79% of Black aspiring entrepreneurs and small business owners find the odds stacked against them in building their businesses, saying they are much less likely to succeed compared with white entrepreneurs
Operation HOPE, America’s largest nonprofit financial inclusion organization, today launched the HOPE Minority Small Business Index in collaboration with SurveyMonkey. The HOPE index is intended to quantify the experiences and hopefulness of Black small business owners and aspiring entrepreneurs. Each question touches on a different aspect of their experience, from hope for business success to mentorship, risk tolerance, their access to capital, and future outlook on systemic issues that can impede success for Black small business owners.
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“We are excited to collaborate with SurveyMonkey to give voice to the Black small business community, and to identify, amplify, and rectify the unique challenges they encounter on their pathway to success,” said John Hope Bryant, Founder, Chairman and Chief Executive Officer of Operation HOPE.
Fueled by SurveyMonkey’s Market Research Solutions, the first survey consisted of 1,167 Black small business owners and aspiring entrepreneurs who are participating in HOPE’s signature One Million Black Business and Entrepreneur Initiative and its other entrepreneurial training programs throughout the U.S. The responses provided help evaluate the current social, economic, and political climates that impact Black small business owners’ ability to succeed.
The survey, which was guided by SurveyMonkey research experts, was designed to aid in identifying issues faced by Black small business owners and entrepreneurs. Key findings include:
The effects of the pandemic on Black Small Businesses continue, yet owners remain optimistic
- 98% of total Black small business owners (SBOs) feel hopeful overall about their business, yet 77% of respondents say COVID-19 will have permanent effects on the way they run or start their business. This is alarming considering that 69% are counting on their small business as their primary source of income.
Majority of Black SBOs lack adequate access to capital
- However, 57% of Black SBOs lack adequate access to financial institutions, and the top cited need to start or grow their small business is access to capital (46% overall, 59% for established business owners).
- 74% of Black SBOs expect tech innovation to have a positive effect on their business in the near future (next 12 months), making access to resources and training increasingly important
Socio-economic barriers to business development and Black entrepreneurship remain
- While 69% of Black SBOs think that the Biden Administration will have a good impact on small businesses, a staggering 90% of respondents believe not enough social, financial, and government support for Black small business development exists in the U.S.
“SurveyMonkey is proud to play our part in Operation HOPE’s work to close the gap in entrepreneurial attainment. Our vision is to raise the bar for human experiences by amplifying individual voices,” said Zander Lurie, CEO of SurveyMonkey. “The feedback from Black small business owners is clear—they need better access to the resources, tools, and funding that propel small business success. Together, we can make sure this story is told.”
Understanding Why Black Small Business Success is Important
Since emancipation, Blacks have been less likely to own businesses than whites, and the businesses that they do own are less successful on average, according to the Bureau of Labor Statistics. Lack of business mentors, financial capital, and business human capital negatively affect Black business success rates. Overall, Black-owned businesses lag substantially behind white-owned businesses in sales, profits, employment, and survival. This gap in entrepreneurial attainment is further exacerbated by the COVID-19 pandemic. Black-owned businesses struggle at greater rates than white-owned businesses in part because they entered the pandemic in less secure shape than many other companies.
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