Wealth attainment through entrepreneurship
by Paula Anderson
Dr. Martin Luther King, Jr.’s last speech -I’ve Been to the Mountaintop - focuses on economic development and empowerment. The speech provided a framework for supporting black-owned business and addressing the political systems in place at the time.
One of the themes in the speech was unity instead of division. King referenced the formula Pharaoh used on the slaves in Egypt.
Since 1865, we have not been faced with chattel slavery, however, 'economic slavery' continues to exist in 2020.
The racial wealth gap is disproportionately inequitable when it comes to the wealth of African Americans which represents only 2 percent according to research data.
Brian Marshall, director of entrepreneurship at BCL of Texas said, “While entrepreneurship and small business ownership for minorities including African Americans has made some progress over the past 60 years, there is still much to be done.”
In the article, The State of Black Business and Our Economic Impact, he references King’s speech - I’ve Been to the Mountaintop and said that buying from and supporting black-owned businesses would benefit the black community, but it has not been enough to address the economic disparity that continues to exist among black-owned, latino and white-owned businesses.
African-Americans have been told that the path to financial independence is through entrepreneurship. Starting your own business gives you the freedom to pursue your own dreams, goals and make financial decisions. Obtaining a business license establishes your tax liability, and allows you to collect revenue, but what about the ways to build wealth through entrepreneurship.
“Data from the Small Business Administration (SBA) indicates that just over 19 million businesses, or 70.9 percent of all U.S. businesses, are white-owned. Blacks own about 2.6 million businesses or 9.5 percent of all U.S. businesses, and Latino’s own 3.3 million businesses or 12.2 percent of all American businesses,” according to Marshall’s article.
Marshall said, “Entrepreneurship is a way to wealth, but there are other variables needed to achieve wealth. Money markets, investments, 401k’s, and homeownership are ways to build wealth."
Shawn Rochester, financial consultant and author of The Black Tax Code: The Cost of Being Black in America shares these comments in an interview with Chicago Booth Magazine.
Rochester encourages starting new business enterprises, but he points out whether the demand can meet the supply. Another critical issue discussed is minority business owners does not necessarily mean black business.
Marshall cited a solution to scaling black businesses with 250K in annual sales to receive “support from lenders and community development financial institutions (CDFIs)."
To learn more about CDFIs, http://www.cdfimemphis.org/