By Angela Swinson Lee, special to The Washington Informer
Black small business owners are approaching 2024 with optimism, anticipating increases in revenues despite concerns about inflation, as revealed in the recent JPMorgan Chase Business Leaders Outlook survey. While inflation remains a significant worry, the study indicates that Black business owners are more inclined to accelerate in the face of inflation compared to their counterparts.
“As a Black business owner, I share in the optimism that was reported around the year ahead. As a company, we are ambitious, but I believe in attainable sales goals,” said Michelle Taylor, President and CEO of BETAH Associates, a communications management consulting firm that provides event management, peer review and other professional support services.
“Inflation is certainly a challenge that all business owners are facing in the current economy. As a service-based business in the government contracting space, our main direct expense is labor. So as inflation impacts nearly every aspect of their lives, our associates are really looking to BETAH to meet and or exceed their rising costs of living, which also then ties back in with revenue growth.”
Taylor also pointed out that a prevalent challenge for black business owners is access to financial capital. “There is a large disparity,” she said, adding that as a founding member of Bow Collective, a national organization that consists of more than 200 black women, she sees that funding has been a challenge, even for those owners with revenues of more than a million dollars. “They continue to experience paying higher interest rates on loans they’ve been denied credit. And truthfully, some have even avoided applying for loans because they just think it’s futile, or that they’ll be denied, or they’ll have to navigate unreasonable terms.”
According to the survey, 88 percent of small business owners will consider financing in 2024.
David Berry, Chase DC Business Banking Relationship Manager, said access to capital is often one aspect of being able to grow and scale a business.
“I think having the right financial partner in place is the biggest gap. I would say a bank and a banker is just as important to a business as a CPA, as well as a business attorney, as well as an insurance agent or broker,” Berry said, explaining how he advises client who need more capital. “These are all very vital partners that will help the business move forward. I think one, identifying and having a partner that understands the business and understands the way that they can support the business is important. I would say two is always be prepared.”
Berry said that preparation is having the financial documents prepared and being able to understand what type of capital is needed for the business.
“I would say sometimes access to capital isn’t necessarily the most important piece. It could be diversifying their business and their streams of income, but also taking out or having access to capital is debt. Let’s be strategic and understand the impact that debt can have on the business, and are you prepared for the long-term impact of that, not just the short term,” Berry said.
He also said he advises business owners to be engaged with potential impacts from a regulatory perspective for their business by being connected and having trusted advisors in place.
‘We have a lot of resources when it comes to information, and so there is information that we try to provide to our clients, such as industry analysis, outlook surveys, things of that nature, to just be as proactive in the discussions around the impacts from a regulatory perspective and the impact that may have on the business and then also being able to help them pivot through that process,” Berry said.