black entrepreneurs. Many say they rely on unfavorable forms of finance — personal savings, expensive credit cards, and hard-to-access subsidies — to keep the lights on.
When I asked what would help my business succeed, the answer was clear. Easy access to funding and better terms for that capital topped the list.
Inequity costs the economy billions of dollars
More funding and mentorship in the hands of black entrepreneurs can open up sales opportunities and turn the economic engine to $190 billion**. According to Shopify data, more than three out of four black business owners (78%) say it’s hard to find non-black customers. Enhanced access to digital platforms and service providers provides more avenues to increase advertising.We partner with non-profit organizations operation hope Create 1 million new black-owned businesses (1MBB) by 2030.
Black entrepreneurs work harder and smarter to succeed
More than half (56%) of the Black entrepreneurs we surveyed said they knew they were playing on an uneven field.For them it means working hard When Smarter and more successful. Most of the entrepreneurs we surveyed (81%) agreed that ignoring the background noise of racism and stigma is essential. 83% say it’s time to shine, and 68% feel optimistic about their business’s growth potential.
“Growing public awareness of social justice movements like Black Lives Matter has led to more tangible support for black businesses and black entrepreneurs are optimistic.” Brandon Davenport, Head of Equitable Commerce at Shopify, said: “For my fellow dreamers sitting with an idea and waiting for the right moment, that moment is now.”
At Shopify, we truly believe it’s possible to make entrepreneurship more inclusive for everyone, and inject billions into the economy while doing so. More than half (59%) of entrepreneurs would rather control their business than seek outside help. The remaining 41% preferred to seek professional advice. Over the next decade, our fair commerce initiative will strengthen our ecosystem of services: access to capital, expert mentors and unique sales opportunities. We use her four pillars of community, advocacy, research and education to empower and support entrepreneurs in the areas that matter most to them. You can find out more about how we plan to do this here. look at this spaceTo learn more, download the research study below.
*Using two approaches, we analyzed the sentiments and behaviors of over 500 aspiring and established Black business owners in the United States and Canada from February to March 2022. Entrepreneurs can discover key decision-makers, influences within their communities, and key issues they face. Phase 2 was quantitative validation, surveying 402 aspiring entrepreneurs and his 109 existing entrepreneurs to test hypotheses and quantify findings across the market.
data from ** McKinsey & Companies Institute for Black Economic Mobility Used to support Shopify research.