Inclusive Entrepreneurship: Exploring the Barriers Facing Black Entrepreneurs in Canada
4 min read · January 2023
David Coletto, Colin Deacon, and Alfred Burgesson, African Canadian Senate Group and Senator Colin Deacon
Summary
A survey on Black entrepreneurship in Canada, commissioned by the African Canadian Senate Group and Senator Colin Deacon, has shed light on the systemic barriers to growth and success that Black Canadian entrepreneurs face.
The survey found that systemic racism, limited access to capital, and insufficient business networks are the main obstacles that Black-led businesses face. The responses from over 300 Black entrepreneurs showed that regardless of their level of empowerment (further defined below), a significant number believe that their race makes it harder for them to succeed. The report argues that as Canada recovers from the COVID-19 pandemic, it is important to address these barriers and create an inclusive business environment that supports Black entrepreneurs and unlocks their full potential. This requires tailored solutions that meet the specific needs of Black entrepreneurs.
Methodology
The survey was commissioned by the African Canadian Senate Group and Senator Colin Deacon, in collaboration with twelve prominent, Black-led business organizations across Canada and powered by the insights firm Abacus Data.
The survey was conducted between March 23rd and April 15th, 2021 with 342 Black business owners from across Canada.
Respondents were recruited through partnerships with Black-led business organizations, social media, and referrals from survey participants.
The sample variation in demographics, regions, and experiences allowed the identification of two groups of Black entrepreneurs: empowered and unempowered. The report describes empowered entrepreneurs as those who can access support and advice when faced with business challenges.
Key Findings
76% of surveyed Black entrepreneurs stated that systemic racism affects their success as entrepreneurs.
Access to funding and financing was the main challenge for Black entrepreneurs, with 75% indicating difficulty securing $10,000 for their business.
Only 19% of respondents trust banks to act in their and their community's best interest.
The majority of Black entrepreneurs are categorized as unempowered, reporting difficulty accessing support and advice when facing challenges in their business. The report describes empowered entrepreneurs as those who can access support and advice when faced with business challenges.
Many Black entrepreneurs cannot pay themselves: 50% of unempowered entrepreneurs report not being able to pay themselves from their business, and 44% of empowered entrepreneurs report the same.
45% of surveyed Black entrepreneurs deemed Black-led organizations as essential or very important to their business, while 25% considered them somewhat important.
Despite the challenges, 87% of Black entrepreneurs remain optimistic about the future of their business.
Takeaways
The main barrier to growth and success for Black entrepreneurs in Canada, as revealed in the report, is the inability to access capital. This issue aligns with a research question posed by New Power Labs, which investigates the barriers diverse populations face in accessing capital from capital-deploying institutions. These barriers include:
Systemic racism that makes it difficult for Black entrepreneurs to succeed (76% reported this)
Low trust in banks among Black entrepreneurs (only 19% trust banks to act in their best interest)
Lack of knowledge on how to access support or advice for their business (a majority of Black entrepreneurs)
Read the full report here.
References
Coletto, D., Deacon, C., and Burgesson, A. (2021). Inclusive Enterpreneurship: Exploring the Barriers Facing Black Enterpreneurs in Canada. African Canadian Senate Group & Senator Colin Deakon.
