New Research by Accion Opportunity Fund about Black-owned Businesses
Nonprofit small business lender Accion Opportunity Fund partnered with LegalZoom, industry leader in online business formations and management solutions, to examine the state of Black entrepreneurship
New survey reveals challenges, motivations, and untapped power of Black-owned small businesses
FOR IMMEDIATE RELEASE
Janel Knight Trulear
September 28, 2023 – A new study from Accion Opportunity Fund (AOF), with philanthropic support from LegalZoom, offers insights into the experiences and motivations of Black entrepreneurs who are driving a nationwide small business boom. Empowering Excellence: Building Ecosystems for Black Entrepreneurs shows how Black-owned businesses that power our economy have been resilient despite challenging times.
Based on a survey of 660 Black small business owners (of which 70% were women) who have been in business for at least three years, as well as a focus group discussion, this research uncovered several key findings.
- AOF’s research demonstrates that Black entrepreneurs remain resilient despite major setbacks during the pandemic and the lingering impacts of record high inflation. Nearly 70% of survey respondents reported breaking even or making a profit from their business.
- While Black entrepreneurs are creating jobs and growing their businesses, their full power as engines of our economy remains untapped because of a lack of support. Seventy-six percent said access to capital was a challenge and of those who have never received money for their business, nearly 80% said they either could not find the right support or could not afford to pay for services that would help connect them to capital.
- Black-owned small businesses are particularly vulnerable to emergencies or economic shocks. Eighty percent of Black entrepreneurs surveyed said they had three or fewer months of cash reserves on hand. Thirty-nine percent had less than a month’s worth of cash reserves.
- AOF’s research highlights that many Black business owners are motivated not just by revenue growth, but community impact. Twenty-six percent of respondents shared community or social motivations for starting their business, including creating meaningful jobs, providing affordable services, and improving their neighborhood. In communities of color, entrepreneurship offers the opportunity to meet broader needs that go unmet due to systemic racism.
“It’s time to acknowledge that Black business owners possess an abundance of potential and passion. Our financial system has kept them from reaching that potential for far too long and we are all worse off for it,” said Dr. Joshua Miller, VP of Research and Policy at Accion Opportunity Fund. “This research shows that our economy and communities are missing out on vital jobs and activity that could be generated if Black entrepreneurs had better access to resources that support business growth and success. It’s more important than ever to create an inclusive financial system that helps Black business owners and our economy succeed.”
“We’re proud of our partnership with Accion Opportunity Fund, and the opportunities we have to continue to help level the playing field when it comes to access to capital, education, legal, tax, accounting, and compliance services. We hope these findings motivate and inspire organizations of all kinds to do more to provide equal access to the services Black business owners need, as well as other under-represented communities,” said Catherine Davie, Head of Engagement, Impact, & Inclusion from LegalZoom.
Based on these survey findings, AOF recommends that:
- Policymakers tap into the full potential of Black entrepreneurs by investing in community development financial institutions (CDFIs) and public-private partnerships to increase access to capital;
- Small business service providers continue to innovate to provide low-cost products and services such as legal, tax, compliance, accounting, and bookkeeping. In addition to providing the service, there’s an opportunity to centralize and share resources with Black small business owners to access educational materials, connect with other business owners, and network for mentorship opportunities.
- Philanthropic supporters partner with mission-based organizations to address systemic gaps in capital access and other resources, creating a robust small business support ecosystem for Black entrepreneurs.
View the full report here.
On Thursday, October 5th at 11a.m. PDT/ 2p.m. EDT AOF is hosting a free, one-hour webinar featuring Dr. Joshua Miller to discuss the real-world implications of these findings and give audience members a chance to have their questions answered live. Click here to register.
To request an interview with Dr. Joshua Miller and small business owners, contact Janel Knight Trulear at email@example.com or 617-875-6581.
Accion Opportunity Fund works to advance economic mobility for low-income communities and women and people of color who own small businesses through affordable financial services, knowledge resources, networks, and policy. We promote an equitable financial system by providing quality financial services and resources, building cross-sector partnerships and advocating for fair policies so all individuals can build financial well-being and improve their lives. Accion Opportunity Fund Community Development is the lending arm of Accion Opportunity Fund, California Finance Lender license #6050609. Visit the organization at aofund.org to learn more about their business growth resources and funding opportunities.
LegalZoom is the leading online platform for business formation in the United States. Driven by a mission to unleash entrepreneurship, LegalZoom delivers comprehensive legal, tax and compliance products and expertise for small business owners through easy-to-use technology. From free business formations to business management solutions and professional advisory services, LegalZoom supports millions of small business owners and their families throughout the entrepreneurial journey. Founded on the belief that everyone should have affordable access to legal and financial expertise, LegalZoom empowers entrepreneurs to make their dream a reality. To learn more about LegalZoom, visit www.legalzoom.com.