A DESIRE to pursue their passions is driving many black people to set up their own small businesses in the US.
According to a recent survey by Guidant Financial and Lending Club, 28 per cent of African-Americans started their own businesses last year as a platform for the project that they are passionate about. The second most common driver for African-American small business owners was feeling “ready to be my own boss” (27 per cent). Having opportunity present itself (17 per cent) and a dissatisfaction with corporate America (11 per cent) also featured in the most popular responses.
The report, which surveyed more than 2,700 current and aspiring small business owners, found that African-American owners were happier than the average small business owner. On a scale of 1-10, with 10 being the happiest, 56 per cent of them rated their happiness at nine of 10, six per cent higher than average.
Other key findings include that 38 per cent of African-American small business owners are women, compared to 23 per cent on average, and that they had an increased confidence in the state of small business (30 per cent).
“It’s exciting to see African-American business owners increasingly confident about the state of business in today’s current climate,” said David Nilssen, CEO of Guidant Financial. “It takes confidence to open and maintain a small business and having a positive outlook will inevitably lead to increased growth and opportunity.”
Despite the boost in African-American business owners, they face great challenges when it comes to raising capital and maintaining cash flow. While both are obstacles that most small business owners have to navigate, the issues are amplified for many black small business owners as they tend to receive lower loan amounts than their non-minority counterparts.
The Small Business Trends report found most (58 per cent) of African-American small businesses were acquired for less than $50,000, higher than the national average of 45 per cent.