Tiffany Callender - Co-Founder and CEO of The Federation of African Canadian Economics (FACE).
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The entrepreneurship journey is challenging and filled with hurdles and barriers to overcome. However, for Black entrepreneurs, these challenges are often amplified due to systemic barriers that have existed for generations, limiting their access to essential financial resources. In fact, 80% of Black entrepreneurs said that the lack of capital was the primary challenge they encountered when running their businesses. This is a reality that Black entrepreneurs have to live with and was a primary motivator for me to co-found FACE, the Federation of African Canadian Economics, to accelerate wealth creation for Black Canadians via our Black Entrepreneurship Loan Fund. I believe that four pillars are necessary for any entrepreneur to be successful, and here’s how Black entrepreneurs can start on a path to success:
1. Access To Information
Access to quality information is fundamental for entrepreneurs to make informed decisions and scale their businesses effectively. Despite the existing support for entrepreneurs, Black entrepreneurs often find themselves outside the reach of valuable resources.
There are many reasons for this exclusion. Here are two reasons I’ve come across: First, the services designed for entrepreneurs have failed to engage with the Black entrepreneurial community effectively. Second, Black entrepreneurs might be unaware of these services, limiting their access to vital information for their business growth. Regardless of the reason, it is important to seek the resources and information to arm and empower Black entrepreneurs to make the best decisions for their businesses.
2. Access To Best Practices
Understanding and implementing best practices is crucial for the foundation and sustainability of any business. Whether in financials or accounting, tax schedules, or business registration, these practices are required to set up the building blocks and foundation of your business to maintain the start and growth.
I’ve seen entrepreneurs in the Black community struggle because they’re setting up their businesses based on their understanding of how companies should run. Those processes are not always wrong, but they are not necessarily set up as best practices, allowing third-party professionals to get involved should they need their support.
An example would be a business outsourcing a human resources team versus having those employees internally. How does this change the business payroll, remittance, etc.? These best practices must be accessible to Black entrepreneurs to implement throughout their companies.
3. Mentorship And Sponsorship
Mentorship and sponsorship play pivotal roles in the journey of an entrepreneur. I define mentorship as having access to a professional, not necessarily in your sector, who can provide guidance and be a sounding board for you to solve any problems or take on a new growth opportunity within the company. For members of Black communities, you must be part of the network to identify those willing to mentor you. It’s vital to learn how to attract a mentor and engage with them and what the expectations as a mentee are.
Sponsorship is having someone who can move you into a network where you are not present and vouch for your company’s ability to take on new contracts and clients. A sponsor should provide business development opportunities. They are opting to use their social currency to open new doors. You must be in a network where you can meet someone and present your business model, services or product in order for them to open doors for you. This is where many Black entrepreneurs, who are limited to established networks, face challenges, as they miss out on opportunities that would help their business scale up.
4. Access To Capital
Access to capital is the biggest challenge and encompasses both access to and understanding of the different available types of capital. A recurring challenge is for Black entrepreneurs to be “finance-ready,” which involves having the necessary documentation, like financial statements and a clear business plan. It is also important to ensure that business plans are not stagnant—they need to be updated to align with the business strategy. Without these documents, securing capital becomes increasingly difficult, further impeding business growth and stability.
In recognizing the challenges Black entrepreneurs face in accessing information, implementing best practices, securing mentorships and sponsorships, and obtaining capital, it becomes evident that these four pillars are not merely components but cornerstones of Black entrepreneurial success. Understanding the significance and actively addressing the barriers that hinder access to these pillars is essential for fostering an environment where Black entrepreneurs and their businesses can thrive.
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