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Black businesses are an essential part of the economy. As one of the fastest-growing segments of the U.S. economy, Black businesses contribute an estimated $200 billion to the national economy annually. Research shows that entire communities benefit when Black businesses succeed. They create jobs, close the racial wealth gap, and strengthen local economies.
In celebration of Black Business Month this August, we recently caught up with Chase Business Banking Area Manager Jacob Derritt, to discuss how Chase helps Black business owners achieve growth, while sharing tips for starting a healthy business.
Black business growth is exploding right now. What are some key traits for becoming a successful business owner?
Jacob: I have worked with hundreds of small business owners in my many years in financial services, and all of the successful ones demonstrate incredible resilience. While it’s true that entrepreneurs must be innovative and self-motivated, it’s that resilience – which 81% of small business owners say is the most important attribute behind their success– that empowers them to push through the challenging times to build a business.
We know that Black business owners face an unequal path to recovery from the pandemic when compared to their white counterparts. But, while new business formation is exploding across the board, we’re seeing a huge boom as the number of Black-owned businesses is around 30% above pre-pandemic levels.
What advice do you have for Black business owners who are looking to grow their business?
Jacob: Prioritize finding a financial mentor. A great mentor can be the difference between barely keeping your business afloat and really thriving. In fact, studies show 70% of small business owners who received mentoring survived more than five years in business, which is double the survival rate of non-mentored businesses.
While starting a business can be overwhelming, a mentor can help you navigate the complexities that come with being a Black business owner, such as providing access to the right networks, education, financing, tools and resources. This includes access to capital and support with cash flow management. Mentors can also help with social capital by connecting you with their network of contacts to help facilitate strategic growth.
In addition to your business mentor, you can also lean on the resources available within your local business community like the National Black Chamber of Commerce or the local SBA Small Business Development Center.
What other tips do you have for business owners just starting out?
Jacob: If you are ready to dive into small business ownership, having a plan, understanding your credit health, and building a strong foundation can set you up for success. Business owners should also focus on:
- Putting a plan on paper. Every business owner should make it a point to reevaluate their business plan to ensure they are meeting the evolving needs of customers. This document plays a critical role as you map out your growth.
- Building and protecting credit. As businesses grow, the financial health of the business is what will allow you as an owner to access capital and funding. Build credit in the business’ name, set up a small business credit card account, pay vendors and suppliers on time, and be mindful of cashflow and liquidity.
- Separating personal and business accounts. While many business owners start companies with their own money, it’s important to keep personal and business finances separate. Starting a small business checking account or opening a business credit card can help you keep track of your spending and simplify accounting when it’s time for taxes.
What resources and programs does Chase have available to support Black business owners? And, can you share the impact of these efforts?
Jacob: We have several helpful tools available to assist Black and minority business owners, including through our Advancing Black Pathways initiative, which aims to help the Black community chart stronger paths toward economic success, and our Entrepreneurs of Color Fund, which provides necessary capital to fuel more than 300 U.S. Black and Latino-owned businesses. We provide business owners with access to the Chase for Business Resource Center and the JPMorgan Chase Supplier Diversity Network (SDN) to help ensure the financial health of their businesses.
We’ve also worked with more than 1,300 diverse small business owners in 19 cities, including GoLogic Solutions in Chicago, who we helped diversify revenue streams and pivot during the pandemic. Over the past few years, our mentors have supported Black businesses who have seen the revenue increase from $100,000 to $3 million in as little as 18 months. These business owners attribute much of their success to their senior business consultants providing guidance and expertise.
Visit chase.com/businessconsultant to learn more about all the ways Chase is supporting Black entrepreneurs
