A Channel 4 and Clear Channel study has revealed that Black entrepreneurs face more obstacles setting up and running their businesses than their white counterparts.
The study showed that Black business owners face more challenges generating funding and more feel they have to fight hard to convince investors to believe in their businesses when compared to white business owners.
The findings, which featured responses from more than 500 entrepreneurs, revealed that 56% of Black owned businesses only receive funding once they had already grown a successful business, compared to just 35% of white business owners who were given the same requirement. In addition, 53% of Black owned businesses agreed they had to fight hard to get others to believe in their business compared to only 40% of white owners.
The research also showed a huge gulf between how much funding people believe Black businesses receive compared to how much investment actually goes into Black owned companies. White respondents guessed that 21% of total funding goes towards Black led businesses while Black participants estimated 15%. But the reality is that Black businesses attract just 0.24% of total venture capital investment.
For the study, Channel 4 teamed up with out of home media company Clear Channel UK and the creator of the Black Pound Report, BACKLIGHT, to better understand and mitigate issues faced by Black business owners.
Independent research company, The Good Side, was commissioned to undertake the study by Clear Channel and Channel 4’s commercial arm, 4Sales, as diversity and inclusion in the media – and the UK as a whole – is a top priority for both media owners.
In terms of a robust entrepreneurial spirit among Black and Multi-ethnic entrepreneurs, the study found that:
• 46% felt they could always run a successful business vs. 29% of white entrepreneurs.
• 71% expressed they always wanted to be their own boss vs. only 54% of white respondents.
• 62% of Black and Multi-ethnic entrepreneurs started their businesses under 30.
• 1 in 8 Black and Multi-ethnic entrepreneurs started their business as teenagers, twice the level of white owners.
The results also revealed that more Black business owners (64%) cite advertising as being very important to grow their companies compared to white owners (40%). Consequently, 47% of Black and Multi-ethnic entrepreneurs said they would find an initiative that helps with advertising appealing vs. 29% of white entrepreneurs.
Caroline Forbes, Head of Sales - Out of Home Agencies at Clear Channel UK, said:
"This comprehensive research study has been invaluable in helping us to better understand the challenges that Black entrepreneurs face and how we can further support them as a media owner. With advertising being identified as one of the vital parts to business success, we will continue to create more visibility for Black-owned businesses on UK's high streets through our Clear Channel Compass initiative in line with our ongoing commitment to be both a Platform for Brands and a Platform for Good."
The Clear Channel Compass scheme was launched last year in partnership with Jamii to support Black owned businesses with free outdoor advertising space. To date, eight businesses have benefitted from the scheme and applications for 2023 will be opening soon.