By now the racial wealth gap is well-documented. According to the 2012 Survey of Business Owners, 2.58 million Black-owned businesses in the U.S. generated $150 billion in annual revenue and supported 3.56 million jobs. Businesses owned by Black entrepreneurs are one of the fastest-growing segments of the U.S. business community. Yet despite a strong entrepreneurial spirit among Black Americans, Black-owned businesses are more likely to fail. Given the potential for entrepreneurship to be a tool to close the racial wealth gap, it is critical to understand the unique challenges that Black entrepreneurs experience when starting and growing their businesses, and how institutions, programs, and policy can best meet their needs.
To address the barriers that Black-owned businesses face, the Association for Enterprise Opportunity (AEO) invested in a research initiative entitled “The Tapestry of Black Business Owners in America.” The study found that three major barriers impede the establishment and growth of Black-owned businesses: the wealth gap, the credit gap, and the trust gap. AEO’s research demonstrated that by addressing the wealth, credit, and trust gaps that have historically limited Black-owned businesses, a more inclusive economy would emerge, supporting more entrepreneurs.
The research informs our policy and our innovations … All of our work has to be high impact for the entrepreneur, it has to be scalable, and it has to be sustainable for nonprofit organization members to be able to implement it on a sustainable level.
– Connie Evans, CEO of AEO
Did you know?
Black households have just one-tenth the net worth of White households.
Association for Enterprise Opportunity (AEO)