The Pandemic Saw A Boom In New Black-Owned Businesses; The Largest Surge In The Last Quarter-Century!

GREG BECKHAM OWNER B&M BAR-B-QUE OPENED THE LYNDHURST LOCATION DURING THE PANDEMIC

YourBlackWorld.net, By Victor Omondi, Posted October 18th 2021

A significant number of Black Americans used the pandemic as an opportunity to turn “adversity into opportunity,” taking a moment of great upheaval to start their own businesses, according to a Kauffman Foundation study. 

On average, 380 out of every 100,000 Black adults became new entrepreneurs during the 2020 pandemic, up from 240 in each of the prior two years, according to the study, based on census data.

To be sure, the startup surge was not entirely positive. It was partly a reflection of the heavier toll the COVID-19 crisis took on Black Americans, deaths, and job and income losses.

According to research by Robert Fairlie, an economics professor at UC Santa Cruz, some 40% of Black-owned firms closed in the immediate aftermath of the outbreak versus 20% of all active U.S. businesses.

SOME BLACK OWNED BUSINESSES SHOW SIGNAGE AS A SIGN OF ACKNOWLEDGEMENT AND SOLIDARITY

The startup numbers almost certainlyincluded businesses that were simply reopening after closing during the early days of the pandemic, according to Fairlie, who coauthored the Kauffman report.

“Many of the Black-owned businesses that formed last year were what are called ‘necessity’ startups — that is, firms that people started to survive a layoff or a cut in hours or income,” reported the Los Angeles Times. “And such necessity enterprises tend to have higher failure rates than opportunity startups, which are more common during good economic times.”

Still, for many Black workers and would-be entrepreneurs, the economic crisis spurred by COVID-19 provided an opportunity to try for something better.

“They had a moment of pause induced by the pandemic,” said Everett Sands, chief executive of Brea-based Lendistry, whose bank saw a surge in inquiries from Black customers interested in starting businesses.

For some, he said, the pandemic adversities meant “Let me try something else.” And so they opened up a daycare center or used their cars to get into delivery service, Sands said.

The overall economic recovery is strong. And many more Black entrepreneurs are taking advantage of the pandemic-accelerated boom in demand for goods online. They are also making use of social media and new technology platforms to grow their brands and customers.

With that said, if there’s nothing else that comes from the pandemic, it’s the knowledge that Black men and women can and should always aspire to do better than their current circumstances.

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