Buying Black: Business Sustainability as a Pathway Towards Intergenerational Wealth Creation in the Black Community
Canada is a beautiful country teeming with innovation and opportunity. But like the rest of North America, this opportunity is not evenly distributed. Research has shown for example that a staggering 67% of Canada’s Black population ranks in the bottom half of family income distribution. In the United States, Based on data from the Federal Reserve’s Survey of Consumer Finance, the typical black family has only 10 cents for every dollar held by the typical white family.
Entrepreneurship can be one of the key catalysts for empowering many disenfranchised Black communities in the country, however Black businesses routinely struggle and often fail.
We know that our communities have been working and building wealth for years – why is there still a wealth gap? Why are our communities still disproportionately affected? Most importantly, what habits or trends are keeping us where we are at.
Let’s take a look at Nielsen, who conduced and shared his research on the habits of consumers. Nielsen takes an in-depth look at Black buying power to document the trends associated with the Black community spending habits in the United States.
Black consumers and consumers of color alike are making considerable contributions to the overall market—in some cases representing more than 50% of the overall spending in key product categories. – Nielsen.
We would assume that by making strong contributions to the market this would represent that we are gaining wealth - however, think about this for a moment. Our buying power, what does it represent? Is it money that is leaving our families? Without taking into account taxes and additional fees, how much money are we truly keeping for ourselves?
Alfred Edmond Jr., Senior Vice President and Editor-at-large of Black Enterprise wrote in 2017 “Wealth is not measured by income, but net worth: your assets (what you own) minus your liabilities (what you owe). How do you know that income is not wealth? Because your salary (unlike stocks, bonds, cash, real estate, precious metals, jewelry, fine art, a business and other assets) cannot be passed down as an inheritance to your children… "
Alfred made a point in differentiating the importance of building assets vs. liabilities. It is important for us to ask ourselves - When we say we are not able to build our businesses and other assets such as savings, life insurance, or a home - yet we are directed to live with debt from credit cards, student loans etc. we need to start questioning why do we carry these habits and how they will continue affecting our generations to come. This is the sustainability piece that is important to our communities. Can we afford to be uncertain? Can we afford to not care anymore? Can we afford to not share resources or supporting each other to build wealth?
“To the degree we withhold our spending from companies that are harmful, disrespectful, or unfair to black consumers, and intentionally direct our dollars toward companies (including black-owned businesses) that are beneficial to black communities and value black consumers, our spending power is important.,”
In conjunction with both the United Nations’ initiatives for the International Decade for People of African Descent (2015-2024), and Black History Month, many movements have gained power with the intention of strengthening our communities. For us, everyday we ask ourselves - what role do we have to play in this shift? This is why we created AfroHub Marketspace.
Sustainable, long-term change only comes with long-term solutions.
Sustainable Impact for Black Communities
We don’t want to just follow the society or the mainstream movements that cater to the masses on social media. Our impact comes by strengthening our communities by strengthening our businesses. From shining light on the untold stories, understanding and working around systems with Black business owners to providing a pathway to transition into the online ecosystem. Our impact is there for generations to come.
To me this is deeply tied to our culture. We don’t make decisions based on what is best for us at the moment but we always have to ask ourselves - how would this affect my family? In my case, I look for 7 generations down the line and every day I work to build something that my children and their children will be proud of.
This has not been an easy process though. Disassociating myself from harmful habits and ways of thinking is a continuous process. However, by becoming aware of my own power and what role I played in all of us building wealth a new sense of responsibility took over me.
The ability to build wealth is deeply tied to our spending habits. “So that after we pay income and other taxes, and for necessities such as housing, food, and transportation, we have something left over to not just spend, but to earmark for emergency savings, retirement savings, an investment portfolio, buying real estate (beginning with our own homes), financing businesses, and acquiring other assets” - Alfred Edmond Jr, Black Enterprise
While Alfred emphasizes that our ability to build wealth is linked to our personal habits I want to create a link between this and our assets. The way we work through our personal habits, especially financial habits, can be reflected in how we manage our businesses. If we don’t understand how to leverage different resources to maintain wealth in our families, chances are the same is happening with our businesses. Not knowing, being unaware is not trendy anymore.
It is with this same fire that burns when we speak about liberation and equity for all, it also reminds us that we must build capacity in our communities - and we have to be open to receive and implement this change to truly build sustainable wealth.
#afrosustainabilitytip: Send us a message to book a consultation or to attend any of our mindset & sustainable business development courses from our AfroHub Academy.
Has your business been impacted by the pandemic? Please let us know in the comments below so we can share meaningful resources to help your business thrive.
Written & Edited by Yamila Franco
Published by Deborah Motilewa