Creating Black Wealth through Black Entrepreneurship
Many Canadians from all walks of life have heard of the social activist Viola Desmond. Chances are that you hold her beautiful portrait in your hands on a weekly basis because it graces the vibrant purple Canadian ten dollar bill. Many of us may know the story of how Desmond, who was stranded in New Glasgow, Nova Scotia when her car broke down, went to a local theatre and was man-handled straight into a jail cell. We also know a bit about Desmond’s brave fight against the unjust provincial court ruling which upheld racial segregation in Nova Scotia. But most likely you do not know that she was also a groundbreaking entrepreneur. Indeed, the reason why Desmond was stranded in New Glasgow to begin with is that she was on her way to a business meeting in Sydney, Nova Scotia. You see, Desmond who had opened Vi’s Studio of Beauty Culture in Halifax, had gone on to open Desmond’s School of Beauty Culture and launch her own line of beauty products, sold at venues owned by graduates of her school. Desmond was simply extraordinary and there is much to appreciate and learn from her early example of Canadian entrepreneurship.
According to a Statistics Canada paper, as of February 2022, Canada had 66,880 black business owners. These numbers were based upon a tally of owners of private incorporated businesses and unincorporated ones, often referred to as folks who are self-employed. Where do we sit as entrepreneurs in the context of our fellow Canadians? Well, that 66,880 means that we account for only 2.1% of all business owners across the country. So, who are the black folks who are hustling to create their products, build brands, and capture clientele? They are 70.6% male and only 29.6% female and they tend to be single, low income immigrants.
While the growth of black entrepreneurship in Canada between 2005 and 2018 in both female and male populations is something to celebrate, the stats that I just noted tells us that many, if not most of these brave entrepreneurs, are struggling with small businesses which may not even be breaking even.
Why is this a concern? Unlike white and other populations, black people in Canada (and elsewhere) do not have the luxury of believing that their hard work, discipline, and education will result in their access to the “Canadian dream” (or the American, Australian, French, or British ones for that matter). The persistence of institutional racism in Canadian society and across the spectrum of education and employment means that “being the best” as a black employee at your corporate, banking, academic, cultural, educational or government job will likely not get you the recognition, promotions, or salary increases that you deserve. Within this biased context, entrepreneurship is one way to ensure that your commitment, energy, innovation, and hard work are actually rewarded.
But taking those first steps to imagine, start, build, and manage a successful business can be daunting. Why? This is because unlike many white Canadians, black Canadians are typically lacking the family support, business connections, and start-up capital to take the first steps. After all, there are rental, equipment, infrastructure, employee, service, shipping, and product costs to consider. Even a good internet business requires the initial capital to create an aesthetically pleasing and professional website which can attract and retain interested clients and serve as a portal to sales and other opportunities.
Although we share a parallel colonial history with our American cousins to the south, black entrepreneurship in the USA has produced stunning success stories across multiple domains and pursuits. Daymond John, Tyler Perry, Shonda, Rhimes, and Berry Gordy Jr. come to mind, alongside the millionaires and billionaires with the one word names like Oprah, Rihanna, and Diddy. But before we assume that such success has emerged from a greater access, let’s look at the numbers. In 2020, black people made up 14.2% of the American population but only “2.4% of all employer-firm owners” (compared to 18.7% and 6.5% for Latinos/Hispanics and 6.0% and 10.6% for Asians). Clearly then, there are some additional histories and obstacles with which we must grapple.
Point one, Transatlantic Slavery did not merely institutionalize the physical, sexual, and psychic abuse of black populations, it also legalized our economic exploitation. For four hundred years (1400s to 1800s), our enslaved black ancestors were not merely forced to work for nothing, but reduced to chattel, they were prohibited from trying to accumulate wealth – as material possessions or money – outside of their enslaver’s direct authorization. It is this centuries-long deficit that prohibited black individuals and families from creating what is often referred to as transgenerational wealth or what some, like Dr. LaTanya White now refer to as dynastic wealth. I’m talking about the type of wealth that allows a person to know that their great-great-grandchildren will never have to worry about how they will find their next meal, buy a home, fix their car, or pay for university tuition. The racial wealth gap is real. In 2019, the median white American household held $188,200 wealth which was 7.8 times that of the typical black American household’s $24,100. While Europeans and Euro-Americans were accumulating their wealth quite literally on the backs of our enslaved ancestors, our ancestors typically became the most impoverished people in their given societies.
As we emerged from slavery, self-employment was one of the surest ways to survive in a Canada in which whites did not want to share any resources – neighbourhood, schools, cemeteries, fire departments – with their fellow black citizens. For instance, as the groundbreaking research of Colin McFarquhar has revealed, many black women and men opened their own salons and catered to the self-care and hair care needs of black and white clientele. Meanwhile, even earlier, the ingenious Rose Fortune earned a living as a trucker in Annapolis Royal, carrying the baggage in her wheelbarrow of passengers on the Saint John-Digby-Annapolis ferry in Nova Scotia. Indeed, our ancestors made a way when there was no way! But opportunities to expand and grow a business as a black entrepreneur in the nineteenth and twentieth centuries were extremely difficult to access given the entrenched double bind of racism in banking and real estate.
However, if we are honest, some of the barriers to success have been hewn by our own hands. Unlike white people and other racial groups, black people have proven to be extremely inept and undisciplined at circulating money within our own community. According to research on generational wealth by the University of Georgia’s Selig Center for Economic Growth, money circulates only one time within the black American community compared to six times within the Latino community, nine within the Asian community, and an unlimited number of times within white communities. The Black Star Project study determined that one dollar circulates only six hours within the black community compared to twenty days in the Jewish community and thirty days in the Asian community. What this looks like is the following: black man gets paid and picks up dinner at a white-owned diner, drops his laundry off at the Asian-owned dry cleaner, and fills his tank up with gas at the Arab-owned gas station. So, the problem is not just inspiring black people to start their own businesses, and ensuring that they have the knowledge, credit, and infrastructure support to do so, but educating black consumers about the importance of supporting and sustaining those businesses once they are launched.
So, what do we know about the mind-set and behaviours of the people who have been able to create great wealth. Quite a bit actually.
- They tend to own one or a few excellent businesses. They do not over diversify.
- They choose industries with the potential for long term growth.
- They do the work to truly understand the businesses that they own and the clients they are seeking to cultivate.
- They develop a sound plan for long term ownership.
- They plan (tax, estate, psychology) to pass their businesses on to their heirs and therefore do not deplete their assets in their lifetime.
- They have a business plan with specific and defined goals which they can clearly articulate.
- They are expert networkers and collaborators who know how to utilize other people’s skills, expertise, and knowledge.
- They know how to obtain and utilize other people’s money (credit).
The trick is that these behaviours are not a trick. They must be practiced until they become habits, then patterns, then philosophies, then a way of life. The good news is that we do not have to create a formula from scratch. We just have to study what works and apply the knowledge. Soaking up the information from the many excellent podcasts and online platforms listed for you in the Entrepreneur Tools category of Black Maple Magazine’s Resources is a good place to start. Progress and transformation do not have to be a long road. We can decide, right now, today, to seize the promises denied to our ancestors and follow the path laid out for us by shining examples, like Desmond.