Lessons from a Black Business Mentor
I became a SCORE mentor because, as a consultant, I realized that many of the people I started my business to help did not have the finances or fundamental knowledge to get started. Alternatively, they had started and failed because they were sold the American Dream of being a business owner but did not have the necessary tools or resources to succeed. Much like the American Dream of homeownership, obtaining a business is more accessible than retaining one.
We were fresh out of a recession that left many homeowners recovering, waking from a dream into a nightmare. In 2017 I predicted the same ease of entry and lack of knowledge and support would leave business owners returning to jobs the same way it turned first-generation homeowners back into renters. I did not predict that the clock would strike midnight in 2020, turning many businesses into pumpkins, with vacant storefronts littering Main Streets like jack-o'lanterns after Halloween with decaying grins. Though the pandemic hit small businesses nationwide, the impact was felt more significantly by Black-owned businesses due to inequities that existed before the pandemic, which include: being taken seriously, access to capital, defying social expectations, building support networks, and owning their accomplishments.
Owning a business, like homeownership, serves as a path to generational wealth. For Black business owners, this path has been flooded with obstacles for generations. The wealth gap is only growing in our country. Ensuring equity and access to the tools and resources necessary to start and sustain a successful business may be more crucial than ever. According to the study by Prosperity Now and the Institute for Policy Studies, The Road to Zero Wealth, "While households of color are projected to reach majority status by 2043 if the racial wealth divide is left unaddressed; median Black household wealth is on a path to hit zero by 2053, and median Latino household wealth is projected to hit zero twenty years later. "In sharp contrast, median White household wealth would climb to $137,000 by 2053" (Muhammed et al.,2017, p5).
Entrepreneurship is not a new concept to Blacks; when I grew up, it was always considered a side hustle to overcome the obstacles of working poor. My community teemed with street mechanics, handymen, home daycares, kitchens to prepare a catered feast for family events, beauticians, and barbers who honed their crafts. Even legitimate businesses like barbershops served as an incubator for other entrepreneurs to sell goods and services.
These "hustles" were about survival and lacked the structure, in most cases, to become thriving businesses that could generate lasting generational wealth. Many of these “business owners” were unaware of their value. They also struggled to charge a community of others who, too, were trying to survive. This behavior also fostered a mindset that Black-owned businesses primarily serve Blacks; this was evident by the increase in business due to the recent Black Lives Matter protests across the nation and the world, prompted by the death of George Floyd.
Another obstacle internal to the Black community is that when some Black people patronize Black-owned businesses, they expect to pay less than they are willing to pay for equal service from a non-Black-owned business. These obstacles have been present in Black culture since the fall of Reconstruction post-slavery when Black businesses and schools flourished before being destroyed, neglected, and dismantled.
So how do we rebuild, and who is accountable? I believe the answer is an awareness of how we got here, a humble acceptance and accountability for where we are, and definitive action to evaluate and place equity controls in and around systems to ensure access and awareness. But the only thing more convoluted than that sentence is "HOW."
A rising tide lifts all ships, and lending support to business owners through capital directly tied to education is critical. Information is more abundantly accessible than ever with the internet and nearly everyone carrying mini-computers in their pockets. Unfortunately, giving someone tools without guidance and instruction can cause more harm than good—this is why mentorship, like that provided by SCORE, is so valuable. SCORE has the mentors and vetted resource materials and templates to help any business launch and thrive. Still, the mentors must understand the feelings and values of the client, and the instruction must also consider the learning styles, skill level, and cultural barriers. My awareness of this need is why I serve, to aid the clients, serve as a partner to my fellow mentors, influence the SCORE organizations' strategies, and recruit others who see themselves in the solutions, not the statistics.
The most significant way to influence and sustain change for Black-owned businesses is financial literacy to overcome the obstacle of the poverty mindset. Having a poverty mindset is a fear of economic scarcity. It convinces you that circumstances are finite and will not get better. A poverty mindset is consistent with the belief that money shouldn't be spent; opportunities are limited, and risks are dangerous. The ill belief that any success is temporary and non-replicable and generally remains among the most safely employed. This mindset impacts how Black people view and use finances; some spend what they earn almost immediately out of fear of not having more later. Others hoard and choose not to spend in response to the same fear. As business owners, we know these approaches, out of balance, can lead to failure in most cases. Unfortunately, many who write about the poverty mindset paint a picture using a broad, all-inclusive brush and refer to it as self-sabotage.
In many Black families and communities, that sabotage has been external and historically rooted in some truth, intensifying the fear. We need to teach financial literacy to our youth better, but tomorrow's answers won't help business owners today. I suggest clients take control of their business by seeking knowledge, putting aside their pride, and getting back to the basics of their finances. Show me a business owner with poor personal finances, and I'll likely show you one with poor business finances. You can take a college course without pursuing a degree and, in some cases at no charge, register for a local or online finance course and ask questions with the same curious spirit as a child.
I also recommend scheduling an appointment with your regional bank's business account manager or an accountant. Go in prepared with questions from online resources, and then sit down with a mentor before you become overwhelmed or reactive. And when all else fails, Google or YouTube your way to a better understanding like your livelihood depends on it because it may.
Pandemic recovery programs and social justice awareness have unlocked more doors for businesses than I have seen in my lifetime. But without the proper mentorship like the programs offered by SCORE, these opportunities will be unknowingly missed or misused. Sadly, the failure of Black-owned businesses to participate in these programs will be looked at more as an unwillingness to join than a failure to reach out