Research Brief Proposes Priorities for Program and Policy Changes by 2030

 The COVID-19 pandemic and the murder of George Floyd in 2020 spurred numerous efforts to support Black-owned businesses. Now, as commitments to racial equity and diversity and inclusion face challenges, critical changes are needed to the ways programs, corporations, and government support Chicago’s Black-owned small businesses, according to a new report from the Chicago Urban League’s Research & Policy Center (RPC).

The report, a policy brief titled Three for 30: A Black Small Business Agenda for Programs and Policy Change by 2030, highlights factors that made Black-owned businesses more susceptible to negative effects of the pandemic. The report draws on findings from a 2021 qualitative research study that included Black business owners, small business experts and consultants, and participants in a series of community forums in Chicago. RPC and the League’s Center for Entrepreneurship & Innovation collaborated to conduct the study.

A key finding of the study was that Black business owners doubted that strategic recovery and assistance would be available post-pandemic to stabilize Black businesses and communities. The current climate around DEI suggests their concerns were right.

“Four years ago, there was a real recognition of the ways systemic racism has disadvantaged Black communities, including Black-owned businesses. We saw corporations, foundations, and government commit dollars to address historic disparities,” said Karen Freeman-Wilson, President and CEO of the Chicago Urban League. “There is now a real question as to whether those commitments will endure. So, we felt this was an appropriate time to share some of the lessons we’ve learned about what Black small business owners will need for an ongoing recovery and to be positioned to survive future crises.”

Other findings from the study included the following lessons learned:

• Black business owners were unprepared for a crisis, lacking many of the formal processes, key relationships, financial reserves, and personnel support needed to sustain a business.
• Black business owners existed in a network of connections that struggled to uplift one another because they were all struggling in similar ways.
• Black entrepreneurs owned businesses that are predisposed to closure, mainly in the services, retail and food industries, which have lower barriers to entry.
• The pitfalls of the Black hustle culture became evident during the pandemic as more Black entrepreneurs were fighting over the same, fewer scraps in poorer communities that lack a local economy to support job and business development.
• Solopreneurs were at increased risk of business closure due to lack of honest business advice about the probabilities of success.

The Three for 30 policy brief outlines three priorities the Chicago Urban League is committed to pursuing to build the infrastructure to better support Black entrepreneurs and business owners over the next 5 to 10 years. Those priorities are:

• Reimagine entrepreneurship programs
• Re-envision the small business grant and finance infrastructure
• Reinvent how businesses and government agencies commit to DEI

The League has already committed its resources to this work through its nextONE business accelerator program and other entrepreneurship programming.

“Over the past two years, we have worked to elevate our programming to address critical issues and needs identified by our clients,” said Kelly Evans, the League’s Vice President of Entrepreneurship & Economic Development. “For instance, we have added stipends for businesses in many of our program offerings and worked with funders to expand access to capital. We have also prioritized a DEI focus with our corporate partners to engage more businesses in supply chain access.”

Freeman-Wilson added that, by sharing the study’s findings and recommendations, the Chicago Urban League hopes others will embrace the three priorities to help build a truly supportive small business ecosystem for Chicago’s Black entrepreneurs and business owners. Concurrent with the changes to its own programming, the League has been collaborating with other Chicago-based business-serving organizations that are prioritizing building a strong ecosystem for all businesses.

“While there are still a number of efforts underway to support Black-owned businesses in Chicago, we believe a much more radical approach is needed,” Freeman-Wilson said. “We are looking to partner with corporations, foundations, and policymakers who are interested in embracing our recommendations and approach.”

Read the full report here.