Why do so many black owned businesses fail?

Did you know that 80% of small business fail within their first year and only 44.1% survive to the fifth year? The failure rate can be attributed to a wide range of reasons from underestimating competition to a lack of financial planning and the effects of cashflow problems, but it is apparent that there are other forces at play too.

People who start small businesses are motivated by the opportunity to make money and create employment in their communities, but some have more barriers to growing a sustainable business than others. These obstacles correlate directly to their ethnicity and gender.


Here are some facts to think about:

A recent study by the Enterprise Research Centre (ERC) found that of 600 London businesses, 48% of businesses run by ethnic minority leaders have suffered an ‘existential crisis’ within the past five years (15% greater than ventures run by white entrepreneurs). Building any business is a challenge, but black owned businesses and entrepreneurs from minority groups feel the impact more.

We know that lack of ambition is not the issue – data from the Global Entrepreneurship Monitor identified that people from non-white backgrounds are more than twice as likely to be early stage entrepreneurs.


BBA is committed to helping our clients achieve business success; we bridge the gap between your business dream and reality.

From financial planning for startups to sourcing capital and providing tailored business support, we can help you create a sustainable and growing business. Contact us today to find out more.

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