It’s Time To Help Black-Owned Businesses

It’s no overstatement that Black-owned U.S. businesses are in a state of crisis due to the economic fallout from the coronavirus pandemic. From February to April of this year alone, 440,000 Black-owned businesses closed their doors permanently, with thousands of jobs and millions of dollars in worker income lost.

At the core of such closures is an unfortunate reality: Most Black-owned businesses within majority Black communities are undercapitalized and unable to withstand the type of economic shock we’re experiencing right now. Cash liquidity is a key predictor of a small business’ ability to survive and grow, and our research shows that far too many Black-owned businesses continue to lack the resources they need.

According to the JPMorgan Chase Institute, most small businesses in majority Black communities entered this crisis with fewer than three weeks of a cash buffer and less cash liquidity than businesses in white communities. The Institute also found that Black-owned businesses could require more recovery assistance than others due to severe revenue shocks in recent months.

The businesses that will be best positioned to succeed post-crisis are those that have managed their cash flows effectively and pivoted business models where necessary — all while strengthening ties to their local communities and keeping employees and customers safe.

This is a tall order for any business owner in a pandemic-stricken environment, let alone Black business owners who are more likely to be under-resourced. That’s why we launched Advancing Black Entrepreneurs (ABE) by Chase for Business in July.

Through ABE, which was created through JPMorgan Chase’s Advancing Black Pathways initiative and Chase for Business, we’re providing free instruction for Black business owners on timely topics like how to reduce expenses, maintain vendor relationships, collect outstanding revenues, and manage inventory and other assets.

In addition, participating entrepreneurs are receiving free instruction on how to build flexibility into supply chains, develop an online presence and revisit staffing models, while also learning best accounting practices for using any new grants or loans.

Through Advancing Black Pathways, we’re working to develop relationships with more Black entrepreneurs as well, and our ABE course covers how to manage banking relationships in this environment.

To help us reach Black entrepreneurs at scale with ABE, we’ve partnered with four organizations that together represent more than 350,000 Black-owned businesses: U.S. Black Chambers, the National Minority Supplier Development Council, the National Urban League and Black Enterprise. Since July, leaders from these organizations have administered 90-minute virtual sessions to participating entrepreneurs on these topics at no cost to their members.

Are you a Black business owner, or do you know someone who is? Is your favorite restaurant, flower shop, coffee shop or hardware store run by a Black owner? Advancing Black Entrepreneurs was created to help Black business owners fund and run their companies of any size. Check out what we’ve done thus far and our future plans here.

Here’s what our strategic partners had to say about this initiative:

• “Black entrepreneurs play a vital role in the economic health of Black communities, and it is critical that we equip them with the necessary tools and insights at this time,” said Adrienne Trimble, president and CEO of the National Minority Supplier Development Council. “We’re looking forward to working with the coalition and Chase Business Banking to position Black-owned businesses for success and prepare them for life after the crisis.”
• “Although we’re certainly in a difficult economic environment, there are countless examples of businesses that are finding a way to move forward, and it’s important that we share these stories and provide a road map for Black entrepreneurs,” said Ron Busby, president and CEO of the U.S. Black Chambers. “Together with the coalition and Chase Business Banking, we will deliver timely, actionable content to an audience that needs it on a mass scale.”
• “Black-owned businesses are a pillar of our communities, and we must be intentional about connecting them to crucial resources like the Advancing Black Entrepreneurs initiative in this time of crisis,” said Marc Morial, president and CEO of the National Urban League. “If we don’t act now in a meaningful way, we’re facing a real risk of seeing the racial wealth gap accelerate at an even faster rate.”
• “It is important that we connect Black business owners to insights, mentorship and resources during this time of crisis to help them not just survive, but to position them for life beyond the crisis,” said Derek Dingle, senior vice president and chief content officer at Black Enterprise. “Advancing Black Entrepreneurs is about helping Black entrepreneurs create sustainable models for growth, and position them for continued job creation within the communities they serve.”

Learn more about Advancing Black Entrepreneurs by Chase for Business.

Source: Ozy