A survey of 2,700 African-American small business owners (SBOs), polled by Guidant Financial and LendingClub, found that there are a few key differences for this demographic compared to the overall small business owner population.
Political confidence, happiness and motivation
28% of respondents reported higher confidence in owning a small business based on the current political climate (3% less than average).
56% of African-American SBOs rated their happiness at nine or 10 on the rating scale (10 being the happiest), 2% more than the average small business owner.
The top reason respondents went into small business for themselves (28%) was to “pursue my own passion,” followed closely by “ready to be my own boss” (27%).
African-American small business owners are younger and include more women
45% of African-American SBOs are baby boomers, compared to 57% of the national average.
32% are 40-49 years old, 7% higher than the national average of 25%.
38% of African-American SBOs are women — a big distinction from the average small business owner, of whom only 23% are women.
From 1997-2015, the number of businesses owned by African-American women grew an amazing 322%, as reported by Forbes (making them the largest-growing group of entrepreneurs at that time).
Challenges for African-American small business owners
Lack of capital and cash flow is the biggest challenge (reported at 38%) for African-American small business owners, though it’s a challenge indicative of larger difficulties.
If you’d like to learn more about the differences in financing approval, the wealth gap and financing and industry trends, the full trends overview from Guidant Financial is available online.
Bonding together to create more opportunity
The African-American business community does an exceptional job of supporting others on their entrepreneurial journey. They also contribute in significant ways to try to change the future of small business owners.
For example, minority-owned businesses are more likely to hire minority workers, some of those most affected by unemployment. And from 2012-2017, minority-owned small businesses grew by 79%.
The differences in small business owners inside the African-American community are not only intriguing, but inspiring.