Starting and maintaining a business isn’t easy, and it can be more challenging if you are Black. According to Statistics Canada, more than 4.3 Percent of Canadians identify as Black, which makes up more than 1.5 million Canadians. Recent research studies by CBC Canada has shown that the presence of Black-owned businesses in Canada is growing steadily. Nevertheless, despite the steady growth, more than 95 Percent of Canadian businesses owned by Black individuals have fewer employees.
The COVID-19 pandemic took a heavy toll on many Black-owned businesses. Many of them faced an uphill battle to maintain their business. Nevertheless, that doesn’t necessarily have to spell out their doom; many were able to bounce back and get back into business. Having said that, if you are a Black business owner, you are twice as likely to face more challenges than another competitor. Here are a few reasons why.
Racism
According to a study by Mount Royal University in Calgary, many Black owners struggle to get loans to start a business or secure favorable interest rates. There are several factors that could contribute to this; racial discrimination may be one of them. A survey conducted by BDC revealed that 73 Percent of Black entrepreneurs have rejected an offer or turned away a customer because of a racially charged statement. While entrepreneurs are eager to set up and start a business, 72 Percent of Black entrepreneurs say that fear of racial discrimination stopped them from starting their own business.
Funding Challenges
To start a business, you need capital; many Black-owned businesses do not necessarily have enough to start with. That can be a big hurdle to overcome. 46.8 Percent of respondents surveyed in research by BDC said that they couldn’t start a business because of the unavailability and high cost of credit loans. Many black-owned businesses are discreet about revealing that they have the cash or liquid assets required for them to continue functioning. That, and a lack of trust in financial institutions, are often cited as one of the most significant funding challenges.
Lack of Support
Black entrepreneurs do not necessarily have the same opportunities that can open up to others in their field. Many say they lack the guidance and support they need to succeed in starting a business. Limited access to business means that they often lack training in areas like technology, marketing, and accounting needed to maintain a business.
Lack of Visibility
Visibility is imperative for the growth of any business; not only does it show people that you are there, but it also establishes credibility and leads to increased sales. Maintaining a presence isn’t easy. There are several challenges, particularly in overcoming obstacles like open communication, lack of resources, and technological barriers. Many Black-owned businesses are not known in the market because they face barriers to integration and lack the resources to succeed.
No Networking
Building relationships is the key to the success of any business, and networking can help you start a business. Lola Adeyemi, for example, wanted to start a business in Canada. Originally from Nigeria, she came to Canada in 2005 and worked in several fields before starting her own food business, Souper, in 2018. Adeyemi launched her business from her savings, but to scale up her work to the production level, she needed money to survive. The more her business grew, the bigger the challenges got. To get moving, she applied for a loan and appeared on CBC’s Dragon’s Den. Adeyemi says she is grateful to get the funding she applied for but admits that a stumbling block for many Black entrepreneurs is the lack of community above them to help them rise up.
David Messiha | Staff Writer