Business tips and advice for Black entrepreneurs

March 17, 2022

Entrepreneurship has been a key driver of Black wealth for generations. In this article, Cory Highshaw, business banking development consultant with U.S. Bank, shares tips for starting a business.


Cory Highshaw headshotCory Highshaw

Entrepreneurship has been a key driver of Black wealth for generations. According to a 2020 research study, the median net worth for Black business owners is 12 times higher than Black non-business owners.1

Unfortunately, recent pandemic challenges have had a disproportionately negative impact on the number of Black-owned businesses in the U.S. A study from the National Bureau of Economic Research shows the COVID-19 economic shutdown hurt Black American businesses the most among racial and ethnic groups in the U.S., with a staggering 41% decline of Black owners in 2020.2

Although it’s true that the last two years have been particularly difficult for Black business owners, it’s also important to recognize that business ownership still provides one of the best ways to grow Black wealth.1 The key is to learn from each other and mirror the behaviors of successful Black entrepreneurs.

Whether you’re a new entrepreneur or an old pro, the following are some helpful suggestions, thought starters and best practices for how to start a business.


Four key elements to starting a business

Starting a business can take a lot of upfront thought and planning, and what you’ll need can vary depending on the type of business you’re in. Addressing these four key areas early on can contribute to the strength and stability of your business model.

People: Who will influence or play a role in developing your business model? Will you have partners? How do you plan to find employees? How will your business impact your family, positively or negatively?

Self-discipline and organization: How will you prioritize your work-life balance? What habits can you establish early on that will enable this?

Sales strategy: What are your business goals? How will you achieve them?

Financial systems and planning: How will you manage your finances? What financial services and support will you need? There are numerous financial services and systems for business owners to consider:

  •  Automated payment system for the day-to-day running of your business (and could provide a streamlined and efficient way to manage finances)
  • Payroll management system to manage payroll for your employees.
  • Fraud protection services to protect yourself and your business from fraud.
  • Banking services, including checking accounts, credit lines and/or loans.


Five key steps for managing cash flow

Cash flow is one of the biggest financial planning issues for a business. Consider the following best practices to help you manage it successfully:

1.     Keep cash on hand: Just like in your personal finances, your business should always have a reserve or emergency fund to cover slow periods or unexpected expenses. If possible, have enough cash available to cover three to six months of expenses to help you cover important costs like payroll or inventory.

2.     Keep control over your invoices: Record and track invoices sent, payments received, and delinquent payments to ensure you’re not leaving money on the table or negatively impacting your cash flow. While it can be hard to follow up on unpaid invoices or pressure clients to pay, doing so is critical to your cash management. Review your clients and establish payment plans to confirm consistent payments.

3.     Don’t overdo inventory: When possible, keep only enough inventory on hand to meet your customers’ needs. With many manufacturers and material providers offering discounts for buying in bulk, it can be tempting to order an excess of inventory in exchange for savings. But idle or expired inventory comes with cost, and those must be weighed against the savings. When borrowing to cover the cost of equipment or inventory, you’ll want to be mindful of payments and interest and make sure you can handle the terms of your loan.

4.     Be careful with credit: Limit how much you borrow and how much credit you extend to your customers. If you allow customers to buy now and pay later, you need to have a credit approval process in place to make sure your clients qualify and can pay.

5.     Keep costs under control: Consider what you’re spending and whether it improves the health of the business.


Establish a strong support system

Starting a business will involve many learning moments and often many unplanned or unpredictable setbacks. Review your current situation and goals and line up resources to help you turn your vision into a solid business plan. Having an established group of partners and a network of business contacts can help provide assistance and guidance when and where you need it.


Get more tips and guidance on starting and managing a business.


1 Study: Black Entrepreneurship in the United States. University of Nevada, Las Vegas, July 2020.

2 COVID-19, Small Business Owners, and Racial Inequality. NBER, December 2020..

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