African American owned businesses comprise one of the fastest growing segments of entrepreneurship in the U.S. But they’ve also been hardest hit by the COVID-19 economic crisis, experiencing a 41% drop in business ownership, as a new Working Paper (27309) from the National Bureau of Economic Research reveals.
It’s more crucial than ever to support African American entrepreneurship, and one of my favorite ways to do that is to invest in young people.
I’m encouraged by the energy and creativity of young entrepreneurs like Gabby Goodwin, the 13-year-old CEO of Confidence. At the age of seven, she and her mom Rozalynn invented GaBBY Bows, the first and patented Double-Face Double-Snap Barrette. Her barrettes are now featured in major retail stores like Target. Her products also now include a plant-based girls natural hair care line, and the book “Gabby Invents the Perfect Hair Bow” which shares her story as a young inventor, the obstacles she overcame and her inspiring story.
Be A Role Model or Mentor
I grew up with a father who was a tremendous role model as the first African American computer engineering executive at a major financial services firm. I followed in his footsteps and pursued a corporate career, but I often felt pulled in other directions. Although I continued to develop my corporate career, I also fed my entrepreneurial ambition by starting a small neighborhood gym in Atlanta. My partner and I wanted to create a place where children and adults could receive excellent athletic and physical training.
Every child who came through our doors was called an “athlete,” and I found myself energized by the opportunities I had to mentor these young people.
Goodwin says that her parents and other business friends are her role models. “My parents and I are first and second generation entrepreneurs, so to see them succeed without any family members to go to for help is amazing,” she explains. “When I first started, I also looked up to people like Mikaila from Me and the Bees, Alina from Zollipops, and many more, and now I am proud to call them my friends and partners in business.”
Support Entrepreneurship Education
In a former role as an executive for Visa, I reviewed a great deal of research on small business. One thing is clear: many business owners of all backgrounds lack a formal business financial education. They are good at what they do, but may not have been exposed to the foundational skills needed to run and grow a successful business.
That’s why the story of Simone Bridges is so inspiring. She is a 14-year-old baker, entrepreneur, speaker, author, and philanthropist. Her titles are CEO of Goddess Food Factory and founder of Simone Bridges Inspires Inc.
That alone is tremendous for a 14-year old girl. But she’s also dedicated to helping others succeed.
“I’m a youth advocate who aims to show other kids that they can do anything and that they are not hindered by the color of their skin or their environment,” she says. “I’m a big community leader who does a lot to introduce kids to science, technology, reading, engineering, arts, and mathematics (STREAM) education and careers.”
There are many ways to support youth entrepreneurship education, including volunteering with Junior Achievement (JA), or buying and donating books about young entrepreneurs to schools or after school programs.
Invest In Small Business
The barriers to access to capital are real. And even more so for the African American community where loans and venture capital can be so hard to come by. Research by the Ewing Marion Kauffman Foundation found that black entrepreneur’s loan requests are three times less likely to be approved than white entrepreneurs, a difference that persists even after accounting for credit scores and net worth of founders.
Accessing capital for any small business is a challenge. Did you know, for example, that lenders offering business loans don’t have to disclose an Annual Percentage Rate (APR)? As a result, unwary business owners may get trapped in loans with effective interest rates of 100%– or more!
One of the best ways to support a young person’s business is to buy their products. Support their crowdfunding campaigns on platforms like Kiva. And share your support on social media to help get the word out.
About the Author: Jacque Morgan is the Vice President, General Manager of Enterprise Partners at Nav, where she manages and enables strategic partnerships with financial institutions and industry players. Having owned several small businesses in the fitness and real estate industries, she is able to leverage her experience to provide value to entrepreneurs in the financial sector.