Entrepreneurship may seem like flowers and roses on social media due to the freedom from the office, but that’s not necessarily true. Entrepreneurship is a big gamble of wins and losses. It may seem even more so for black entrepreneurs. Yes, “being your own boss” seems like a good idea, however, one needs to think about many different things to start their business. Here are the four key things that can make your company seem good or bad for black entrepreneurs.
Finding your key Values
First, we need to consider what makes a company good or bad. It depends on the company’s values. Each entrepreneur has values that they include in their business model, just like any customer has key values they use to find those businesses. For example, some values can be shopping only at local businesses, supporting black entrepreneurship, avoiding chain businesses, etc. In each of these company values, a business needs to be clear on who, what, and why they make the decisions they make to have their “best” business. This is a key starting point for those wanting to join others in black entrepreneurship.
Giving your audience what they want
You also need to consider who your audience is. You cannot support everyone unless you are a necessity, and even necessities have an audience. Take, for example, toilet paper. Everyone needs to use it (except for the sophisticated countries that use a bidet like Japan). Take this company called Peach, a luxury bath tissue company that is e-commerce based. Their audience likes the luxury experience everywhere. Their tissue is organic and sustainable, and they want their funds to go to support a cause like protecting domestic survivors. Peach knows their audience well.
You can also hurt your key audience by trying to expand it. The company, Sundial, that is the founding company for Shea Moisture was acquired by Unilever in 2017 for $240 USD Million. As the company expanded, they began to receive complaints from their key customers, African American women, about the change in their formulas. After marketing to other audiences under their value of inclusivity, they broke trust in their African American customer that trusted Shea Moisture to create products for their hair types.
Next, what do you need to start your own business? A product, a market, and of course, money! Each business needs start-up money to manage the costs that will be more expensive than your beginning revenue. It can be a good challenge for you to figure out what is the best financing to take. It can get you involved in your community by asking for cash donations from your local church, business union, or family investment.
As you may get further into your business, you may look for outside investments like angel investors to help you. An angel investor provides capital (aka money) to your business in exchange for a portion of your business. Or you can get acquired by another company that may leave you in control and expands your audiences. A good resource is to look at Mrs. Dow Jones’ Youtube videos on investing and the stock market.
Marketing as a Black Entrepreneur
After months and even years of working, you feel accomplished that your work is paying off. Your business is flourishing and you branch out with your advertising. As The Honey Pot Company finds out, sometimes there can be a negative reaction to your message. The Honey Pot Company is a feminine-care brand that sells pads and other menstrual items through their e-commerce and vendors like Target. In their support for black-owned businesses during US Black History Month in February, Target highlighted the Honey Pot company through an advertisement campaign that went viral.
Unfortunately, there is a good and bad side of being viral. Their owner, Bea Dixon, is a key example of a success story for black entrepreneurship. The company began to receive negative reviews online via Target’s website after the founder shared her personal story of why she created her company in order to support black women.
Luckily for The Honey Pot Company, their community of black women had their backs to support them. Black women and their allies rushed to the Target stores across the country to buy their products and post great comments on their Target’s eCommerce page in support.
Other companies may not be so lucky. Negative press can truly hurt a brand and your customer’s trust.
Deciding The Good Vs. The Bad for your Business
These four categories can make or break your business as an entrepreneur. However, being a minority business is even harder. The three main challenges for the black entrepreneurs according to the 2020 African American Trends by Guidant Financial are lack of cash flow, marketing, and time management. This is important due to the failure rate of businesses is at 20% in the first year and 50% in the 5th year according to the US Census.
Focusing on these four categories should help you understand how and why your business should be effective. Create a business plan and build the values of your brand. As one of my old professors says, “Strategy before creative.” You need to understand how and why before you create the what (which is your product).
Bring people on your team that can help you understand this better. Hire a black freelancer in the industry that can help you with your marketing, copy and more. Look into a financial planner and your local business union for support. Supporting other black entrepreneurs in your new life in black entrepreneurship can be another value-added to your business.
Black Entrepreneurs should be supported in their communities, in turn, they should support the communities they are in as well. You can be inclusive in your message, branding, and marketing. However, when a customer loses trust in you, you begin your downfall.