If you remember my first blog post, I talked about being pushed into the deep end of the pool not knowing how to swim. Well, right now many African Americans are feeling like they have been push into the deep end of the swimming pool, not knowing how to swim. We are dealing with Covid-19, racism, police brutality, unemployment, and home-schooling. If any of you have seen the new math these kids are using, you will understand why I mentioned this!! All I know is to stack the numbers, carry the one and borrowing. I’m sure I’m not alone, lord help us all. The great thing about us though, as a race of people, we are survivors.
Now is the time to pull on the strength that we have. According to InsiderRadio.com, Nielsen reported in 2019 that African Americans command $1.3 Trillion in spending power. Take a look at the report I have included from Nielsen. Scroll through an eye-opening fact about how we spend money, especially in the beauty industry.
Black consumer spending makes up 85% of the $63 Million Ethnic Hair and Beauty industry. Black women fuel the industry and yet you probably can’t think of one black-owned beauty supply store in your area. Ok ok, you may find one, but for the most part, you will find a Korean beauty supply store. I’m not hating on the Korean’s at all, I’m just saying that it is time for us to step us and shift our mindset from being a consumer or an employee, to being an owner.
So then how do we compete? I talked about this in two episodes of my podcast Life Ain’t Fair: Redesign It, you can find wherever you listen to podcasts and you can find it on my website. There are over 2 Million black-owned businesses. That’s great. That says that our people have an entrepreneurial spirit and don’t mind taking the chance of being a business owner. They see the benefits that come with ownership. However, the failure rate for these businesses are higher than the national average rate of 50% of companies that fail within the first year. So why are we failing in business? There are several reasons and we will start with just a few.
First, there is a lot of self-hatred within our community. Have you ever heard someone say that they don’t fool with black businesses? I know I have, and it bothers me to no end. A person has had a few bad experiences and now all black businesses are bad in their eyes. I then begin to ask these same individuals if they have had nothing but glowing experiences with white businesses, i.e., cell phone companies, grocery stores, fast-food restaurants. We all know the answer to that, and yet they still patronize them. If we don’t support black-owned businesses and others don’t support us either, how can we win? Black-owned business owners must understand that they can’t produce a subpar product or service and expect people to support them. If we are asking people to leave a brand that they like and are loyal to, we must meet and exceed their expectations. We, as consumers, must understand that black-owned businesses’ pricing may be higher than their competitor because they may not have the luxury of buying wholesale, which would allow for lower prices.
Second, poor business planning. I can’t tell you the countless amount of times I have had conversations with small business owners who don’t know basic business principals, specifically how to strategically plan for growth. It’s no fault of theirs because of them are creatives and are good at the product or service they render. However, they don’t understand that it’s not enough to have a good product or service if you don’t understand ROI, SWOT, Trending, Forecasting, Market Analysis, Brand Strategy, Cash Flow, Balance Sheets, just to name a few. As an Operations Manager for decades in Corporate America, these things come easy to me, but not for most business owners. A business can’t survive from month to month, and there should be projected revenue for at least 3 to 5 years. Instead of them seeking help from someone, they are just producing products with no clear strategy for growth. I often hear small business owners say that they can’t afford help, and I respond that if you can’t afford to build a team around you to help you with the areas where you are weak, you are probably moving too fast in the business venture.
So I ask, can black businesses really compete? Yes we can, but it’s going to take work from all of us, so let’s start with the first two things I have listed. Let’s stop self-hating and buy black and let’s dominate the market; we can do it.