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This piece was written before the shooting of Jacob Blake at the hands of police in Kenosha, Wisc. and the aftermath, including the apparent killing of two protesters by a 17-year old gunman. These tragic events provide yet another grave reminder of how far we have to go as a nation in order to ensure that all people can be honored, respected, and safe in our public spaces, and the critical importance of addressing systemic racism within our communities.
In honor of National Black-Owned Business Month, we have been highlighting Black-owned businesses from our network and showcasing community-led efforts to support Black entrepreneurs. To complement these stories, our research team dug into some of the data about the state of Black-owned businesses on Main Street, the structural challenges they face, and how Main Streets can support them.
Read on to learn more and join us in highlighting and sharing the stories of Black-owned businesses to build awareness of the impact that Black entrepreneurs have on our local economies.
This National Black-Owned Business Month, we spent time reviewing what data and research is out there on Black-owned businesses throughout the U.S. Between protests in response to violence against Black Americans and news of the disparate impact of COVID-19 on Black Americans, this has been a deeply troubling and difficult time for many.
Despite many Black business owners’ ingenuity and resilience, Black-owned businesses are confronting especially difficult circumstances related to the novel coronavirus and may take particular benefit from support during the economic crisis of COVID. This blog post is focused on understanding the realities facing Black business owners today—both challenges and opportunities- so that Main Street programs and other economic development organizations are better positioned to support these entrepreneurs. Click the links below to jump to each section of this post.
Recent Government Statistics on Black-Owned Businesses | The Structural Challenges Facing Black-Owned Businesses
Impacts of COVID-19 on Black-Owned Businesses | Main Street and Black-Owned Businesses
How Can Main Street Programs Support Black-owned Businesses and Black Entrepreneurs?
Recent Government Statistics on Black-Owned Businesses
Data from the U.S. Census Bureau’s 2017 and 2012 Surveys of Business Owners and Self-Employed Persons provide a baseline understanding of the number, geography, and scale of Black-owned businesses across the country. Here are a few quick takeaways from the data:
- In 2012, nearly 2.5 million Black-owned businesses were operated without employees aside from the business owner. 96 percent of Black-owned businesses operate with a sole owner-operator.
- Between 2012 and 2017, there was a 14 percent increase in Black-owned businesses that have employees, from 109,137 in 2012 to 124,004 in 2017. That constitutes a proportional increase greater than those for White Americans (7 percent) or Hispanic or Latino Americans (12 percent), and slightly less than the increase for Asian Americans (16 percent).
- In 2017, there were far more Black-owned employer businesses in large cities and their surroundings than in more rural areas of the country. In the largest 100 metropolitan areas with data on Black-owned businesses, there were about 3.4 Black-owned businesses per 1,000 Black residents. Outside those large metropolitan areas, there were 1.8 Black-owned businesses per 1,000 Black residents.
Above: The 100 most populous metropolitan areas in the country (shown in yellow) cover 6 percent of the U.S. land area but contain 64 percent of the U.S. population. Rural and non-major metro areas (shown in blue) cover the remaining 84 percent of the land area and contain 36 percent of the population along with 65 percent of the 2020 accredited and affiliate Main Street programs (shown as dark grey dots).
The Structural Challenges Facing Black-Owned Businesses
Black-owned businesses often face challenges that other businesses do not. These challenges have their roots in policies that have had a disproportionate and negative impact on Black Americans and African American communities.
Compared to White-owned businesses, Black-owned businesses generate less revenue, have fewer employees, are less profitable, and have lower survival rates (Fairlie and Robb, 2007; Farrell, Wheat, and Mac, 2020). Robert Fairlie and Alicia Robb (2007) analyzed an array of census data to understand what might explain these racial differences in business performance, and they found that Black Americans’ relative lack of experience working in a family-owned business or in a business that sells similar goods and services prior to becoming a business owner is linked to worsened business outcomes. Some of the racial disparities in business ownership can also be explained by the disparate levels of wealth among Black and White Americans (Fairlie, 2018).
Researchers at the Brookings Institution have recently published two major reports on the devaluation of assets in Black neighborhoods. In the first study, Andre Perry, Jonathan Rothwell, and David Harshbarger (2018) analyzed real estate data alongside census records and found that homes of similar quality and in neighborhoods with similar amenities were worth 23 percent less in neighborhoods with a majority Black population, compared to neighborhoods with few or no Black residents. The average home in a majority Black neighborhood was valued $48,000 less than a comparable home in a neighborhood with few or no Black residents, and in aggregate across the 100 metropolitan areas they analyzed, that amounted to $156 billion in cumulative devaluation. This devaluation means Black homeowners accumulate less wealth, which in turn leaves Black Americans with fewer resources to leverage for lines of credit and launch businesses.
In the second study, Perry, Rothwell, and Harshbarger (2020) analyzed Yelp reviews and business records and found that although minority and nonminority business receive comparable ratings on Yelp, businesses located in majority Black neighborhoods received lower Yelp reviews and fewer reviews overall than businesses in other neighborhoods. Given that higher Yelp ratings are statistically linked to more revenue growth and that a greater number of reviews is linked to faster revenue growth, lower Yelp ratings and fewer Yelp reviews represent a form of commercial devaluation. The researchers estimated the cumulative impact of lower and fewer ratings in majority Black neighborhoods represents between $1.3 billion and $3.9 billion annually.
Impacts of COVID-19 on Black-Owned Businesses
Compared to other businesses, Black-owned businesses are more likely to be located in areas of the country that have had major COVID-19 outbreaks since the pandemic began in February 2020 (Mills and Battisto, 2020). In a recent research brief from the New York Fed, Claire Kramer Mills and Jessica Battisto (2020) point out that such a correlation portends greater likelihood of business disruption as a result of mandated closures as well as greater inhibition of spending as consumers try to avoid catching and spreading the disease.
A widely-reported recent study by Robert Fairlie found that 41 percent of Black business owners had shuttered their businesses in the first month of the COVID-19 pandemic, compared to 17 percent of White-owned businesses during the same time period. Subsequent to that study, Fairlie has continued tracking responses to the U.S. Census Bureau’s Current Population Survey and in a working paper update to his study, he reports that as of the June Census data update, 19 percent of Black businesses owners still have not reopened their businesses, compared to 10 percent of Latino business owners and Asian businesses owners and 5 percent of White business owners.
There is evidence that Black business owners have not received the same levels of federal COVID-19 relief from programs like the Payroll Protection Program (PPP) that other business owners have. According to survey results from Goldman Sachs’ 10,000 Small Businesses program, 79 percent of Black business owners applied for PPP funding, compared to 91 percent of small business owners overall, and just 40 percent of Black business owners were approved for PPP funds, compared to 52 percent overall. Geographic analysis from the New York Fed further suggests that the PPP had limited uptake in areas of the country that have high proportions of Black-owned businesses (Mills and Battisto, 2020).
According to analyses from the Center for Responsible Lending and the National Community Reinvestment Coalition, racial disparities in the delivery of PPP loans may be due in part to Black business owners lacking strong relationships with banking institutions. A separate study from the National Community Reinvestment Coalition points to another potential cause: In matched-pair “mystery shopper” testing, Black and White researchers approached 17 banks in the Washington, D.C. metro area to inquire about lending options, including PPP loans, and in 43 percent of cases, White testers received more favorable treatment than Black testers. Despite presenting slightly better economic information, Black testers were less likely to be encouraged to apply for a loan and less likely to be encouraged to become a customer of the bank. Black testers were also given less information about loan options.
Main Street and Black-Owned Businesses
Given these statistics on Black-owned businesses nationally and what we know about the disproportionate impacts that COVID-19 has had on them, we now turn to the state of Black-owned businesses on Main Streets and some outstanding research questions we would like to pursue to have a clearer picture of how Main Street programs can best support them.
We know that there are Black-owned businesses in Main Street districts across the U.S., but we do not currently have a clear sense of Black business owners’ locations, characteristics, successes, and struggles. About six percent of respondents to our March/April national survey on the impacts of COVID-19 on small businesses said their business was owned by a person of color, and about three percent of respondents to our new survey on small business recovery from COVID-19 identified as Black or African American small business owners.
It seems likely that some Main Street programs have much higher rates of Black business ownership than the three or six percent national rates of respondents in our surveys. To test this, we mapped and analyzed the locations of Black-owned businesses listed on Intentionalist.com, an online guide for intentional spending, alongside the locations of Main Street districts in Washington, D.C. Of the 59 Black-owned businesses in D.C. listed on Intentionalist.com, 35 are located in Main Street districts—59 percent of the total for the District.
These findings point to the opportunity to conduct further research on the locations and characteristics of Black-owned businesses, which would enable us to better understand what a force for inclusive revitalization and an advocate for Black entrepreneurs Main Street programs can be. By gaining a clearer picture of Black-owned small businesses in Main Street districts, we can assess the impact of Main Street for different communities and develop programs that build wealth and support new kinds of entrepreneurship.
How Can Main Street Programs Support Black-owned Businesses and Black Entrepreneurs?
We believe that Main Streets are for everyone and we know that Main Street directors strive to support White, Black, and Brown business owners alike. But given the pervasive policies that disproportionately impact Black business owners, more can and should be done to support Black-owned businesses on Main Street and everywhere.
So what can Main Street programs offer Black business owners and Black entrepreneurs? Here are a few ideas to start:
- Highlight and share resources tailored to Black business owners! Resources like this blog post from the U.S. Chamber of Commerce can help guide Black business owners as they work to secure capital. Websites like helloalice.com were established as platforms for entrepreneurs of all backgrounds.
- Develop programs to support Black entrepreneurs, like the BIPOC Pop-up Markets on Alberta Street.
- Learn about community wealth building concepts in this article from the National Main Street Center’s Director of Urban Programs Dionne Baux.
- Spotlight Black-owned businesses in your district! Some Main Street programs like Main Street York in Pennsylvania have promoted Black-owned businesses by sharing Black business directories on their websites and over social media.
- Learn more about struggles against anti-black violence and incarceration and the Black Lives Matter movement, and consider sharing resources externally.
Meet the Authors
Michael Powe, Ph.D: As the Director of Research, Mike develops research projects that demonstrate the power and potential of Main Street communities. This includes work managing research partnerships, steering research efforts from design through execution, and gathering and analyzing data related to the performance of Main Streets across the country. Mike has more than 15 years of experience conducting groundbreaking research on the links between communities’ physical fabric and their social, cultural, and economic vitality. Between 2013 and 2020, Mike led research for the National Trust for Historic Preservation that empirically assessed the contributions that existing buildings and commercial districts offer cities. He holds a Master of Urban and Regional Planning degree (2006) and a doctorate in Planning, Policy, and Design (2010), both from the University of California, Irvine.
Brittanii' Batts: As Associate Manager of Projects and Research, Brittanii’ serves as a liaison with potential awardees and potential borrowers. She implements grant reporting schedules, tracks loan repayments, and reviews loan applications and their processes. Working collaboratively with the team, Brittanii’ vets potential revitalization related projects and tracks improvement in loan agreements. Working closely with the Vice President of Revitalization Programs, Brittanii’ is helping to expand NMSC’s research objectives using GIS data analysis and visualization. Brittanii’ has a background in environmental biology and urban planning, earning an M.A. in Urban Planning and Policy with a Geospatial Analysis and Visualization Certificate from the University of Illinois at Chicago and a B.S. in Integrative Biology from the University of Illinois at Urbana-Champaign.
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This May marked the 100th anniversary of the Tulsa Race Massacre in the Greenwood neighborhood of Tulsa, Oklahoma. We explored the impact and legacy of this tragic event.
Tulsa, OK © Dr. Tiffany Crutcher
Main Spotlight: Creating a Community for Inclusive Entrepreneurship in Fremont, CA
Learn about the various programs and initiatives that Fremont is using to promote inclusive economic development.
Fremont, CA © Fremont Economic Development
For an Inclusive Recovery, We Need Support for Small Business and the Groups that Help Them
BDOs are place-based organizations that help small businesses and entrepreneurs to flourish. They have been on the frontline of support for the country’s hardest-hit entrepreneurs throughout the pandemic and have been working to enable thriving commercial corridors throughout the crisis.
Main Spotlight: Five Takeaways on Supporting Entrepreneurship from Matthew Wagner, Ph.D.
Matthew Wagner, Ph.D., Chief Program Officer at Main Street America, was featured on Breaking Down Barriers: a podcast from Startup Space highlighting stories of community leaders who break down barriers to entry for underserved and unrepresented entrepreneurs.
Main Spotlight: Windows of Opportunity — The Transformation of Empty Storefronts on Main Street
A vacant storefront is the perfect stage to creatively promote the available space or to showcase other businesses and events in the area.
Ripon, WI © RetailWorks, Inc
Small Businesses E‑Commerce Usage Continues to Increase as Holiday Revenues Were Mixed: Results from Our January 2021 Survey of Small Business Owners
We heard from 289 business owners in 35 states plus the District of Columbia in our new text message-based survey of small business owners across the network.
Community Spotlight: Paving the Path from Pop-up to Permanent at the Batavia Boardwalk Shops
The Batavia Boardwalk Shops are freestanding, purpose-built structures acting as seasonal pop-up locations for entrepreneurs, offered in tandem with a business incubator program.
Batavia, IL © April Duda Photography
Business Spotlight: Black Entrepreneurs Leading By Example in Chicago
For Black History Month, we want to recognize and celebrate the Black business owners and entrepreneurs who have overcome challenges and obstacles in launching and running their own businesses, thanks to resilience, creativity, and hard work.
Main Spotlight: Pop-Up Retail: Not Just For Start-Ups, And Other Learnings From Its Evolution
As a vital place factor within an entrepreneurship ecosystem, pop-up programs allow for emerging businesses to test their product, gain consumer feedback, and promote their brand at an extremely low cost. In essence, allowing for a ‘fail-fast’ product development cycle.
Asheville, NC © Ablohkin
Coping with the COVID Crisis in the Midst of the Holiday Rush: Nine Takeaways from Our December Surveys of Small Business Owners and Main Street Programs
In early December, as the COVID-19 crisis intersected with a peak moment in the holiday shopping season, we surveyed small business owners and Main Street programs to learn more about how they were managing.
© Cindy Shebley
Jump off the Business Recruitment Train: The Real Returns are in Cultivating Local Entrepreneurship
New research by Main Street America suggests greater returns on our missions and resources can be had by transitioning to more deliberate economic vitality work centered on cultivating new business development from within our own communities and neighborhoods.
Community Spotlight: Storefront Activation Through Storytelling in Fredericksburg, VA
Fredericksburg Virginia Main Street (FVMS) is taking storefront activation to a new level with their new initiative, the Scan & Love Project, which tells the stories of business owners through personal and engaging videos.
HartBeat of Main Street Grant Program: Spotlighting Tina’s Timeless Threads
Meet a recipient of the HartBeat of Main Street Grant Program
HartBeat of Main Street Grant Program: Center of the Yarniverse
Meet a recipient of the HartBeat of Main Street Grant Program
HartBeat of Main Street Grant Program: Spotlighting The Bankery
Meet a recipient of the HartBeat of Main Street Grant Program
HartBeat of Main Street Grant Program: Spotlighting BuzzBomb Brewing
Meet a recipient of the HartBeat of Main Street Grant Program
HartBeat of Main Street Grant Program: Spotlighting The Owl Wine Bar & Home Goods
Meet a recipient of the HartBeat of Main Street Grant Program
HartBeat of Main Street Grant Program: Spotlighting Griff Goods
Meet a recipient of the HartBeat of Main Street Grant Program
HartBeat of Main Street Grant Program: Spotlighting Mockingbird Bar and Tacos
Meet a recipient of the HartBeat of Main Street Grant Program
Economic Gardening Takes Root: Redesigning the Bricks & Clicks Business Retention Program During the Pandemic
Harrisonburg Downtown Renaissance explores how they redesigned their Bricks & Clicks Business Retention Program during the pandemic.
Business Spotlight: Women-Owned Businesses on Main Street (Part 3)
Meet some amazing women business owners!
Local Impact: Small Business Saturday
Small Business Saturday® is more than a day to shop. It’s a nationwide movement that shines a spotlight on the importance of supporting small businesses in communities across America.
Community Spotlight: Benson, North Carolina
The Town of Benson started a special project to highlight their downtown businesses.
Community Spotlight: Berkley, Michigan
The Berkley Downtown Development Authority (DDA) proudly debuted its Downtown Berkley Shopping Bag for a Cause through a partnership between Better Life Bags.
Main Spotlight: Learnings from the ESHIP Summit
Supporting new and existing small businesses, and the entrepreneurs who run them, represents a vital aspect of the revitalization of downtowns and neighborhood business districts.
Creating Equitable, Inclusive and Transparent Cities: A Year in Review
The Equitable Economic Development Fellowship is a two-year, one million-dollar effort funded by the Surdna Foundation and the Open Society Foundations to help equity, transparency, sustainability and community engagement become driving forces in local economic development efforts.
Community Spotlight: Mini-Grants Offered to Small Businesses in Jefferson, Iowa
The Jefferson Rotary Club partnered with Jefferson Matters: Main Street to offer mini-grants for building facades and storefront signage to two dozen businesses for up to $500 each.
A Memorable Makeover on Main Street
The Wisconsin Economic Development Corporation (WEDC) partnered with Retailworks, Inc., a commercial interior design, display and branding firm headquartered in Milwaukee, to launch Wisconsin’s Main Street Makeover Contest.
Creative Discovery on the Maker Trail in Enid, Oklahoma
Kelly Tompkins of Main Street Enid shares more about the Maker Trail project and how it inspired creativity and helped people discover downtown.
City Sidewalks, Dressed in Holiday Style
Too often, as we’re strolling our favorite Main Street, we pass empty or dark shop windows that make us want to hurry home a little bit faster. Imagine instead, a charming streetscape adorned with vibrant, lively window displays, showcasing retailers’ favorite products and seasonal gift ideas.
Community Spotlight: #ShopSmall in Goldsboro, North Carolina
Small Business Saturday promo pic from Downtown Goldsboro, North Carolina, showing all the folks who took the pledge support a small business in their community.
Using Local Search Trends to Attract More Customers to Your Main Street
We’ve put together a practical list of some of the things that local store owners can do right now to help them capitalize on this increasing trend in local searches.
Network Spotlight: Main Street Iowa Restaurant Week
From authentic comfort food to farm-to-fork fresh and everything in between, these restaurants, bars, and cafes are key to the thriving social, business, and residential life in the historic commercial districts in Main Street Iowa communities.
Fab Lab Sparks Rural Opportunities
Located in southeast Kansas, Independence (pop.8,799) is home to Fab Lab ICC, which is on track to be the world’s leading innovator in combining entrepreneurial mindset education with a fab lab maker space.
Community Spotlight: Morganton, North Carolina
The craft beer industry is playing a key role in the rebirth of Main Streets and neighborhood commercial districts across the county.
Rethink Storefront Accessibility to Rethink Community Viability
Appealing to mobility-challenged shoppers yields benefits beyond the store.
Sparking a Movement in Small Business and Small Towns
Being the only person in the know can be fun, exhilarating even. Except when you are the one person out of 600+ in a room and you know bad news is coming.
The Lowdown in Downtown LaBelle
Fritz the dog has made his way into the hearts of the residents of LaBelle, Florida, and helped our Main Street Community find a way to make what we do more noticeable.
Pop-Up Altavista 2.0
Altavista On Track, the local Main Street organization, is working to cultivate and sustain local entrepreneurs with an educational business launch competition, Pop-Up Altavista 2.0.
The Bright Center: A Space for Winchester’s Bright Minds to Create, Innovate and Thrive
In Winchester, Virginia, one woman’s vision and commitment to downtown’s revitalization created an innovative community space for the Creative Class.
Why Business Retention and Expansion Plans are Important for Downtowns
A business retention and expansion plan, properly implemented, not only helps keep businesses open but possibly even helps them expand.
Business Investment Guides: “Think B.I.G.”
The first rule of conducting business is “make it simple.” The easier it is to pay for merchandise, get entertainment or obtain a service, the more likely it is that people will take advantage of those options.
Small Box – A Creative Retail Project
Main Street communities across the country are no stranger to seeking creative strategies to solve their most nagging issues – vacant buildings, marketing downtown, bolstering retail to name a few.
Supporting Immigrant Entrepreneurs in the Heart of Boston’s Main Streets
To understand the role that immigrant business owners play in Boston’s small business ecosystem, you need only to walk through any Boston Main Streets district.
Measuring the Economic Impact of Storefront Improvements
Façade appearance is a critical aspect of the overall aesthetic appeal and unique character of downtown.
Sign Design Guidelines
A lot of signs are necessary to make a downtown work well, but not every community knows what a good sign system looks like, or how instrumental it can be to the creation of a successful downtown.
Improving Performance in Main Street Iowa Communities
Main Street Iowa, a program of the Iowa Economic Development Authority’s Iowa Downtown Resource Center, created a one-of-a-kind three-year program to provide help for performance venues located in Main Street districts.
