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April 19, 2021

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USBC’s Ron Busby: Black businesses on life support

By Stephanie Anderson Forest

Before COVID-19, Black business growth was on the rise. According to a recent survey by the Service Corps of Retired Executives, or SCORE, between 2012 and 2018, Black business owners saw their total annual revenue grow by 23% — twice as fast as overall employer businesses in the United States. In addition, the report found that Black business owners added employees at double the rate of all other U.S. businesses, growing staff by 24% compared to 10.8% of all small businesses during the same time period.

However, SCORE — the nation’s largest network of volunteer, expert business mentors — found that COVID-19 has significantly impacted Black business success, with only 8.8% reporting profitability and growth.

Still, there is a reason for Black-owned businesses to be cautiously optimistic given early indications from President Joe Biden’s administration.

Ron Busby, founder and president and CEO of U.S. Black Chambers Inc., recently co-hosted a virtual roundtable with Vice President Kamala Harris and Treasury Secretary Janet Yellen to discuss the American Rescue Plan with members of local Black chambers of commerce.

He said the event with Harris and Yellen was especially meaningful given that it occurred in the first 30 days of the Biden presidency, “showing intention from Washington.”

Busby said the Vice President and the Secretary both stated their concerns not only regarding disproportionate challenges facing the Black business community but also the administration’s commitment to addressing the needs of Black-owned businesses.

“USBC believes this is the first in many conversations we will have with the Biden administration,” he said. “Many elements of the administration’s plan complement the advocacy efforts USBC has outlined in The BLACKprint, which is on our website.”

The 2021 BLACKprint is a set of principles that guide the U.S. Black Chambers’ policy priorities. He said the document lays out a clear vision for policymakers to move the needle on policies that strengthen the Black business community and help Black Americans thrive in the decades ahead.

“Beyond noting the honor of co-hosting this pivotal meeting [with Harris and Yellen],” Busby said, “we are laser-focused on holding the administration accountable in the spirit of collaboration, and we look forward to playing a significant role in any proposed policy solutions.”

Here, we further our discussion with Busby about the state of Black-owned businesses and the value they bring to the supply chain, pandemic challenges and solutions and more. We also have input on these topics from John F. Robinson, president and CEO of The National Minority Business Council Inc.

Q: What is the state of Black-owned businesses in the supply chain?

Busby: History has proven that when America catches a cold, Black America catches the flu. Now, we are all braving a pandemic, and Black America — in many ways — is on life support. So are Black businesses.

In just the last year, we lost 41% of Black-owned businesses of varying sizes. Larger Black-owned businesses have been forced to downsize dramatically to stay afloat. As an added layer of crisis, those who previously survived on smaller work through subcontracting have lost their livelihoods as bigger companies bundled contracts to save money.

Robinson: The state of Black-owned/minority-owned businesses in the supply chain is challenging because of the economy, the impact of the coronavirus and the global economy in general.

Q: How have COVID-19 and other recent challenges — i.e., racial injustice and inequality — impacted Black-owned businesses in America?

Busby: Black-owned businesses were faced with a trifecta of challenges in the past year.

First, COVID-19 devastated the Black community in the core areas needed for survival — two of which are health care and economics. The pandemic, polarization of measures to control the virus and burden placed on “essential workers” who are overwhelmingly Black, people of color and lower income — in addition to how sick Americans receive medical attention — illustrated quite clearly that Black people are of the least concern to America.

Second, last year’s stimulus package simply did not meet the needs of Black-owned businesses in terms of reaching our businesses. The Paycheck Protection Program is structured to help employees, but not business owners. The issue is many Black-owned businesses are cash-and-carry or smaller in scale. So, their employees may meet 1099 qualifications, but not part- or full-time employment, effectively barring them from boarding the PPP life raft.

Third, the murder of George Floyd and subsequent protests brought unrest to our communities. Many businesses were forced to close as a safety precaution. When already barely staying afloat because of the first two parts of the devastating trifecta, these unplanned closures had a lasting impact.

Robinson: It has dramatically impacted small, minority-owned, women-owned and veteran-owned businesses due to revenue loss, loss of employees and loss of business opportunities.

Q: How is your organization helping its members cope with these challenges?

Busby: The USBC works to be proactive and forecast challenges, equipping us to support Black businesses in times such as these. Early in the pandemic, we reached out to members to learn about their concerns and then created ways to address them head-on.

For example, while there are Black businesses in all 50 states, 10 of the 16 states where greater numbers of Black Americans live were below the median testing rate for the country, according to a recent McKinsey study. Since most Black businesses are located where Black people live, this means 65% of Black-owned businesses are more concentrated in just 16 states.

These same states were initially the hardest hit by the pandemic. Many Black-owned businesses in these areas were not set up to provide services using technology, so USBC helped them set up e-commerce solutions to recover and, eventually, thrive in our new virtual society.

Also, many of our members were concerned about the lack of a Black-owned business network and database. We created www.ByBlack.us to help consumers, companies and even corporations find, compare and network with Black-owned businesses.

As a third example, we noticed there was a lack of mentorship. This [deficiency] led to us establishing the USBC President’s Circle — one of the most influential networks of Black entrepreneurs who are thought leaders and proven experts in their respective industries.

Through the President’s Circle, USBC opens the door to access major corporations looking to do business with Black-owned businesses with the size, scale and financial capability to manage the magnitude of corporate contracts. Members of the President’s Circle also mentor smaller Black-owned businesses and are charged with subcontracting with smaller businesses in the USBC ByBlack.us database. This is just one effort to create a self-regenerating environment to help our members cope with current challenges.

Robinson: We are providing as much information as possible regarding business opportunities online. We share information with our membership that will help sustain their businesses through this critical and challenging economic period.

Q: What are the biggest challenges and opportunities for Black-owned businesses in 2021 — and beyond?

Busby: The biggest challenge for Black-owned businesses that we have repeatedly seen firsthand is the lack of access to capital. High-interest loans do not help build generational wealth and prosperity and could instead set these businesses back further because of the burden of interest and strain to repay the debt, while simply staying afloat. Though this is a key challenge, the big opportunity here is for a large number of Black businesses to participate in mergers and acquisitions or consortiums. In addition, placing a renewed focus on building valuable partnerships and relationships will increase scale and bandwidth for Black businesses, making them eligible for larger, more lucrative contracts in both the government and corporate sectors.

Robinson: The biggest challenge for any minority business is to stay in business. Unfortunately, there are very limited opportunities because of the overall economic situation in the country and globally.

Q: As the country settles into this new normal, what are your organization’s key plans/initiatives/programs for 2021?

USBC will continue to provide policy direction at the federal level, advocate for access to capital opportunities, enhance the visibility of Black-owned businesses and provide education and resources for these businesses to scale and thrive.

We have outlined these initiatives in a detailed, trackable plan that also includes three priorities to increase Black wealth and four principles with which policymakers should align policy. The plan is called The BLACKprint, which is the design plan for the sustainability and growth of Black businesses — and, in turn, America. The BLACKprint can be viewed on our website at usblackchambers.org/wp-content/uploads/2020/12/2021-BlackPrint.pdf.

Robinson:To keep the organization in business to service our membership’s needs by sharing new opportunities as they come that will help sustain and grow their businesses.

Q: What’s your outlook for the Black-owned businesses in the supply chain beyond 2021?

Busby: I and the USBC team who work with an unwavering passion to advance Black businesses are optimistic. Also, most Black-owned businesses that are USBC members and/or members of one of our affiliated local chambers have expressed a positive outlook for the future.

We believe this is, in part, because of the Biden administration’s stated commitment of efforts to support this community and because of internal efforts and external campaigns from corporate America to address the lack of equity in the sector — from representation within their executive leadership to the talent pools to contract opportunities being made available to Black-owned businesses.

Robinson: Fairly optimistic and promising. We encourage all minority businesses to support each other in their purchase of goods and services locally and nationwide. We must support each other during this critical time and beyond.

For more information about the National Minority Business Council, visit NMBC.org.

For more information about the U.S. Black Chambers of Commerce, visit usblackchambers.org.