A supportive ecosystem for entrepreneurs can lead to local prosperity and upward mobility, but in the Memphis area, Black entrepreneurs face many challenges to starting and growing a business, according toa new report from the think tank, Heartland Forward.
Local government officials and business leaders joined Heartland Forward researchers on Wednesday to present the organization’s recommendations at the National Civil Rights Museum. They called for new avenues of assistance for Black owned businesses to help them thrive.
“If more Black [owned] companies are started and scale up, it will increase wealth and income throughout the community and promote economic growth more broadly all throughout Memphis” says Ross DeVol, the head of the Heartland Forward, which studies economic renewal in 20 states in the middle of the country.
DeVol says that Black entrepreneurs historically have faced many barriers in the marketplace including limited access to start-up capital, either through banking or personal savings, and mentorship. He says about 80 percent of Black entrepreneurs engage in what’s called “necessity entrepreneurship.”
“Meaning they have a job that may not provide the income level that they need to support themselves and their families and so initially, they get into entrepreneurship as kind of a side hustle, a side business,” DeVol says. “The challenge is that not enough of them are able to scale those businesses up.”
Understanding these constraints, he says, will help private and public leaders strategize better ways to provide resources to scale and grow minority-owned businesses.
The study also recommends finding ways for Black entrepreneurs to build relations with the wider business community to increase mentorship and exposure to innovation. It also suggests that offerings of technical assistance to businesses be tailored to industry and individual needs.
Another hurdle is the digital divide, says Andre Fowlkes, who runs a company that invests in startups. He says more Black business owners need access to high-speed Internet at home and training related to using the technology.
“How successful can our programs be if they don’t have the ability to get online and do the diligence needed to grow the business?” he asks, noting that during the COVID-19 pandemic many had difficulty transitioning operations online.
Memphis Mayor Jim Strickland proposed a plan last month intended to expand access to high speed broadband internet across the city.
