The racial wealth gap is a persistent challenge for the Black community: The median Black household has just 32 cents in liquid assets for every dollar held by the median white household.
Entrepreneurship offers Black communities a way to create wealth, build better futures and overcome historical challenges. It can also be a powerful tool for cultural and social impact.
By starting their own businesses, Black entrepreneurs create products and services that reflect their experiences and cater to their communities’ needs, improving representation and diversity in the marketplace. Black-owned businesses are likely to invest in the people, property and institutions close to home—buying, supplying, mentoring, training and hiring from within their communities.
That’s why the empowerment of Black-owned businesses is so important to making lasting, positive change. These companies are engines of community job creation and economic activity, as well as primary vehicles for building generational wealth.
Business ownership provides “a chance for us to build our own legacy and show our grandchildren—and their grandchildren—what success looks like,” said Brian Lamb, Northeast Segment Head for Middle Market Banking and Specialized Industries at JPMorgan Chase.
Here are seven leadership lessons that Black business owners and entrepreneurs can use to grow their companies and cement their legacies.
Owners must be their own biggest advocate. To do that, they must thoroughly understand every aspect of operations and strategy.
Spending too much time playing catch-up will actively work against any continuous improvement or growth. To be at the top of their game, leaders need to stay on top of their businesses.
“Owners must wear many hats. Every aspect of the business, and most importantly, the financial health of the business, should be clearly understood,” said Shaunté Robinson, Midwest Head of Diverse Businesses for JPMorgan Chase Commercial Banking. “Where we find diverse businesses have challenges is when they focus solely on top-line growth without an expense management plan."
A knowledgeable leader is an effective leader. The more you understand your business, the more you can educate and inspire others to believe in the mission.
“Create a culture where employees can achieve a sense of purpose and have a sense of being connected to something beyond their individual contributions,” Robinson said. “That will lead to better outcomes for all stakeholders.”
Such buy-in is fundamental to business success and legacy-building, she said. The best way to secure it is by fostering a culture of excellence, inclusion and ambition. Employees should feel as if it’s their business and journey as well, cultivating them to become lifelong advocates. Tying your personal story—and theirs—to the business can help motivate progress.
Business conditions change fast. Owners who closely monitor markets can help lead their company through whatever economic headwinds lie ahead.
Watching macro developments is important, but knowing what the competition is doing is just as critical. Are they innovating products and services? Are they using new technology? Are they expanding?
Being a student of the markets can help owners identify areas of strategic improvement to keep them competitive and help them contend with shifting economic conditions.
Success as a modern business can depend in large part on data. Mining performance insights is something that even the smallest firm can do. Sharing that data is as necessary as collecting and analyzing it. The more informed your teams are, the more able, agile and actionable they become.
“Technology is moving at a faster pace that we must keep up with,” Robinson said. “Antiquated thinking or processes are not only ways to lose to the competition but can also prevent top talent from joining your organization. Data matters, how you collect it matters, and how you disseminate it is even more valuable.”
The recent rise in interest rates underscores the importance of being strategic when borrowing. Owners shouldn’t take on capital just because it’s attractive to do so, Robinson said. There needs to be a specific reason for it—be it new market expansion, business scaling or real estate.
Owners should also consider options beyond mainstream banks. Minority Depository Institutions (MDIs) and Community Development Financial Institutions (CDFIs) are local resources that lend with a purpose in mind, whether to make a social impact or support diverse-led businesses.
Equity is another avenue to research. The right investor can help bring expertise and insight, along with money. Just be diligent in finding the right fit.
Big businesses are more motivated than ever to work with diverse-owned companies. For instance, the Billion Dollar Roundtable is a collection of Fortune 500 organizations that spend at least $1 billion with diverse-led suppliers annually.
The opportunity is there, so be aggressive in marketing yourself. Dealing with large corporations can lead not only to new business but to other resources and connections as well.
JPMorgan Chase has a global supplier diversity team that’s focused on finding vendors, developing them as businesses and deepening relationships. Engaging with our team—and the supplier diversity teams at other Billion Dollar Roundtable companies—is a great way to start making inroads.
Owners can also find more resources on supplier diversity topics like certification and growth strategies here.
Leaving behind a legacy for future generations requires long-term strategic planning. It’s easy to get caught up in the day to day, but don’t forget to address factors like business continuity, succession planning and exit strategies.
It’s a best practice to have a plan for different milestone time horizons—think five, 10 and 15 years out, or even further. Be sure to periodically update these goals to ensure they align with the mission and overarching objectives.
When Black businesses succeed, so too do the communities in which we live and work. That’s part of why we made a five-year, $30 billion Racial Equity Commitment to promote diverse businesses and improve the lives of underrepresented populations. Two years in, more than 50% of capital has been allocated toward resources and programs, including:
“We’re being intentional with how we support Black-owned businesses and other diverse-led organizations,” said Frederick Royall III, National Head of Diverse Businesses for JPMorgan Chase Commercial Banking. “That means not only improving access to capital, for example, but educating Black and diverse business owners on different types of capital and helping them grow networks and build legacies.”
This commitment is also supported by other efforts, including Advancing Black Pathways, that help Black owners and entrepreneurs learn new skills, grow their businesses and build legacies. Reach out to your banking relationship team to learn more about how we can help you.
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