Dollars & Sense August is Black Business Awareness Month

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There are Gangs & There are GanGs I

Mila K. Marshall, PH.D. Staff Editors

August is Black Business Awareness Month and celebrates the contributions and success of diversity in entrepreneurship.

When we acknowledge

Black owned and operated companies, we respect the decades of work invested in ensuring equitable access to capital, diversity in the supply chain and workforce development for African Americans. Supporting Black owned businesses is seen by many as an effective tool and strategy for gaining equality. In a Pew Research poll of Black Americans 58% of respondents said supporting Black owned businesses were effective at promoting equality followed by 48% agreeing that volunteering with organizations that prioritize Black issue was effective and fewer agreed that protesting (42%) and contacting elected officials (40%) was impactful.

U.S. Census Annual Business Survey there was 140,918 Black-owned companies with $141.1 billion in annual receipts and 1.3 million employees with $42.2 billion in annual payroll. Nearly 30% of companies were in the Health Care and Social Assistance sectors. Despite the metrics there still is no metro area in the nation with a share of Black-owned businesses that match or exceed the Black population. In Illinois Blacks own 11% of business but only 2% of employer businesses. A first of its kind query of Black businesses was the result of a unique partnership between Chicago State University, Chicago Urban League and the Illinois Department of Commerce and Economic Opportunity. The survey is a sample of the Black owned businesses and was executed in 2021 during the pandemic when companies were at peek tensions. The following data was retrieved from the Illinois Black Business Survey published in February of 2023.

Top Industries:

• Professional services – 12.22%

• Food and Restaurant-Bar – 10.75%

• Education/Social Services – 9.72%

• Retail – 8.98%

• Personal services – 6.77%

• Arts entertainment – 6.33%

Time in Operation:

• 10+ Years – 30.8%

• 3-9 Years – 37.8%

• 2 years or less – 31.4%

Business Size, Revenue & Operations:

• 66% of respondents are micro-enterprises and solo entrepreneurs who reported no part- time or full-time employees other than themselves.

• Of the 34% of the companies that did have full-time employees, 85% had

Black employees working for their business.

• 53% of respondents are home-based

• 60% of respondents reported their annual revenues before the pandemic were $50,000

• 33% reported no impact or an increase in revenue after the onset of the pandemic while 66% reported losses.

Gender:

• 64% of survey respondents were Black women business owners. The primary sources of startup funding for survey respondents:

• Personal Savings (71%)

• Gifts/Loans from Family and Friends (8%)

• Credit Cards (6%)

Challenges Related to Growth

In terms of challenges related to growth and expansion, respondents identified the following aspects of business most difficult.

• Implementing technology (32%)

• Marketing their products or services (30%)

• Attracting customers (21%)

• Diversifying their client/customer base (17%)

Findings illuminate important trends to consider when strategizing on economic development, diverse hiring, and industries in which there are opportunities for Black ownership.