Editor’s Note: This article was originally published on MadameNoire April 12, 2011.
What are the best ways to encourage entrepreneurship and economic empowerment amongst our people?
The answer to what you’ve asked is complex and loaded. A discussion about entrepreneurship and economic empowerment in the black community is one we need to have honestly and mindfully. Beyond simply talking about the answer, we’ve got to get busy and focused on taking consistent action.
Two years ago, the outlook for new entrepreneurial activity in the black community was looking up. According to the Kauffman Foundation, the world’s largest foundation devoted to entrepreneurship, the greatest increase for business creation in 2009 was among African-Americans1. However, Kauffman’s latest research shows that both blacks and non-Latino whites experienced declines in entrepreneurial activity in 20102.
While I wish the business creation rate in our community was still on an upward trend — because the more businesses started by black people, the more likelihood of seeing more of them stick around — the worthier challenge is developing the strength, stature and staying power of the businesses we already own. Therein lies the overall answer to your question.
The best way to encourage entrepreneurship and economic empowerment in the black community is to make successful business ownership routine. It needs to become an everyday, expected, normal part of our way of life. This actually isn’t just an issue in the black community. Of all new businesses started in America, 96 percent of them fail within 10 years. While that rate of failure cuts across the board, African-Americans are disproportionately affected because we lag behind all other racial and ethnic groups in the U.S. for wealth creation3. And successful business ownership is the number one way to create first generation wealth4 so this is a double whammy.
To make business success more routine in the black community we have to:
- Increase our financial literacy;
- Start with a business plan;
- Constantly train, study and execute to become smarter, more skilled entrepreneurs;
- Grow our businesses with the intention of creating jobs because employer firms vastly out earn sole proprietors;
- Operate our businesses based on principles and numbers, not emotions;
- Learn to do business internationally;
- Prepare and compete to be number one period (not just in our community);
- Start or buy defensive businesses, which are ones that provide products and services that people need regardless of economic conditions;
- Start or buy businesses in the biggest wealth creating industries—such as technology, engineering, manufacturing and energy; and
- Spread this mentality and these behaviors among our family members and throughout our communities.
On another note, we also have to teach our children and youngest family members that entrepreneurship is just as noble and respectable an option — if not more so — as building a great career at a company that is a household brand. Plus, we need to get children and teenagers in the habit of entrepreneurship early. Instead of giving them allowance or sending them off to a minimum wage job, we have to challenge them to think of creative ways to earn their own money. Last but not least, we ought to be as eager to invest in their early businesses and entrepreneurial education as we are to invest in their college education.
Grace & Peace,
Felicia Joy is a nationally recognized entrepreneur who created $50 million in value for the various organizations and companies she served in corporate America before launching her business enterprise. She is often called on to discuss the ins and outs of entrepreneurial success and has appeared on CNN, FOX and in other national press. Felicia operates Ms. CEO Inc., a company that helps women entrepreneurs achieve more success, faster — as well as Joy Group International, LLC, a business development and consulting firm. Send her your questions at email@example.com or www.twitter.com/feliciajoy.