Danielle Douglas, an entrepreneurship expert and CEO of Inspire Enterprises, conducted a survey of African Americans interested in owning their own businesses. The survey,
which can be found here, was qualitative in nature, asking questions about the pitfalls that people run into when trying to become either full-time or part-time entrepreneurs.
Douglas made it clear that the greatest obstacle that African Americans face when trying to start their own businesses is a lack of access to capital. In an interview with AOL Black Voices, Douglas said this:
"Overwhelmingly, respondents' number one frustration is lack of financial resources as it relates to start up capital, access to capital in general and identifying viable resources to help them attain capital."
Douglas also said that a lack of know-how serves as a tremendous impediment to African Americans seeking to take the plunge.
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Black Progress
Digital Divide Narrowed
The divide between African-Americans and the rest of the population has been practically eliminated. In recent years the number of blacks online and with high-speed internet has doubled. This gives our community more access to jobs, networking, and inexpensive goods and services. Today, more than 68 percent of African Americans report they are online, compared with 71 percent of all Americans. At one point, that divide was closer to 20 percent.
Stockbyte
AFP
BlackVoices.com
Black Progress
Blacks in Business
The new generation of African Americans going the entrepreneurial route are well equipped and more knowledgeable than ever before. Despite facing many obstacles unparalleled to other races many African Americans have aspired to receive equality and the right to ownership since the ending of slavery. Now, in the 21st century we are able to see their successes as they become business moguls and CEOs of major companies.
Black Progress
Digital Divide Narrowed
The divide between African-Americans and the rest of the population has been practically eliminated. In recent years the number of blacks online and with high-speed internet has doubled. This gives our community more access to jobs, networking, and inexpensive goods and services. Today, more than 68 percent of African Americans report they are online, compared with 71 percent of all Americans. At one point, that divide was closer to 20 percent.
Black Progress
Race Relations
Overt racism and bigotry have been shunned and pushed to the margins of American life. Inclusion and equal opportunity have been embraced as key principles in America as well. Discrimination, while not eliminated, is no longer humored or tolerated in the larger society the same way it was 50 years ago.
Black Progress
Education
In recent years black graduation rates have been on the rise. School standards, charter schools and the no child left behind act have been cited as reasons for black students' progress in test scores for reading, writing skills, math, and social sciences. Consequently, the number of black men in women enrolling in college is increasing and in many states, the number of African Americans in or heading to college is actually on par with the region's overall population.
Black Progress
Hip-Hop Culture
What started as musical expression in the slums of the inner cities has turned into a $4 billion-a-year industry. Some say hip-hop is the most important contribution to the American cultural landscape since blues, jazz, and rock and roll. Now that's progress! Hip-hop literally forced the important melding of black and white and Latino cultures after the 1960s and 1970s. Today, hip-hop is not one thing, it is every thing: fashion, language, music and movies.
Black Progress
The Black Athlete
Michael Jordan, the Williams sisters, Tiger Woods, Barry Bonds, and Jerry Rice. These names have revolutionized the sports industry. They have collectively made a mark for black athletic talent in the minds and hearts of people around the world as household names. Those names became synonymous with the games they dominated and with talent unmatched by any other person in history. Love sports or not, the black super-athlete has been an important part of our progress in the last 25 years.
Black Progress
Blacks in Hollywood
History was made at the 74th Academy Awards in 2002 when Halle Berry became the first African American woman to win Best Actress. Denzel Washington continued the legacy of greatness when he was awarded Best Actor for Training Day 39 years after Sidney Poitier was the first black man to win the award. They have helped open the door even more for a new generation of leading black men and women in film, not to mention Oscar winners.
Black Progress
Political Power
Condoleezza Rice and Colin Powell are just a couple of examples of how African-Americans have advanced in the world of politics and government. In the last 25 years more black lawmakers, mayors and politicians have come on the scene. It is estimated that in the last 25 years nearly 9,000 blacks have been elected to public office. Powell and Rice have been influential in the advancement of black women and men in the U.S. government by their presence and success at the highest levels.
Black Progress
Empowered Black Women
Call it the Oprah effect if you want, but since this media mogul hit the scene, she has had an impact on all women, not just black women. Oprah Winfrey became America's first black female billionaire, and as inspiring as she is, she certainly won't be the last. She is a potent personality and a cultural phenomenon. Even though Oprah never depended on a black consumer base, her business activities reflect certain aspects of the expansion of black business activity in last 20 years. For instance, black women are more likely than black men to secure a small business loan.
Black Progress
A Black President
As Barack Obama continues on his path to become the first African-American President of the United States, history and progress is being made. It was monumental when Barack defeated Hillary Clinton in the primary to lead the Democratic Party, but before him there was the Rev. Jesse Jackson and others, who can not be discounted for helping pave the way.
Black Progress
"In addition, respondents felt frustrated that about their lack of knowledge in regards to how to start a business. In their opinion, this issue could be mitigated if they had a mentor or some form of support," said Douglas.
When I joined the Entrepreneurship school here at Syracuse University, I found myself curious. I wondered how there might be effective ways to utilize the tools in the program to help revitalize the urban community within our city. One of the things I had to express very early was that there are unique concerns and needs among the black community that don't apply to anyone else. It's difficult in a place that doesn't hire very many black professors to help others realize that tremendous value, potential, impact and complexity that business ownership has in black America. We have unemployment that is much higher than whites, our wealth levels are lower than whites and we also struggle on matters of financial literacy.
Therefore, as President Obama pushes to stimulate the economy along with Congress, it should be remembered that the black community's unique challenges must be considered as part of the equation. Funding should be increased to small businesses, and doors need to be opened for African Americans to find access to the critical capital necessary to see our great ideas blossom.
Related:
+It's Not Black People on Welfare: 30% of Taxes Goes
to Social Security, Medicare & Medicaid
+Mayor Cory Booker Comments on
Zuckerberg's $100 Million Education Gift to Newark
At the same time, African Americans must kick open the doors that politicians refuse to open for us. The building of black businesses is an important part of our wealth building strategy, and building wealth is the key to power in America. Additionally, many of the companies that are not hiring us are owned by other people, so it's about time we made a push to own those businesses ourselves. The final thing of value added to your life by understanding entrepreneurship is that by creating a "side hustle," you can find ways to diversify your streams of income. Even if you make a lot of money, you are never quite secure if you are getting all of your money from just one place.
Danielle is offering a free webinar on owning a business, which you can sign up for by
clicking here. As part of the promise I made at the "Measuring the Movement" forum hosted by the National Action Network, I will be writing and speaking on issues of entrepreneurship for the remainder of the year.
Dr. Boyce Watkins is the founder of the Your Black World Coalition and a Scholarship in Action Resident of the Institute for Black Public Policy. To have Dr. Boyce commentary delivered to your email, please click here. 
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Comments: (14)
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By: bestausweh on 10/06/2010 9:12PM
Thank you Dr. Watkins.
May I add a few comments?
Click on this site and get started quick before your student loans go into default. Do not sign High interest/Variable interest rate student loans. Throw away your credit cards or keep them out of your wallet if you find yourself using them outside an emergency. It is much easier to start a business when at the same time you are not climbing out of Debt.
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By: BG on 10/06/2010 10:47PM
In addition to the above, let us stop being a mendicant. Let us eradicate the attitude that the government has to do practically everything for us.
Let us not buy a $400,000k car as a birthday gift for a 16yr old. Instead, tell the 16yr old child 'I will buy you your own home for your 21st birthday and on condition that you gain admission into Havard or Yale'
Let us refrain from buying a $50ml home and end up like M.C.Hammer, Tyson, Evander Holyfield and the likes. Let us invest $30ml of this in business. Martha Stewart's home is not $50ml, the name is traded at the stock exchange. Mark Zuckerberg of the Facebook treks to work and in Jeans.
The Chinese migrated thousands of miles away. In major cities, you see a China Town. It's like a nation inside a nation. They created businesses and employs their own. They created a financial companies and banks giving loans to other Chinese to create businesses. The Mexicans emulated them.
Give loans to my brothas and sisthas, we buy Hummer, Escalades, Benz Maybach etc. It's like the Chrysler 300c was made for blacks.
The sad part is that we, for the most part of our daily lives, are dependent on the white people's establishments from the moment we step out the door to when we get to Target or WalMart to do our shopping.
As a matter of fact, let us thank a white man for making these BV dialogues possible. And if you want to argue this, read the book 'ON THE WAY TO THE WEB: THE SECRET HISTORY OF THE INTERNET AND ITS FOUNDERS'
Let all our civil rights leaders stop carrying placards and let us all get serious.
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By: Huge on 10/09/2010 7:53PM
BG, you know you know what to say and HOW to say it. Our people need to take heed. The ONLY thing I would add is to be sure to cite instances of Black business success in ALL of its shapes, forms, and fashions each time as you beat up on our people at large for not taking the business startup, successful operation, and absolutely vital "Buy Black" plunges. Balance would be achieved in the message and all will not appear to be gloom and doom. Economic self-sufficiency is the cornerstone of freedom -- trust me.
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By: Sylvia Lovingood on 10/08/2010 2:51AM
Totally agree!
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By: lisa on 10/08/2010 1:17PM
This story is very applicable to me. I had applied for a loan in the amount of 625,000 to open a beauty school. I had 100,000 dollars cash as my equity investment. I secured the loan, secured my SBA gaurantee, but in the end, could not seal the deal because my collateral was insufficient. Or so they said.
Although the SBA will not deny you due to insufficient collateral, the bank on the other hand can. It was very dissapointing to me, but I am not giving up. I am going to find other ways to be creative in securing my funding without venture capitalist.
Another thing that I believe needs to be mentioned is the ratio of how much of the SBA stimulus money is NOT being leant to African Americans. The only race to not recieve as much funding is Native Americans, and even they have their tribes to assist with startup funds.
I am deteremined to open my school. I am however not pleased with the fact that we bailed out these banks, but yet we can't depend on them to lend the monies.
I agree with BG on most of what he/she stated. But I ask the question, what is a sista' to do when the African American owned banks won't lend to you either?
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By: BG on 10/09/2010 12:42AM
I was going to tell you what to do but got confused. You stated that you SECURED THE LOAN and also SECURED THE SBA GUARANTEE but in the end, could NOT SEAL THE DEAL.
What do you mean? To me, you are good to go unless if your DEBT-TO-EQUITY RATIO is of concern.
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By: lisa on 10/09/2010 10:29AM
@ BG
Yes you read it correctly. I was approved. By the bank and the SBA, but in the end, they wanted MORE collateral. Debt ratio was not a problem. I had sold my home living in one of my rentals, the only major bill I have is my car payment. I try not to let race be an issue, but I do believe that it had something to do with. Meaning, I believe that more collateral was requried of me than it would have been of others. My credit score was okay, I had 100,000 dollars cash, more than the 10% required. But they wanted me to put ALL of the land that I own, a couple of my rental properties, plus my 100,000. I would not do it. They left me no "wiggle" room. To be in this business, I have 2 years before I can get accredidation for financial aid. I couldn't risk that by giving them all of my land/houses. What if I needed them to make it until my financial aid kicked in? I hope this clarifies some of the questions you had.
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By: ADRIAN HARRIS OF SOUTH GEORGIA GO!! GRAMBLING STATE UNIVERSITY!!! GO!! WORLD CLASS DRIVE!!!!! on 10/08/2010 6:42PM
HAIL!!! ALMIGHTY ABBA!!! GAMMA RAY BENDER!!! HAIL TO YOU!!! HAIL!!! SEPIA SPECTRUM PEOPLE!!! HAIL TO YOU ALL!!! Y'ALL WAS TALKING ABOUT COMMUNITY AND MONEY, SO I THOUGHT I'D GET REDUNDANT!? AS RECORDED IN THE WBA(WORLD BANK ATLAS); DERIVED FROM MY BLACK HISTORY BOOK--BEFORE THE MAYFLOWER BY LERONE BENNETT JR., AS OF 2010 THE AFRICAN AMERICAN NATION, COMMUNITY, ETHNICITY.....SPENDS $646,000,000,000(SIX HUNDRED AND FORTY SIX BILLION DOLLARS A YEAR AND HAS BEEN DOING THIS FOR A WHILE. WE ARE RANKED BY THE WBA(WORLD BANK ATLAS) AS THE 11TH RICHEST NATION ON EARTH. OUT SPENDING COUNTRIES LIKE KOREA, INDIA, AUSTRALIA, MEXICO, SWITZERLAND, SWEDEN, MEXICO, BELGIUM. IN 2011 WE ARE FORECASTED TO PUMP OUT A MIND BLOWING $1,000,000,000,000(ONE TRILLION DOLLARS). FOUND ON PAGE 453, FOURTH PARAGRAPH, OF BENNETT'S BOOK. IF YOU WANT YOUR OWN USE ISBN-978-0-87485-0079 OR TRY WWW.JPCBOOKS.COM. I LIKED TO HURT MYSELF READING IT. MEANING IN SOUTHERN---IT WAS A DAMN GOOD READ!!! BYE Y'ALL!!! DRINK PLENTY OF FLUIDS AND GET PLENTY OF SLEEP!!! OH EAT GOOD FATLESS FOODS AND TRY TO FIND SOME EXERCISE TIME IF YOU CAN!!! GOD BLESS, BYE!!!!
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By: BG on 10/09/2010 1:25PM
@ LISA.
First, I had separated your plight from the lessons I posted above. I hate for us to want to go into any specifics as this is not a good forum to exude pertinent information. I was only concerned reading your comment.
Here is the thing. When you find yourself in the financial arena, please, erase the idea of race baiting. Approach business as usual.
You are probably more American than I, but guess what, I get most things needed for my financial survival. The one I don't get was my fault. It was not tied to race even though race is existing. The race thing in arriving at a financial decision, is exiguous. As a matter of facts, most creditors give more respect to black people that puts their financial house in order. Oprah commands more respect from the whites more than the blacks, Tiger Woods commands more respect from the whites more from the blacks. All these meaning that when you are good at what you do, race will not matter moreso when the whites stands to gain from your success.
Creditors look at different variables to arrive at a decision. The parameter by which you were judged is not known to me.
A black lady had arrived at my dealership near closing time. I was the Sales Manager at the time. She requested to test drive a Jeep Commander. I was looking at the white sales associate passing on her. I too was already packing my stuffs to exit for the day. We were not taking her serious as often was the case.
Another black sales guy picked up her business test driving as many as three Commanders. I became irate. The F&I staff had left knowing it would be a bogus transaction.
In order for me to shut the entire thing down, I asked that her credit be pulled.
Guess what? NO ONE, I repeat, NO ONE in the history of that dealership since I had been a Sales Manager would beat the lady's score. Her score was over 800. Most blacks ranges around 500. All credit cards were A's.
The lady now changed her mind to point to the only top-of-the-line Commander on display at the showroom with ALL available gadgets and extras priced at $45k. We declined her offer. After two hours of hagglings and negotiations and rejection, she left.
I picked the phone to call the GM who was already in bed. He authorized the sales and on the lady's term.
I quickly asked that the sales guy call the lady back while I quickly grabbed the phone to call the F&I guy who arrived at the store in pajamas.
We rolled out the black top-of-the-line commander(HEMI) at a little above base price. We did not do good on the sale.
Unfortunately, our financial lives is run by numbers. It doesn't show you in true lights. Race will not be a factor here. When your number is strong, it would not matter whether you have a collateral. You will move the direction of the transaction and at your own term. The lady in my example, did not put anything down. And for what she got, that was rare.
If I could be of help, I will post you.
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By: Archie Brown on 10/15/2010 2:43PM
Please stop asking the government to help black people, and start asking black people to help black people. Have you ever thought about why the wealthy in our community do not set up angel or venture capital funding for startups. Check the portfolio of the entertainers, athletes and wealthy business owners in our community, and you will see where their money is invested. That money is invested in white america, Europe and Asia, as they say about politicians, follow the money, and you will see where their loyalty is. I hope you notice that I did not mention Africa either.
We support them and they support someone else. They are always setting up foundations for black kids and giving them hand outs during the holidays, but not helping the parents that raise them. The parents that raise them are just as important in the equation, if not more, considering the fact that they are raising the child. Our wealthy think that it is more important to focus on kids, than to create opportunites for the people that are raising them.
The research has shown that business is the number one generator of wealth. You would think that these "knee grows" would get this. The black elitist would have you to focus on the government and white community for our survival, so you will not hold them accountable. I live in metro Atlanta, and their is not one black angel capital fund or venture capital fund for black startups, if there are, please let everyone know.
You can read business publications from all around the country, and you will see wealthy whites and asians creating angel capital and venture capital funds for startups, because they know that wealth create jobs, jobs do not create wealth. Please, someone tell me why wealthy blacks are not doing the same.
The next time Bill Cosby wants to talk to someone about responsibilty, he needs to start with the boule and elitist in the black community.
"HELP THE PARENT WITH EDUCATION, CONTACTS AND BUSINESS FUNDING STARTUP, AND THE PARENT CAN SEND THEM TO COLLEGE AND FEED THEM ON THE HOLIDAYS, AND EVERY DAY - THEY NEED TO STOP HIDING FROM THEIR RESPONSIBILTY - WE ARE OUR BROTHERS AND SISTERS KEEPERS"
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