Black Business
“Philanthropy is commendable, but it must not cause the philanthropist to overlook the circumstances of economic injustice which make philanthropy necessary.”
Dr. Martin Luther King
Pre-civil war, slaves who were permitted to run businesses more often than not had a skill set that was required. These entrepreneurs ranged from cobblers to barbers, to boat makers. The reason they’d be released to own businesses is so that they made money and some, excellent income. Even after the civil war and Emancipation, some slaves retained their white clientele and ran every facet of their businesses.
Banking
Postwar, banks for black soldiers and Freedmen were formed by the federal government. The Freedman’s Bank served black businesspeople in Durham, NC. It was so popular that at its peak, 1865 to 1874, over 70,000 black business people deposited around $3 million in today’s equivalent. Freedman Ban, unfortunately, collapsed due embezzling of funds by President Henry Cooke. He would indiscriminately give his friends and other white people, loans from the monies saved up by black entrepreneurs.
This devastated the morale of the people and caused them to mistrust banks managed by white people.
With Jim Crow laws further segregating the communities and the banking infrastructure, blacks began to serve their people predominantly.
The church, benevolent societies, and fraternities started banks and credit societies to meet the need for banking and credit facilities. These loans enabled African Americans to get started in business and to purchase homes, despite an environment hostile to their development.
National Negro Business League
With the formation of the National Negro Business League and leaders as W.E.B. Du Bois, African American entrepreneurship began to thrive.
By 1900, there were over 20,000 Black entrepreneurs. Interestingly, because of segregation, there were black people in literally every arena of business: from grocery stores, funeral parlors, barbershops, haberdashery’s, medical practitioners, etc. This was because in most cases, they couldn’t go to white businesses. Now it wasn’t an easy task for Black entrepreneurs, as every possible obstacle was thrown onto their path.
Unfortunately, the prospering businesses and therefore, black communities became a threat to white people. The owner of The Peoples Grocery, Tommy Moss, was tortured and shot. The black community was terrorized for their entrepreneurship; many were lynched.
Thankfully, others fared better.
Madam C.J. Walker, a Black entrepreneur in the early 1900’s, single-handedly built a manufacturing empire that inspired black America then, till date. She is considered the first black female multimillionaire. Madam C.J. Walker first started her business by mixing lye concoctions in her bathtub, and her business success may be attributed to her incredible marketing skills.
Madam C.J. Walker went from city to city, recruiting domestic staff, factory women and farm girls, teaching them how to use her products to start their salons. She is said to have trained over 20,000 women to be her “beauty culturists,” i.e. door-to-door saleswomen. Hopefully, Black entrepreneurs will be agents of change and transform the lives of African Americans, just as Madam Walker was.
Thankfully, though it’s not perfect, there’s a much better business atmosphere for Black people today.
For starters, the variety of businesses has drastically reduced. Black people who were once in every industry imaginable, are now in a limited few: funeral, basic grocery stores, hair salons, barbershops, etc.
Statistics Today
There are more than eight million minority-owned businesses in the United States, according to the Census Bureau. Of these, about 2.5 million are owned by African-Americans. African-American-owned firms account for about 10% of the approximately 27 million total U.S. businesses.
Guidant Financial conducted a survey in 2018, which revealed:
- 45% of small enterprises were black minority’s. This was up from 15% in 2015
- 400% Increase in small business black owners between 2017 and 2018
- 14% of Hispanic business owners were the second largest group
- 8% of Asians business owners were third
- 4% of Native Americans were fourth
- 62% African American small business owners pursuit of a passion
- 53% Ready to be their own boss
- 30% The opportunity presented itself
- 12% Laid off/To provide a service, e.g. health, fitness and beauty
Industrious Communities
Another community I admire for their financial adeptness are the Jews. The Holocaust all but destroyed the Jews. By the end of the Second World War, they were financially devastated. A scattered and plundered people, they had to rebuild themselves from scratch. Today they are still a teeny group, yet one of the wealthiest people group. That’s admirable! They somehow managed to rebuild themselves in record time! What can we, as African Americans, learn from them? How did they accomplish this? Unity. Putting their resources together and also supporting the businesses in their communities first.
The Chinese are also a powerful community. I love how prudent they are with their money. They use very little capital and wring out every bit of it. We need to learn from them. They are also an inventive and manufacturing people. It’s not enough to be a whole-seller or retailer. They’ll ensure that every bit of what they sell, has come from an affordable source who will invariably be Chinese. If not, they’ll manufacture it. Somehow.
The common denominator with these three communities is that these businesses are used to safeguard their financial futures.
Sources:
https://www.investopedia.com/articles/markets/121615/top-10-africanamerican-owned-businesses.asp/
https://www.guidantfinancial.com/small-business-trends/african-americans-in-business/
https://www.sba.gov/sites/default/files/advocacy/2018-Small-Business-Profiles-US.pdf/
https://www.history.com/topics/black-history/madame-c-j-walker/
https://www.pbs.org/wnet/boss/video/boss-the-black-experience-in-business-nguxge/
https://23u0pr24qn4zn4d4qinlmyh8-wpengine.netdna-ssl.com/wp-content/uploads/2016/08/economic_history.pdf
https://smallbiztrends.com/2018/08/african-american-small-business-statistics-2018.html/
https://www.inc.com/tess-townsend/pew-study-2015-job-creation-self-employed.html/
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