How Black Entrepreneurs Forged Their Path to Business Success in Their Community – Nonprofit News

The following text has been excerpted with permission. Trust You, Money: What Happens When the Economy Loves Black People? Written by Jessica Norwood (Berrett-Koehler Publishers, www.bkconnection.com, 2023).

It doesn’t matter where I am or who I’m asking. Black founders almost always describe freedom as the reason they founded their companies. They want to move the way they want, manage their schedules the way they want, and participate in the life they want, rather than the version of life imagined by society that excludes or negates their contributions. I want the freedom to Human race.

In stark contrast to venture capital approaches, collective action has been fundamental to the success of Black and Black-owned businesses.

It makes me realize how different the experiences and motivations of black business owners are from those of white business owners. Black business owners are motivated to start businesses because they need income not only for themselves but also for those around them. Black founders are driven by a desire and a sense of responsibility to create economic security that can create generational opportunity for their communities and families. I think this is why so many black founders struggle on the path to venture capital. The concept of selling a company for public trading takes us away from the true purpose of business, which is to provide immediate and sustainable resources to those around us, rather than to distant masters called shareholders.

In stark contrast to venture capital approaches, collective action has been fundamental to the success of Black and Black-owned businesses. The history of businesses using collective action to bring about greater equity and justice is well documented. Jessica Gordon Nembhard’s Collective Courage: A History of African American Cooperative Economic Thought and Practice is a comprehensive study of the intersection of black business and collective action.¹ In his book, Nembhard points out how cooperatives have always been important to black people because they provided a means to earn a living despite their exclusion from mainstream finance and employment. ing. A cooperative is a company owned by the people who use its services.[ii] A cooperative organization can be a federation of workers, farmers, and landowners. Mutual insurance company. Or a bank or credit union.

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Since their arrival in America, black people have always accumulated resources. By sharing resources, we can grow healthier food, purchase land, and even purchase tractors and machinery for farming. “For two centuries they didn’t get regular wages and didn’t even own their own bodies, but they often saved all the money they could and pooled their savings to build their own and helped each other buy their freedom.”[iii] Nembhard writes. Their efforts led to the creation of mutual aid, burial, charity and insurance companies, and even purchasing clubs led by women and often connected to religious institutions.[iv]

WEB Du Bois referred to black collaboration through the medium of cooperative business.[v] He explained that cooperative business is a variety of ways in which black people share the costs, risks, and benefits of economic activities. The goal of the collective business was to help Black families and communities. And, as Du Bois documented, cooperative business was the key to ensuring economic success for black people in a racist world.

For Black business owners, collective action always reminds them that if they want safe and fair schools, hospitals, parks, and jobs for their communities, they must not only dream it, but also pay for it themselves. I’ve meant it. This means that after paying taxes on all the amenities available to white people, black business owners essentially have to pay taxes again to finance the needs of their communities. .

Black-owned businesses rely on community support and protection when it comes to unfair practices and policies.

This second tax is sometimes called the black tax. Black taxes represent the financial support that professionals and entrepreneurs of color are obligated to provide to their families and communities beyond their own living expenses and the costs of conscious and unconscious anti-Black racism. . In both cases, the impact of this tax places a significant financial burden on Black founders and significantly reduces their ability to build a significant legacy for future generations.[vi] However, black taxes were necessary to maintain black life in America. Black collective action and cooperation, which has been used to build many facilities in Black communities across the country, is the driving force behind the construction of churches, Boy Scout troops, alumni associations, and even textbooks, school supplies, and teachers’ salaries.

In 1955, shortly after the Montgomery bus boycott was announced, business leaders met at Dexter Street Baptist Church to plan an alternative transportation strategy for the workers displaced by the boycott. This was an essential moment for Black business leaders to join in the collective action of this moment. The city had a large network of black-owned taxi companies, which provided the first solution for people to get around town. But once city officials learned that this network of black-owned businesses was providing significant organizational support to the protests, police began cracking down on taxi drivers. That’s when Richard Harris, a black pharmacist, came forward and offered to start a shared shuttle service using people’s cars, even offering to set up a transportation hub at his pharmacy.[vii] The boycott would not have been successful without the support of small and medium-sized businesses, which provided a source of ideas and the ability to develop carpooling strategies.

If club owners had followed the old entrepreneurial playbook…the business would have remained closed. Instead, they chose a different path. ”

Collective action allows communities to more effectively address issues of injustice and discrimination. Black-owned businesses rely on community support and protection when it comes to unfair practices and policies. Although the roots of this history run deep, the promise and challenges of Black collective action continue to this day. for example, [October 2021], two black women wanted to open a nightclub in a commercial space in downtown Mobile, Alabama. After signing the lease, the women faced a six-month delay in getting into the space, as the license faced significant opposition from residents living near the club. Even though the nightclub is located in an entertainment zone designated for such businesses and the space had previously housed a club, residents protested that the club was too noisy, at least in public. . During city council meetings to discuss licensing, racist complaints and discriminatory restrictions were made against owners. “Is there an entertainment district on MLK Drive?” Read what neighbors are saying. Another comment asked if the management was a “rogue” person and wanted the management to undergo a drug test before opening.⁸ Both comments are filled with racist assumptions that suggest intolerance for more than just loud noises.

It was a dream for the women to open a store in the popular downtown area, but delays in opening meant thousands of dollars in back rent had accumulated. With no income coming in, no clear opening date, and ongoing conflict between the two managers and local residents, the landlord locked the women out and changed the locks. The founders had almost given up, but reached out to the community in a last-ditch effort to make something work. Within 30 days, they raised $50,000, raised directly from the community, which was enough to keep the business afloat.

If club owners had followed the old entrepreneurial strategy of saying we should go it alone, the business would have remained closed. Instead, they chose a different path…and along the way received enough financial capital and community support to ultimately earn their license. The lifeline that communities provide can breathe fresh air into businesses that are stifled and stifled by strategic discrimination.

Note

1. Nembhardt, J.G. (2014) Collective Courage: A History of African American Cooperative Economic Thought and Practice (1st ed.), Pennsylvania State University Press.
2. Ibid., p. 31.
3. Ibid., p. 32.
4. Same as above.
5. WEB Du Bois (William Edward Berhart), 1868-1963, ed. Economic cooperation among black Americans. Research report prepared by Atlanta University under the auspices of the Carnegie Institution of Washington, DC, with the proceedings of the 12th Conference on Research on Negro Issues. Held at Atlanta University on Tuesday, May 28, 1907 (n.d.). Records of the American South, https://docsouth.unc.edu/church/dubois07/dubois.html.
6. Rochester, South Dakota (2018). The black tax: The cost of being black in America. Good Steward Publishing.
7. About (n.d.) Dr. Richard Harris House, retrieved January 4, 2023, from https://richardharrishouse.com/about.
8. Moore, J. (October 6, 2021). “Despite racial controversy, first Black woman-owned bar opens in Downtown Mobile,” NBC News, Channel 15. Retrieved February 6, 2023, https://mynbc15.com/news/local/ From first-black-Female-owned-bar – plans to open in downtown Mobile despite racial controversy.