Black and ethnic minority entrepreneurs face more obstacles setting up and running their businesses than their White counterparts, despite having a more robust entrepreneurial spirit, according to a new study.
The study, carried out by Channel 4, Clear Channel and BACKLIGHT, found that:
- 46% of Black and Multi-ethnic entrepreneurs felt they could always run a successful business compared to 29% of White entrepreneurs.
- 71% of Black and Multi-ethnic entrepreneurs expressed they always wanted to be their own boss compared to only 54% of white respondents.
- 62% of Black and Multi-Ethnic entrepreneurs started their businesses under 30.
- One in eight Black and Multi-Ethnic entrepreneurs started their business as teenagers, twice the level of White business owners.
However, despite having a more entrepreneurial spirit, the study showed that Black and ethnic minority business owners face more challenges generating funding and feel they have to fight hard to convince investors to believe in their businesses compared to white business owners.
LACK OF FUNDING
The findings, which featured responses from more than 500 entrepreneurs, revealed that 56% of Black-owned businesses only receive funding once they had already grown a successful business, compared to just 35% of White business owners who were given the same requirement. In addition, 53% of Black-owned businesses agreed they had to fight hard to get others to believe in their business, compared to only 40% of white owners.
The research also showed a huge gulf between how much funding people believe Black businesses receive compared to how much investment actually goes into Black-owned companies. White respondents guessed that 21% of total funding goes towards Black-led businesses, while Black participants estimated 15%. But the reality is that Black businesses attract just 0.24% of total venture capital investment, the report highlighted.
The results also revealed that more Black business owners (64%) cite advertising as being very important to grow their companies compared to white owners (40%). Consequently, 47% of Black and Multi-ethnic entrepreneurs said they would find an initiative that helps with advertising appealing compared to 29% of white entrepreneurs. Channel 4 teamed up with out-of-home media company Clear Channel UK and the creator of the Black Pound Report, BACKLIGHT, to better understand and mitigate issues faced by Black business owners, with independent research company, The Good Side, and Channel 4’s commercial arm, 4Sales.
MORE TARGETED SUPPORT NEEDED
“Inspired by continuing the legacy of Channel 4’s award-winning Black To Front Project, which commits us to improve Black representation on and off screen and the findings from BACKLIGHT’s Black Pound Report, we wanted to commission a study to identify how Channel 4 can help create real, tangible change for Black Owned Businesses across the UK,” shared Amy Jenkins, Customer & Commercial leader at Channel 4.
“The research has been enlightening, having identified a clear gap in opportunity and perception. We hope these findings inspire business owners and empowers UK industry to offer better, more targeted support to help Black and Multi-Ethnic entrepreneurs and in turn, help grow the British economy.”
Clear Channel’s Compass scheme also aims to empower Black-owned businesses by offering free outdoor advertising space. The purpose of Channel 4’s Black To Front project is two-fold: firstly, to challenge the business to see its content differently, and secondly, to leave a lasting legacy in terms of increased Black representation both on- and off-screen.
LEVELLING THE PLAYING FIELD
“Since 2015, my personal mission has been to remove the barriers to entry for Black-owned businesses, by unlocking access to mainstream advertising platforms, with mainstream publishers like Channel 4,” stated Maria St Louis, Channel 4’s Equity & Inclusion Lead, who helped spearhead the initiative with 4Sales. “The vision is to level the playing field, achieve Economic Inclusion for Black Owned Businesses and to prove that with the right levels of support, they can successfully and sustainably contribute to the growth of the UK’s economy. Having worked at Channel 4 for nearly 20 years, I’m proud that this initiative is fully backed by the business and will evolve in new and empowering ways.”
Caroline Forbes, Head of Sales – Out of Home Agencies at Clear Channel UK, added: “This comprehensive research study has been invaluable in helping us to better understand the challenges that Black entrepreneurs face and how we can further support them as a media owner. With advertising being identified as one of the vital parts of business success, we will continue to create more visibility for Black-owned businesses on UK’s high streets through our Clear Channel Compass initiative in line with our ongoing commitment to be both a Platform for Brands and a Platform for Good.”
WANTED EQUAL OPPORTUNITIES FOR BLACK ENTREPRENEURS
“As in all businesses, challenges are there. However, the journey of Black entrepreneurs is unique to our White counterparts; our issues are more enduring, and access to business opportunities can be difficult. Yet we are immensely ambitious, resourceful, resilient, innovative, and creative, already helping our economy thrive,” shared Lydia Amoah, CEO of cultural change agency BACKLIGHT and Founder of The Black Pound Report. “Our research demonstrates that we can contribute billions to the UK economy and beyond when given equal opportunities and openings.”
“By championing often overlooked audiences and bringing visionary insights to the fore, we can deliver meaningful impact not only for Black and Multi-Ethnic businesses and consumers but across society as a whole,” added The Good Side’s Business Director Liz Cheesbrough. “The Good Side was established to help organisations show up and respond to changes in culture, and this important project exemplifies the change we want to help bring to the world.”
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