Black History Month Small Business Guide

Black business owners have been essential to America’s growth, driving economic progress and fostering community development. Their contributions are deeply woven into the fabric of the economy, creating jobs, opportunities, and innovation. 

National Black History Month, observed from February 1 through February 28, is a time to celebrate African American achievements and recognize their central role in U.S. history. It’s also an opportunity to honor and support Black-owned businesses, which are vital to the American economy.

Below, we explore the rich history of Black entrepreneurship and tips on honoring their legacy and growing your business.

A brief history of Black History Month

This annual celebration has been observed since 1976. Here are five key facts about its origins and significance:

It started as a week

In 1926, Carter G. Woodson and Jesse Moorland founded Negro History Week to encourage the study of African American history. It inspired schools and communities to organize performances and lectures.

Carter G. Woodson: The Father of Black History

Woodson, a Harvard-educated historian, emphasized the importance of empowering communities through education, an idea that continues to resonate with entrepreneurs today.

February is symbolic

The week aligned with the birthdays of Abraham Lincoln and Frederick Douglass, two figures central to the abolition of slavery.

From a week to a month

In 1976 President Gerald Ford expanded Negro History Week to Black History Month.

Black business ownership growth

Black entrepreneurship traces its roots to the 16th century when enslaved Africans were forcibly brought to North America. Following emancipation, African Americans began operating businesses within the U.S. legal framework, particularly during the Reconstruction Era (1863–1877) and beyond.

By the 1890s, thousands of Black-owned businesses emerged in urban centers across the country. The early 20th century saw a surge in entrepreneurial growth as segregation laws under Jim Crow created tight-knit Black communities large enough to support vibrant business ecosystems. During this time, Booker T. Washington, an educator and leader, helped start the National Negro Business League. This organization grew to over 600 chapters, supporting Black business owners in cities with significant African American populations and promoting economic empowerment.

Despite segregation, discrimination, and limited access to capital, Black entrepreneurs built thriving business districts in the early to mid-20th century. One example is the Greenwood District in Tulsa, Oklahoma, also known as "Black Wall Street." By the 1920s, it was one of the most prosperous Black communities in the US, with hundreds of Black-owned businesses, including banks, grocery stores, hotels, and medical practices.

But Black entrepreneurs hit setbacks. The 1921 Tulsa Race Massacre destroyed much of Black Wall Street, and similar racial violence occurred in other areas. And discriminatory policies like redlining, exclusion from government programs and limited banking access made it hard to rebuild and expand Black businesses.

But Black entrepreneurs persisted. The Civil Rights Movement of the 1960s brought increased visibility to economic justice, paving the way for legislative advancements like the Equal Credit Opportunity Act (ECOA). Passed on October 28, 1974, the ECOA made it illegal for banks to discriminate in lending based on sex or marital status. However, the law did not immediately eliminate discriminatory practices. Recognizing these shortcomings, Congress amended the law in 1976 to include additional protections against discrimination based on race, color, religion, national origin, age, or receipt of public assistance.

These pivotal moments laid the groundwork for today’s Black entrepreneurs, who continue to make strides despite ongoing obstacles.

Fast facts about Black-owned businesses (2024)

• There were 194,585 Black or African American-owned businesses generating $211.8 billion in annual revenue, employing 1.6 million people and about $61.2 billion in annual payroll.
• Health care and social assistance accounted for 25.6% or 49,872 of Black-owned businesses.
• Black women represent about 49% of Black business owners, maintaining their position as the fastest-growing demographic of entrepreneurs.
• Around 22% of Black entrepreneurs are Millennials, compared to just 12% of their white counterparts.
• The top reasons for starting a business are to be their own boss (38%) and to pursue their passion (25%)

Minority Business Enterprise Certification

Minority Business Enterprise (MBE) certification opens powerful doors for entrepreneurial growth. For Andrew Magnus, certification was a strategic pathway to expand his business opportunities in a competitive industry. 

“I only knew one minority business owner,” said Magnus. “He asked me why I was working for someone else and told me that I could make my own paycheck. That always stuck in my mind. A big part of my push was to create a greater minority presence in a multi-billion dollar industry.” 

To qualify for this type of certification, you must meet these qualifications:

• The business owners must be U.S. citizens
• Ownership verification demonstrating at least 51% ownership by minority group members
• The business must be for-profit and physically located in the U. S. or its territories
• Proof of day-to-day business management and control by minority owners
• Compliance with local and federal certification requirements

Certification isn't just a label—it's a strategic tool that connects minority-owned businesses with targeted procurement opportunities, corporate diversity programs, and government contracts designed to foster inclusive economic growth.

Becoming an official MBE ​​allows your business to participate and take advantage of the networking and educational programs provided by the NMSDC. Contact your regional office about business opportunity fairs, leadership training, and networking opportunities.

Additionally, the Small Business Administration (SBA) offers dedicated support for minority-owned businesses, providing resources and guidance for entrepreneurial growth. 

What makes a business owner successful?

Even if your products are selling quickly and your services are in high demand, running a successful business requires more than great sales. This means keeping an eye on critical areas like finances, operations, and growth opportunities.

Funding options for your small business

Start-up financing to launch a business and funding for working capital and debt refinance is a challenge to every entrepreneur. The #1 reason small businesses fail is related to cash flow problems. Securing the right financing at the right time may stabilize cash flow, reduce stress, and set your business up for long-term success.

Minority business loans can come from various sources, including the U.S. Small Business Administration, online lenders or banks, and non-profit organizations. According to the Minority Business Development Agency, minority business owners may face unique barriers, such as lower credit scores or fewer assets to secure loans. However, there are various funding options that may be available:

• U.S. Small Business Administration (SBA) Loans: SBA loans offer low rates and long repayment terms, making them a strong option for small business owners. Because the SBA partially guarantees these loans, they are generally more accessible for business owners who might not qualify for traditional bank loans.
• Bank loans: Traditional term loans from banks are a common funding source for entrepreneurs. These loans often have fixed interest rates and predictable repayment schedules.
• Non-profit organizations: Some non-profits specialize in offering loans or grants to minority-owned businesses or entrepreneurs from underserved communities.

Early-stage funding options

If you’re just starting out, here are additional funding options to consider:

• Friends and family: Borrowing from loved ones may be an accessible first step, but it’s important to treat these arrangements as formal business agreements to avoid misunderstandings.
• Business grants: Grants provide funding you don’t have to repay, making them a valuable resource for startups and growing businesses. Although competitive, there are grants tailored specifically for minority entrepreneurs or small businesses.
• Crowdfunding: Crowdfunding platforms, such as Kickstarter® or Indiegogo®, allow you to raise money by pitching your business idea to a broad audience. This method may also help build brand awareness and loyalty as backers often become customers.
• Business credit cards: A business credit card can serve as a revolving line of credit for smaller expenses. If managed responsibly, it may also help build your business credit score.

Taxes

Tax laws are nondiscriminatory, so small business owners do not get special incentives just because they are minorities. Owners can take advantage of numerous tax breaks for starting and running a business. Be sure to check with a tax professional for specifics and legal requirements.

Before you pay taxes, look into the structure of your small business and how that will affect your tax obligations. Small business taxes can be confusing, from withholdings to quarterly estimated taxes to deductions. If this isn’t your area of expertise, working with a bookkeeper or accountant familiar with small businesses may relieve stress and help you avoid penalties.

Revenue

Want to know one of the most important ways to understand your business's health? It starts with tracking your revenue.

Revenue is like your business’s heartbeat—the money you bring in from selling products or providing services. Monitoring this number isn’t just about counting dollars; it’s about gaining valuable insights that help you make smarter decisions and plan for growth.

Tracking revenue goes beyond knowing how much you’re earning. It helps you uncover opportunities, identify trends, and make strategic moves to strengthen your business. Every sale tells a story, and understanding that story is how successful entrepreneurs transform good businesses into great ones.

Marketing

A well-thought-out marketing and social media strategy ensures your target audience knows about your products and services. Creating a comprehensive marketing plan should be a top priority if you don't already have one in place. A good plan is a roadmap, helping you allocate resources effectively and determine the funding needed to execute successful campaigns.

There are plenty of opportunities to promote your business throughout the year. Planning around key shopping days, such as Small Business Saturday or Black Friday, may help you maximize visibility. Beyond seasonal promotions, direct marketing tactics like email campaigns, social media outreach, and even traditional methods like direct mail may be powerful tools to reach your audience. Learning from businesses with successful marketing strategies may also provide inspiration and help you tailor your approach to what works best for your brand.

For more strategies, check out this article from the Black Enterprise website.

Hiring

African American small business owners face the same challenges that any other small businesses face. Finding the right employees and managing overhead may be difficult. If it’s time to bring on an employee or add to your team in place, know that hiring the right people can make or break your company so you want to do it right.

The co-founder of Skillbridge® sums up hiring this way: "Great people versus okay people is the difference between success and mediocrity."

First, determine what kind of employee you need–an employee or a contractor. Before you hire, check with your bookkeeper or accountant to make sure you’ve filed the appropriate paperwork and are fulfilling employee tax obligations.

Employee management

Effectively managing your team and keeping employees satisfied is essential for running a successful business. Happy, engaged employees are more productive, stay longer, and contribute to a stronger company culture.

To create a positive work environment, focus on strategies that make employees feel valued and supported. Introduce initiatives like rewards programs, a healthy and welcoming workplace and encourage meaningful connections between team members. Prioritising employee satisfaction will lead to higher retention rates and a more motivated workforce.

On the flip side, knowing what to avoid is just as important. Practices like underpaying employees, playing favorites or overloading your team will lead to dissatisfaction and high turnover. Taking a thoughtful approach to management may help prevent these and keep your business running smoothly.

Here are some more:

• Long term assignments and projects: Give employees opportunities to challenge themselves and grow.
• Expert guidance: Pair employees with a mentor or coach for one on one support.
• Local networking and training sessions: Encourage attendance at meetups, peer groups or workshops to build skills and connections.
• Cross training: Give employees the knowledge and skills to do tasks across different departments. This will keep the business running when team members are out of the office and boost collaboration.

Business operations

All tasks within a company to keep it running and earning money are referred to collectively as business operations. Entrepreneurs are driven and creative but may not have all the skills needed to run a business effectively. The Minority Business Development Agency within the U.S. Department of Commerce has many resources to help improve business operations. The organization is staffed with experienced professionals, ready to help strengthen, develop and grow minority owned businesses.

Learning from successful minority-owned businesses

The stories of minority-owned businesses show us resilience, resourcefulness and creativity. These entrepreneurs not only show us how to overcome but also share valuable insights to inspire and guide others. From innovative ideas to strategic decision making these business owners are leaving a mark in their industry and community.

Jasmine Parker, owner of Listen to Your Art Therapy & Empowerment Services, LLC, uses her organization to empower teens through art therapy, helping them address challenges like self-esteem, social skills, and behavior management. To grow her business, Jasmine focuses on expanding her mobile services to reach more clients. Her story highlights the importance of adapting your offerings to better meet the needs of your audience.

Fatima Q. Sena owns MPower Fitness and combines fitness and community outreach at her gym in Palm Coast, Florida. She plans to broaden her client base by purchasing new equipment to work with older demographics and using print advertising to connect with local communities. Her focus on diversifying her services illustrates how businesses can grow by targeting new audiences.

As a singer, songwriter, and storyteller, Freedom Bremner, owner of Houseofreedom, LLC invests in marketing to grow his live music production business. By prioritizing social media and online promotion, Freedom demonstrates the importance of leveraging digital tools to reach a broader audience and build brand awareness.

Honoring progress and driving opportunity

Black-owned businesses have long played a vital role in the growth and strength of the U.S. economy, creating jobs, fostering community development, and driving innovation. These contributions are not just part of history—they continue to shape the future of entrepreneurship today.

SmartBiz® is proud to support small business owners, with over 60% of loans funded by our bank network going to women-owned, minority-owned, and veteran-owned businesses. While the path to success may include unique challenges, the stories shared here remind us that resilience, resourcefulness, and community impact are at the heart of lasting growth.

As we celebrate the progress made, let’s also focus on creating new opportunities for the next generation of entrepreneurs. By continuing to honor the legacy of Black business leaders and supporting minority-owned businesses today, we can build a more inclusive, vibrant economy for everyone.