Black Business Month was started 14 years ago to draw attention to the importance of these businesses to the Black community and to our nation’s economy. This effort is celebrated every August and it’s worth reminding us all why this is important. It also serves to highlight initiatives that assist in creating opportunities for Black-owned businesses.
Black Businesses Matter
Historically, Black-owned companies were created to counteract racial discrimination. The segregation patterns that existed at the time created a market vacuum for Black entrepreneurs to fill in order to meet the demands of the Black community. While the history of Black business growth has risen and fallen with the times, what has remained consistent is the desire for entrepreneurship in this space.
Black business owners account for about 10% of American businesses and about 30% of all minority-owned businesses. They provide a significant contribution to the overall health of our state’s economy. I recently introduced a series of proposals to highlight and augment these efforts.
My efforts include:
Disparity Study. Senate Bill 2768 would initiate a statewide study by the NJ Chief Diversity Officer, which would examine the disparity between the availability of Minority and Women-Owned Business Enterprises (M/WBE) and their procurement levels providing for a goal-based affirmative procurement program. Better research methods and availability of business data have greatly improved the quality and utility of disparity studies in recent years. This helps New Jersey tie historical discrimination to any M/WBE program. It also allows for the recognition of aspirational or laudatory goals of M/WBE procurement achievements.
Minority Business Development Program. Senate Bill 2769 would establish a program within the NJ Economic Development Authority (EDA) would provide $50 million for grants to NJ MBE/WBE certified minority-owned businesses and Community Development Financial Institutions. Grant recipients would issue a report to the New Jersey EDA every six months detailing how they used grant funds and any other information the EDA requires.
Lower Administrative Barriers. Senate Bill 2770 would require the NJ EDA, in partnership with the NJ Chief Diversity Officer, to proactively lower any administrative barriers to Minority Depository Institutions (MDI) participation across all EDA loan programs. Given the possibility of administrative barriers that have historically limited MDI participation in EDA lending programs, we would provide several affirmative steps. These include goals for diverse entrepreneur participation in COVID-19 related EDA programs, targeted efforts to ensure that MDIs are delivery channels for diverse entrepreneurs, and adequately compensating lenders for program participation by establishing a reasonable rate floor.
Creation of a Rural Economic Development Program. Senate Bill 2771 would provide $35 million in grants to businesses for the retention or creation of employment opportunities in rural areas based on census tract data. The focus would be on entrepreneurs who are building a sustainable farm and food system that will boost the economy and overall health of rural and small-town communities.
Creation of Urban Wealth Funds. This would operate as a publicly owned private equity fund based on existing investments by the state, county or local government. This equity fund would provide startup capital to minority-owned businesses, improvements to infrastructure, investments in education, and a requirement to reduce the municipal property tax levy, county purpose tax or school property tax by the amount generated by the fund.
Develop a Biannual Business Matchmaker Initiation. Senate Bill 2772 would require the NJ EDA to develop a Biannual Business Matchmaker Initiative allowing small-business owners to meet with government agencies and significant state contractors looking for subcontracts. It would open the door to learning about the availability of government contract possibilities. We would coordinate this initiative with the National Association of Women Business Owners-NJ, the African American, Hispanic, Veterans and State Chambers of Commerce. The EDA, in partnership with the NJ State Chief Diversity Officer, would be required to submit a yearly report outlining the rate of contracts awarded to participating companies with state agencies.
Given the historical shackles that have constrained Black businesses in America, I like reminding people that a vibrant, healthy Black business economy does not end there. When Black businesses prosper, all businesses, regardless of ethnicity, thrive, adding to our collective economic health and future. Let me put it another way. Building up Black businesses builds up all American businesses.
That’s my take, what’s yours?