All Articles Tagged "black spending power"
Think about it — African Americans spend $850 billion annually on goods and services. Yet many African-American businesses are struggling to get by. One of the reasons is that although blacks have major spending power, they are sending very little with black-owned businesses; just 10 percent. A Census report found black-owned businesses generated just 0.5 percent of all receipts in 2007.
Part of the problem is finding businesses owned by African Americans. In the past there have been local directories such as the Black Book and Black Pages, a Yellow Pages-type of listing of African-American owned companies and shops. But now black-owned business are making use of the black communities love of technology and are using digital media to get the word out.
We reported earlier about an app called Around The Way which locates black-owned businesses in your vicinity. Now, according to Black Voice News, “Black-owned businesses are turning to high tech to boost their bottom line.” One retailer doing this, reports Black Voice News is Cloeta Sterling. She sends out twice daily text alerts about what makes her shop stand out — handmade jewelry and the kind of personal service she says you won’t find at Macy’s. With more African Americans tweeting and using other digital media, it’s increasingly becoming a channel that black businesses use more aggressively to seek out black consumers.
And black spending power is only expected to increase to a whopping $1.1 trillion by 2015, found the special report “African American Consumers: Still Vital, Still Growing” released by Nielsen and the National Newspaper Publishers Association. Black businesses want a piece of this action.
Back in 2010, Khadija Nassif of BlackEconomicDevelopment.com wrote an open letter to aspiring African American business owners that if black-owned businesses merely rely on African-American consumers it could be “disastrous.”
“I would invite all aspiring Black business owners to look around at the wreckage of most businesses that tried to do business in Black residential areas as visibly Black-owned businesses,” wrote Nassif. “The primary reason is that African-American consumers don’t want to see visibly Black-owned businesses succeed. The only partial exceptions to this rule were African-American owned hair salons and barbershops.”
Do you think things have changed since Nassif wrote her open letter? Do you try to shop in black-owned businesses?
If it’s one thing that can quickly shut down entrepreneurial dreams, it’s lack of financial capital. But according to the Washington Informer, it’s not financing isn’t the biggest problem to small black business success. The reasons why they fail, an article asserts, is due to lack of planning and marketing and adequate research. African Americans aren’t using their resources to plan correctly or take the time to discover if a business will even succeed in their area of interest.
The road to success isn’t easy and only a few have made it to the top. The article reports that less than two percent of African Americans are entrepreneurs. 2007 economic census data observes that blacks own 1.9 million nonfarm businesses in the US; just 7.1 percent of all nonfarm businesses in the nation. They employ .8 percent of the employed and earn about $137.5 billion in receipts.
In order to bring more African Americans into the entrepreneurship realm, the first step is to get the proper assistance to realize your business plan. African Americans generally don’t hire other black professionals. If you’re planning a business venture, take this time to bring other African Americans into your plans.
Next, do the necessary research. Many times entrepreneurs believe they will succeed just because they have the skill-set to do the job. But in addition to believing in yourself, you’ve got to spend time and money on determining whether or not your product or service is necessary in your community and what the competition is doing.
Lastly, advertise your business and use black media avenues to do so. Use the black community to help get your business off the ground and in turn, do some good in the black community. Hire black employees and keep the money you make in the community.
By Christina Burton
In a mostly white-owned world, black people should be able to closely relate to the few businesses that stand out as black-owned and operated. In fact, most of these companies should be pillars of the black community—they should be hiring blacks to work, putting money into black causes and helping to elect black leaders. With the race’s increased spending power at $913 billion, black money should have the potential to support some underdog black and non-black organizations that make an effort to support black power and lifestyle.
This is all happening, but not nearly enough. According to Margarita Anderson, founder and chief executive officer of the Empowerment Experiment, there are still “national, but relatively unsung, black companies [that black people] should be supporting.” Anderson and her husband, John, started the Empowerment Experiment to promote self-help economics within the black neighborhoods.
COMPANIES TO SUPPORT:
Rolling Out Magazine
Rolling Out is America’s largest black newspaper with over a million copies in circulation, especially in metro locations such as Atlanta, Los Angeles, Chicago, Baltimore. It’s “the free weekly you find in the barber shop, church, the bus stop,” explained Anderson.
The newspaper explores all subject matters and provides a fresh and thoughtful look into black entertainers, black leaders and black trends. A free publication published by Munson Steed, Rolling Out often steers clear of gossip while nailing every chance to lay black news, views and headlines out for the community to read.