Updated: Nov 30, 2021
Back-in-the-day the 1960’s, there was fewer opportunities for would be entrepreneurs to enter the marketplace and for experienced ones to grow and expand. During the late 1960’s and early seventies Black businesses were emerging from the Jim Crow era where they had little opportunity to exist outside of their communities and where the would be entrepreneur equally had little experience except for those with skill set derived from using their hands. Businesses particularly after the civil right riots following the death of Dr. Martin Luther King, Jr would only be located within the largely Black community. Never-the-less, the businesses that were created tended to depend on responding to markets created by the residents of those communities.
Businesses were created by the sweat of the brow as funding as almost impossible even from the local Black banks or insurance comp of the day. The Johnson administration started the ball rolling when it funded the Office of Economic Opportunity and the US Small Business Administration joined in with its’ Six by Six program. The six by six program would lend $6,000 for 6 years to those business affected by the riots. Almost all lending was personality/family lending and those with a good family name may get an opportunity to borrow from the Black bank while any type loan from a white bank was almost non existence.
President Richard Nixon, utilizing the US Department of Commerce created the Office of Minority Business Enterprise which funded various nonprofit agencies across the country which provide technical advice and loan packaging services to the aspirants of the 1970’s. However, these groups did not provide direct funding but worked with banks and businesses to stimulate finances where and when possible. Again, thus the loans were not very large as the entrepreneurial pool was willing but shallow.
However, during these times the commitment to become a part of the community was strong as was the tenor of the times as it was common to recognize the stimulants of the Black Panther Party, and Muslim. Also, also stirring the pot was Dr. King, SNCC, the beginning of Operation Push, the Black Economic Union and the Interracial Council for Business Opportunity and others. The point Black Pride was overflowing and the push for economic equality was just beginning.
As mentioned most Black businesses were located within the Black community and employed community persons. This challenge was countersupported by such actions as Redlining, corporations and government were not supportive, many industries would not eagerly allow Black firms to enter let alone compete with a white firm for market share. These facts coupled with racist beliefs made Black business development and success a rocky road.
Further, as the educational opportunities opened up and particularly corporations began to see even greater sources of revenue from Black communities the Black personal care business took off along with their instruments created BY Black businesses to reach these potential dollars. Franchising especially fast-food franchising also began to grow. Any white firm that had products and services it believed the Black community could use began to develop strategies to penetrate the Black market. And what better way that through Black firms. Whether intentionally or not they created a service industry with varying obligations back to the white underwriters and which they controlled.
This recognition led to further expansion when recognized by other corporate consumer markets and their desire to gain market share. This quest led for major corporations to become known for their involvement with Black firm as suppliers and other type of contributors to corporate outcomes. Thus, the beginning of Minority Purchasing programs in the early 1970’s and the utilization of Black businesses becoming formed by young entrepreneurs who now had the advantage of education and some relationships stimulated by these relationships. Never-the-less, the vast majority of Black firms were relegated to the Black community or its fringes. Over this decade it was common for Black business persons to be seen by both Black and white communities as community leaders and respected for their successes.
Additionally, Black communities were uprooted with disbursal of communities themselves.
However, a greater gap was soon created between those seeking to do business with the White community and businesses which had greater opportunity than to remain situated within the Black market. These firms had to follow the rules and market dictates of the majority businesses and customer and had to leave the Black community and become a part of the wider white community even though most still were on the fringes.
During the 1980,90’s and 2000’s Black businesses grew in type and sophistication. Higher education and greater employment opportunities began to take hold and provide experience and knowledge not previously available. Entrepreneurs grappled for market and found support from local and federal governments as primary markets which further stimulated new and differing types of Black businesses. Additionally, the governmental marketed placed new demands on majority white firms no matter their size to utilize Black businesses as suppliers, partners, and collaborators.
However, a few things remained constant: 1) Loans and other financial stimulates were still far and few between especially for working capital; 2) their primary growth and development customer had a government affiliation; 3) Many markets were still restrictive to Black entry utilizing almost Jim Crow barriers 4) The Black community suddenly lost those business locations which made it easier for job involvement 5) The Black business location took them out of the community and community leadership.
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