ECONOMIC EMPOWERMENT: THE IMPORTANCE OF SPENDING THE BLACK POUND

It would be ignorant to state that the recent Black Lives Matter protests pertain solely to the United States when in reality they concern every Black person, particularly those in the diaspora, regardless of their socio-economic standing. Although the scenes and stories that have gripped the world over the past few months have incited many to action, there remain despondent members of the community who recall the inability of previous demonstrations to result in tangible change. However, a distinctive and significantly transformative feature can be identified within this latest movement, the concerted effort to financially empower the Black community by consciously altering one’s consumption patterns in favour of Black-owned businesses.

To advance these efforts, lists of Black-owned businesses are springing up across social media platforms and there has been an exponential increase in searches for Black-owned businesses on search engines such as Google and Yelp. Additionally, several initiatives have gained traction, such as Black Pound Day held on 27th June 2020, which seeks to encourage people to buy from Black-owned businesses and will occur next on 1 August 2020. More importantly, one may infer that consumer behaviour has actually changed based on reports made by independent business owners on social media of sales revenue increases during this period despite the impact of COVID-19.

The link between the financial prosperity and social progression of a particular segment of society indicates that advancements in the former aim, which can be achieved through alterations in consumer behaviour, will inevitably benefit the latter. Change is happening but it needs to be sustained. As Khalia Ismain, the founder of Jamii–a marketplace and discount card for Black-owned businesses in the UK– stated in a recent webinar with Cornerstone Partners, buying from Black-owned businesses should not be in protest but rather in practice.

It is true that the difficulty faced by Black entrepreneurs stems in part from their lack of access to capital from institutional lenders and investors. This subsequently limits the number of Black-owned businesses in operation and restricts the flow of capital into the community. The Centre for Research in Ethnic Minority Entrepreneurship at Aston Business School reported on the back of the 2011 census that Black people run only 0.67% of UK businesses despite comprising 3.3% of the population.

In a joint survey conducted by Extended Ventures and Your Startup Your Story (YSYS) on the impact of COVID-19 on BAME-led businesses, 48% of respondents stated that they did not access or expect to qualify for any government support scheme. Evidence from the Department for Communities and Local Government suggests that ethnic minority business owners are more likely to have their loan applications rejected than their white counterparts and it is also said that less than 1% of venture capital funding goes to black founders.

However, the other half of this equation is often forgotten. Yes, more lending and investment will materially improve the growth prospects of Black-owned businesses but there also has to be active community engagement in order to maintain such growth and, in many cases, to access financial aid in the first place. With a spending power of approximately £300 billion, Black consumers collectively hold the key to their future. However, if only 3% of income is reinvested into the Black community by its members, as is presently the case, this dream will never be realised.

For the average consumer, participation in this movement means shopping more consciously and realising the power that lies in each individual purchase. If previous generations could forgo public transportation for an extended period of time amongst countless other sacrifices until they gained concessions, it should be comparatively easy to spend a few more minutes looking into an alternative store from which to purchase coffee.

Additionally, the significance of non-financial contributions to the economic empowerment of the Black community cannot be understated. Respondents to the previously mentioned Extended Ventures and YSYS survey noted that they needed such support in the form of mentorship, coaching and increased community involvement. On an individual level, one can contribute by engaging more with people in their community, providing emotional support, discussing more openly about mental health and wellbeing, and taking a more active role in the formal and informal education of younger generations.

It is time that the level of engagement from the Black community stops emerging in waves, which ebb and flow with headlines, and transforms into a sustained surge from which future generations can draw. Otherwise, another phase of activism will wane, and an even greater number of people will become disillusioned. As boisterous as the Black community’s calls to action are to external allies, much of it falls on deaf ears internally. Heed must be taken of the old saying that those who help themselves receive the most help.

Cornerstone Partners is the first Angel Investor Syndicate (Network) exclusively focused on investing in businesses owned and run by black and diverse founders.