CASSANDRA ACQUAH | LEGAL JARGON WRITER
For a plethora of reasons, black-owned businesses have faced obstacles that have made it harder for them to survive. Whilst the current economic downturn we are facing in the midst of the COVID-19 pandemic has had a huge effect on all businesses, it has been found that this has particularly impacted those that are black-owned.
A study conducted by the National Bureau of Economic Research in the USA found that the number of black-owned businesses fell by 41% during the first few months of the pandemic compared to white-owned businesses which fell by 17%. Black-owned businesses already face obstacles when securing funding for their companies with a report by Diversity VC and RateMyInvestor stating that less than 1% of venture capital is invested in black businesses in the UK and a similarly low number being found in the US. Therefore, the impact of this economic downturn is exasperating an already difficult process of surviving with limited resources.
Multiple studies have found that a larger share of black-owned businesses operate in poorer areas than their white counterparts, and it is these areas that are most severely affected by economic downturns like the one we are currently facing. Therefore, it is even more vital that these businesses are provided with extra support to prevent them ceasing to exist.
There has been an upsurge in resources directed towards supporting black-owned businesses with Time Out producing a collection of resources to support in London and the creation of Black Nation, a black-owned business discovery app and social platform. Furthermore, Eric Collins, the chief executive and founder of ImpactX, a funding company, describes the company as “a venture capital vehicle that makes direct investments in startups founded by black and female leaders in Europe, who are disproportionately underfunded when it comes to securing financial backing”.
Of course, there is vital systemic change that is required within many organisations which will take time to tackle and enforce. Right now, these businesses deserve all the help they can get, and it is important they are aware of them and take full-advantage.
Links to a few resources for black-owned businesses:
UKBlackOwned - the largest black-owned business directory in the UK https://www.ukblackowned.co.uk
ImpactX - London based VC firm providing funding for black and female led start-ups https://www.impactxcapital.com
Black Nation App - social discovery app for black-owned businesses https://www.blacknation.app
Time Out collection of resources to support https://www.timeout.com/london/news/these-resources-connect-londoners-to-black-owned-businesses-061220
Many of these black-owned businesses are struggling to stay afloat in the midst of this economic downturn resulting in a large number of them being forced to close down.
With the rise of online sales during the pandemic, it will be important for these businesses to try and follow the consumer trends and ensure they have a stable online presence. Ensuring they continue to make sales and profit.
Additional support in the form of free legal advice to black-owned businesses on matters of intellectual property, tax and employment for example.
Cassandra is an aspiring solicitor with interests in retail and media, as well as the steps being taken to increase diversity at all levels within the legal sector.