There are 30.2 million small businesses in the U.S. But only a fraction of them survive. Twenty percent of small businesses fail by the first year, 30% by the second, 50% by the fifth, and by the 10th year, a staggering 70% of businesses have shut off their lights.
For minorities, the numbers can be even more daunting. Eight out of 10 Black-owned businesses fail within the first 18 months.
Covid-19 has exacerbated some of the issues facing the Black community. African American entrepreneurs have had to close their doors at more than twice the rate of their White counterparts. Black-owned businesses declined by 41% between February and April 2020, compared with a 17% decline among White-owned businesses.
The killing of George Floyd by a White police officer in May 2020 renewed interest in supporting the economic advancement of African Americans. Amid online support, Black businesses saw huge spikes. Google searches for “black-owned businesses near me” reached an all-time high between May 31 and June 10. According to a survey by the Black Chamber of Commerce, around 75% of Black-owned small businesses saw upticks in customers in the two months following Floyd’s death.
But after the surge, sales at many Black-owned businesses plummeted back to their pre-Covid rates.
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Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.