The Vital Role of Black Entrepreneurship in US History
Black-owned businesses have a long and rich history in the United States. But today, minority-owned businesses have a harder time getting access to capital and, therefore, have higher rates of failure compared to white-owned businesses. The plight of minority businesses in the US is finally being recognized and addressed. In 2024, the federal government put $30B into a Small Business Opportunity Fund for minority-owned businesses. In the wake of social protests in 2020, companies like Citi and JPMorgan Chase pledged millions of dollars in funding to uplift Black and Hispanic-owned businesses. These actions are the first steps on a long road to equitable opportunity for all businesses.
Adequate recognition and funding for Black-owned businesses is a relatively new development, but the existence of Black-owned businesses is not. Even before emancipation, free and enslaved Black people were starting businesses and finding innovative ways to gain autonomy in their lives.
Between 1900 and 1930, there was a golden age of Black-owned businesses in the US. Because Jim Crow laws forced African Americans to form more insulated communities separate from whites, it led to a boom in entrepreneurship. All across the country, small businesses were popping up at record speed.
The need for the establishment of Black businesses increased with segregation because many white businesses refused to serve Black customers. Black-owned businesses have been pivotal in offering a wide array of services and ensuring safe customer experiences, primarily located within Black neighborhoods. These enterprises are integral to the vibrancy and heart of their communities. Most of these businesses were local, small-scale, and family-run. Many Black entrepreneurs followed the tenets of Booker T. Washington, who had established the National Business League in 1900 to promote economic self-help. Washington advocated economic development as the best path to racial advancement and the means to eventually challenge the racial prejudice of Jim Crow.
Throughout the 20th century, a distinct pattern in such companies’ management philosophies and actions emerged: a love of community that loomed large and permeated their businesses. Black business pioneers built their businesses in ways that supported and strengthened the people around them: employees, customers, and local communities. These efforts were beneficial to the companies’ success. Care is often reciprocated, and many successful Black businesses were robustly sustained by the African American community, which was happy to patronize organizations that cared for their members’ well-being. That these efforts were needed at all was a reflection of the failure of the US government as well as white-led corporations in the wake of slavery and reconstruction.
Prominent historical figures such as Rosa Parks, Medgar Evers, and Martin Luther King, Jr. loomed large during the Civil Rights Era. On the ground were the taxi dispatchers, pharmacists, grocers, and other small business owners who were instrumental in making civil rights a reality. Rosa Parks’s arrest in December of 1955 prompted a bus boycott in Montgomery, Alabama. In Mississippi, Black business owners were also on the front lines, enduring pressure from the white community. Gas station owner George Washington refused to stop supporting the civil rights movement, leading a local oil supplier to remove the pumps at his station and distributors to refuse to deliver groceries to his store. As in other states, Mississippi’s Black community developed effective measures to counter such economic pressure thanks to the power of black-owned enterprises.
The rate of black business creation continued to rise and fall throughout the late 20th and early 21st centuries, increasing in the ’90s, dipping during the 2008 recession, and rising again post-recession. In recent years, Black-owned businesses have risen dramatically, with Black women fueling much of that growth. In 2003, Oprah Winfrey, arguably the most notable Black female entrepreneur, became the first Black American billionaire.
The legacy left by the history of Black entrepreneurship is one of resilience and creativity – so much so that Black women were among the fastest-growing entrepreneurs in the last few years. If history is any indication, Black entrepreneurship will continue to grow and thrive in the coming years. As we celebrate Black History Month—and throughout the year—we realize we have far to go as we work toward an economy that is equitable for all Americans.