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Black community shopping habits.

Where do we stand on the subject of spending money within our community and supporting each other? Let’s find out.

2020 lockdown amplified many social issues that we previously thought that were non-existent or we simply ignored because we were very consumed by our very busy lifestyle. One of the major problems is systemic Racism (google it), and its consequences in our community. With most of the general population quarantining in their homes with their eyes glued on their phones and TV, the death of George Floyd woke us up from a deep sleep. The issues we are facing as a community are not new, we have been talking about it for many years and throughout many generations. It seems that like there is no end to it. We know what the problem is and we also understand many different solutions.
One thing is for sure, if marches resulted in major changes, Racism and discrimination would be a thing of the past.

From our perspective the pushes in law only cause resentment from the oppressors, resulting in the majority of the population just hiding it instead of looking for ways to educate themselves in the issue and kickstart real changes in behaviour. Racism can only be eradicated through education of the masses from the early stages of education.
In the meantime, we can take action by empowering ourselves and take ownership of our future and the future of our kids. We were once a victim, this day and age we have the option to create our economy and support each other.

We must understand that other communities also suffer from Racism, e.g. Asian community and Jew community (and many others). Jew community have so much power (Economic power), that no person, especially those in the position of power, can mention anything against Israel without risking losing everything.

The Asian community here in the UK also have economic power, although they can still suffer from discrimination, they are a very cohesive and united community. This allows them to build generational wealth and support each other. They buy from their own, regardless of pricing.

Our community, the black community we consume a lot from other communities. We don’t have our economy. We don’t own, except for people in sport and music industry. Most of go to work, get paid and return all the money directly to the system without first moving it within our community.

By taking small steps of keeping the money a little longer in our community, we can grow together and start creating our economic power, possible start developing African countries by kickstarting the industrial revolution. The same also applies to the countries in the Caribbean islands.

We have created 2 surveys, one for customers and the other for businesses so we could have a clear picture of our shopping habits. We have had very little engagement and will present the raw figures as we have received them. Please note that the representation is too small. It should not reflect the shopping habits of the majority of people in our community. Also, as this was posted on our page, the responses are from the people that are very aware of black-owned businesses and are interested in doing their businesses within our community hence why they follow our page.
We want to thank everyone that has responded to this survey as they have given us some insight to work with and allowed us to write this article.

Customers viewpoint:

When we asked customers about the challenges faced when buying from black-owned businesses:

We had 39 responses, we will share the most relevant and non-repeated/similar responses.

  • The availability of different types of products I find that most black businesses are within the same field but that means that there are gaps in other avenues.
  • Pricing the items are great but if you are on a budget, they could be purchased cheaper elsewhere unless it is a specialised or niche item.
  • Customer Service and opening times.
  • Professionalism, products are sometimes priced different (more expensive than advertised) poor communication, receiving or sometimes not receiving product advertised to then be told this is what’s left basically.
  • Lack of response & not being appreciated as a customer.
  • Price and variety.
  • I have only had two problems. I bought from the US and didn’t receive a large amount of my item. I emailed the business and the owner instantly accused me of lying and said overseas are the ones to always steal from her. She forgot to pack it but blamed me. She had a massive tantrum and said she isn’t shipping me my goods and refunded me and said she isn’t shipping overseas again. I never brought from her again because she handled it terribly. Another business I bought from instantly gave me a refund after I spent a large amount with them and they did not email me to explain why. I had to chase them up and ask them for their reason and they said they are not shipping to the UK because of COVID, yet they continue to ship within the US. It’s been months and they still won’t ship to the UK, so I will now not bother with that company. How they respond to customers is awful. They respond with no professionalism, no greeting and no thanks. All other black businesses I’ve dealt with, mainly from the US have been great. I am a repeat customer with most.
  • Product range, speed of delivery. Price point for fashion which is ever changing.
  • Would like shops to open at opening times and not several minutes or hours after.
  • Some of the providers don’t have online platforms to sell products or services.
  • I want to support more black brands but one particular black site that carries a brand I like has terrible communication. All my questions go unanswered & beauty mistakes get expensive.
  • If I could I would buy exclusively from black owned businesses. The challenge I’m finding is many businesses are offering similar products in the same areas and some areas not at all.

We have also asked for suggestions on how to improve customers overall experience:

  • Accessibility needs to be increased because often it is hard to locate black owned businesses and a lot of these directories need to improve their search bars
  • Better promotion, an easily, fully comprehensive directory. Or an easy to navigate directory like an “Argos” where everything from everybody is included & you just have to search product rather than going through each shop.
  • Have a website that is user friendly, grouped by product and make it easy to buy. I buy alot through Amazon, it would be nice if ‘bob’ had some kind of symbol or destination shop on their so that they are easy to identify… Even BLM garments and tshirts were being sold by Chinese mega factories, so it would be good to be able to not only find a product but also know that the seller is black.
  • Focus on strengths and either employ or invest in areas that are weak e.g social media/websites. In this current climate it is even more important to have clear up to date information and prices on websites. It’s also paramount to respond to messages/ enquiries. If there’s a delay be courteous to let the consumer know at the very least. Also, if a product is unavailable, please state so and don’t wait for complaints before you act. Lack of communication in any circumstances is very off putting. As is not being available for pre-booked appointments paid in advance, cancelled with no valid reason. This does not deter me from shopping black but reduces who I would be returning to as a regular consumer.
  • I struggle to find Black Owned Businesses for basic everyday essentials such as cleaning products, towels, socks and underwear. I generally find that the black Owned business I come across sell luxury products, but it would be great to have some basic products that I can buy in bulk. I’m also looking for furniture companies.
  • Good customer service is what I find a lot of black businesses lack. This is definitely an area that needs working on, because they will drive customers away. Building relationships with customers is a must and speaking to them properly via email or phone is essential.
  • I like the way Afrocenchix send emails like it’s a friend! Humour me, finesse me to get me to spend more of my coin!
  • More information about where materials are sourced. Are they eco-friendly? Are they shipped or locally sourced?
  • Improve delivery times and more consistent quality checking across products.
  • Create formal websites. I’ve seen many black owned products I would like to buy, but the business doesn’t have a formal website and they want you to place orders and complete transactions via social media channels instead.
  • The quality of service needs to be as good as the products. Don’t rush to start up if you’re not ready: don’t put up a website that’s half finished or have too many “coming soon” notices that never change status

Businesses Viewpoint:

Few businesses weren’t formal which difficulted access to funding, other raised the question about lack of knowledge of funding options.

Most of the businesses agree that funding and mentoring will be a great benefit for their businesses to scale.

We have received over 20 responses on this subject. Almost every single one of them agree that they don’t see benefits from using ads on Instagram and Facebook. There is little impact and there is little to no conversion.

Suggestions (from participants):

  • We need to do more for people to patronise black owned businesses.
  • Starting a business is really hard. It takes time and effort. Our community support is still lacking. Even, people you support they don’t support you unless they see you successful.
  • It’s just generally harder to do anything if you’re black, and us black people need to do better about buying black and not just talking about it.
  • This is not specific to being a black owned business but small business in general. A lot of consumers, especially in the click and buy world expect Primark prices for hand crafted items which cannot be done. It makes getting a look in or foot in the door hard. However, just being pushed and promoted by one another with feedback as those first sales begin can help. Thanks for your platform.
  • Competition is a barrier, being a new business and not yet establishing trust with customers.
  • Black people who expect discounts for supporting black businesses is a mentally we need to change.
  • I think it’s just a case of working hard and remembering that building a brand takes time 🙂
  • Young black entrepreneurs need help but no one is there I been trying all angles an it’s not easy.
  • Black owned businesses are shunned by every community even their own. The sad reality is no one really wants to support a black owned business.

Please let us know what you think down in the comments section.

man, think, thinking

PRICING – Sales volume vs. Profit Margin

One of the biggest dilemma when starting a business is how to price your products and services. Unless you are creating a novel business idea, you will have to look into market prices for the same product and compare.

Factors to take into consideration depending on your Products/Services:

  • The costs – How much is the bulk supply/material cost of your product? Can you get it cheaper elsewhere? Other costs such as electricity, water? physical location(warehouse/home/office)? Do you pay rent? How will you be delivering the product to your customer? What about marketing? Any business needs a marketing strategy.
  • The labour – How much is your time worth? Will you be paying someone else the same amount to do the work you’re doing? Don’t overpay yourself, be fair on the price
  • Business strategy – Will you have a website? Will you use multivendor e-commerce? Will you have a physical shop? Can you apply a discount or reduced price during the sales period?

 

All the above factors can have a huge impact on your profit margin and determine whether your business can survive long term.

Relying regularly on discount can damage your profit margin. For example, how many people will wait until their favourite product is at discount price before buying? For savvy shoppers, it is common knowledge that Tesco, Asda, Boots and other supermarkets will have discount prices every month on their favourite products. Another great example is GAP, anytime you go into a GAP store you will find sales. GAP is a store that is so embedded in a sales culture that if they decided to stop the sales it can be their downfall.

We will go into some examples just to give a perspective.

Some business use premium prices strategy in which they mark up their prices higher than their competitors, thus giving a perception of the higher quality of their products to their customers. Most of the businesses that use premium strategy are usually luxury brands and services. They use specialized marketing strategy to change the customer perception value, e,g, vita coco (that damn water soo expensive), Jimmy Choo, Louboutin, VOSS water, you get the picture 😉

Businesses such as Poundland use economy pricing. Sell cheap, sell lots, happy customers, happy sales volume, winner winner chicken dinner. Poundland is worth at least a billion.

Another aspect of pricing is when you want to “steal” customers from your competitors. A great example is Netflix. It is pricing your products in such a way that you will have an initial loss, but with a plan in mind to take over the market. This type is strategy is usually long-term and you must have support in the form of funding. All in all, Netflix is quite cheap and good value.

Businesses in IT industry use a different strategy, they usually sell a good quality product at a very initial high price (Apple, Samsung), with the time as they develop new products they will gradually reduce the price. They make one hell of a profit. That being said Apple computers will last over a decade, easily, while windows computers, although cheaper they won’t last. Windows don’t offer software updates too, whereas Apple will for free.

Ok, enough of the faff let’s address the elephant in the room:

  • Many recommendations set the pricing to be around (costsx2 or 2.5), for the majority of the business we agree with this pricing strategy.
  • Instead of pricing an item £10, price it a £9 or £9.99, this is called “the 99 effect”.
  • If you have multiple products maybe consider selling some items at costx1.2 and others at costx2.5

 

The main question you should always ask yourself is “Will I buy this product at this price?”

Another important point we mentioned numerous times is investing in good content, find a good package, label your products using high-quality material and take great pictures. The perception of your product is the value of your product. It is important to also know your public and their shopping habits.

Challenges and Barriers faced by black-owned businesses.

Opening a successful business is already very difficult but when the business is black-owned, the barriers can be overwhelming to the point that you might give up or never break the red line that leads to success.

The underlying and embedded economic disparities pose a detrimental threat to black businesses.

Institutional barriers

Funding is often the biggest challenge for new entrepreneurs, regardless of race. Almost no one gets to start armed with a check for the full amount they need to get things off the ground. So many of us resort to either digging into our own pockets or turning to family and friends for investments.

So, if you’re a black entrepreneur and you’ve resorted to using your own cash, or you’ve decided to turn to your family and friends for funding, you’ll almost inevitably start with lower capital.

Sometimes for even simple things like opening a business account can be challenging. You encounter a lot of bureaucracy and most likely you will be rejected by a 1 or 2 high street banks.

According to Eric Collins from impact Investment capital does not always find the best opportunities. Pat McGrath, MBE, the British makeup artist and powerhouse behind global cosmetics brand Pat McGrath Labs; Cathy Hughes the billionaire founder and chair of publicly-listed Urban One; and Richelieu Dennis, founder of global skin and hair company Shea Moisture, which was acquired by Unilever, were all rejected by various investors. Despite initially being turned down for funding they have gone on to great success. But the truth is, as black-led businesses, they’re more likely to be rejected because the reality is most investment goes to companies founded and led by white men.

It is predicted that Covid-19 followed by a financial crisis resulting from the lockdown will wipe-out almost 50% of black-owned businesses.

A report conducted by Diversity VC and RateMyInvestor found that less than 1% of venture capital is invested in black businesses in the US and the number for the UK is no better. 

During the recession that followed the 2008 global financial crisis, a report prepared for the Department for Business Innovation and Skills by Warwick Business School into the effect on bank lending to SMEs found that businesses owned by black Africans were 11.9% more likely to be rejected for an overdraft than white-owned businesses. When black African-owned businesses did manage to secure overdrafts, they paid margins that were 2.12% points higher than margins paid by businesses with a white principal owner. When it came to term loans, the report revealed that businesses with a black African principal owner were 14.4% more likely to experience rejection than businesses with a white principal owner. 

A 2009 report from the Equality and Human Rights Commission on the impact of the last recession said there was evidence that “black ethnic groups may be faring particularly badly”.

The status quo leaves minority founders fending for themselves

The black British entrepreneur, almost invisible in the public consciousness, is more and more common in fact. A report by the Department of Trade and Industry shows that nearly half of black-owned businesses have been trading for less than three years, reflecting an upward trend, with more moving away from niche services such as black hairdressing and catering, and into the mainstream, especially the IT sector.

There are 10,000 black-owned businesses in London, accounting for 4% of all firms in the capital and bringing in £4.5bn for the nation’s coffers, with many thousands more across the country. And the numbers are growing.

Charles Ejogo set up Umbrolly three years ago after being made redundant at Merrill Lynch. With a company worth £1m and umbrella-vending machines in 400 shopping centres and train stations, he says the refusal of banks to lend to him only spurred him on.

“If you go down the traditional routes, there is discrimination,” says the entrepreneur. The banks will probably turn you down. But part of being an entrepreneur is being able to adapt. If the idea is good and strong, there are people out there who will invest.”

Lack of support

When Khanye Molomo started her writing business, she approached her uncle for guidance. He was in a completely different industry and owns a brick-and-mortar business, but she turned to him because he’s the closest relative she had who’s a business owner. She needed advice on a lot of things – budgeting, marketing strategies, how to position yourself to attract ideal projects, and so much more. He helped her prepare for the challenges he experienced that she had no idea were coming.

Unfortunately, many black business owners don’t have access to mentors. The main reason? Not nearly as many black people, on average, have successful entrepreneurs within their families or social circles.

You might ask yourself what the actual value of a mentor is in this day and age. With so much information at our fingertips, can’t you just Google the information you need?

Well, of course, you can. But research reveals that mentoring has a significant impact on small business success. Mentors help you expand your network. They help you reach markets that can be difficult to access. They can also share with you lessons from their experiences, which is hard to come by, even from some of the best business books.

Without proper financing, it’s difficult to get the employees you need, to advertise yourself, and to purchase the equipment and materials you need to start making your art on a larger scale. Black artists, designers, and other creatives start their businesses on lower funding in part because of these socioeconomic barriers, and this has an adverse effect on how they can grow their companies.

Moral support is something usually taken lightly but it is of higher importance. You’re 90% destined to fail if you don’t receive support from your partner and family. You need that support in order to keep pushing, it is already very difficult enough going through the huddles with strangers. But family and friends must be at your side

Lack of Unity

Unlike other communities, the black community don’t have the habit of buying from our own and the challenge is often higher when we try to reach other communities.

All the factors described above can have an impact on the pricing of some of the products. On the other hand, you have customers expecting the price to be cheaper because without taking into consideration the production costs. This leads into black business owners going extra-mile to try to satisfy the customers by writing personal cards, giving free items or giving out discounts. 

Until we accomplish the goal which is to give equal opportunity to black-owned business, we will never leave this vicious cycle of the problems we are facing in our community. 

Despite these challenges, we’ve seen a significant increase in the number of black entrepreneurs over the past few years, in particular, black female entrepreneurs. Black women have become so invested in starting their own businesses that they’ve surpassed the number of black male entrepreneurs, making them the only ethnic group that has more female business owners than their male counterparts.

The origin of all the challenges faced by black-owned businesses came from Racism and Discrimination. It has been in the spotlight for many years but never tackled. We do talk about it for a few months, then it goes quiet for years until an event brings it back to the spotlight. 

To solve this problem, we need to Unite. No one on their own can solve this issue because we don’t have enough power, we don’t own banks, we are not proportionally represented in the political spectrum.

References:

– Molomo, K (18 February 2020) The Unique Challenges Faced By Black Business Owners, Available at: https://blog.bigcartel.com/the-unique-challenges-faced-by-black-business-owners (Accessed: 03 August 2020).

– Collins, E (19 June 2020) Black businesses are in crisis, Available at: https://sifted.eu/articles/black-business-crisis-uk/ (Accessed: 03 August 2020)

– Smith, L (15 May 2006) Black entrepreneurs break through the red line, Available at: https://www.theguardian.com/money/2006/may/15/discriminationatwork.discrimination (Accessed: 03 August 2020).

money, coin, investment

How To Become A Millionaire – 5 Tips

Do you want to know how to become a millionaire? If your answer is yes, then the first thing you need to realize is that becoming a millionaire is an exact science. By this I mean that you can follow the path of other millionaires and achieve the exact same results. However, for most people, the formula to becoming a millionaire remains elusive mainly as a result of taking in too much information from too many sources and failing to act on it.

The formula to becoming a millionaire can be likened to a cake recipe. If you gave the same recipe to 10 different chefs around the world, they will come up with the exact same cake. To become a millionaire, you need to find the right recipe and follow it to the letter until you start seeing results.

Here are 5 tips to guide you along the way:

1. Get a Mentor

Getting a mentor who has already been there and done that will cut down your learning curve significantly. It will save you the trial and error which could lead you to make very costly mistakes that could wipe you out before you develop the momentum to bounce back. Note however that most self-made millionaires are very busy and guard their time jealously. Identify their current interests and find a way to attach yourself to their top priorities to get noticed.

2. Be solution oriented

To become a millionaire, you have to learn to be the kind of person that looks at the silver lining in every cloud. Be a problem solver and look for opportunity where others see obstacles. Learn to see with your mind and suddenly you will see so many money-making ideas around you. Start each day by asking yourself how you can create value for as many people as possible.

3. Start thinking about working for yourself or through others

If you think you can become rich working for someone else, think again. It is almost impossible to become a millionaire as an employee. This is mainly because you do not have control over the sustainability of your income. Furthermore, a millionaire mindset in most cases conflicts with that of an employee. However, when working for yourself, you have to learn to get work done through others which in turn will leverage your time and resources.

4. Picture your success

Clearly imagine that you already have what you hope for, and that you have already reached your goals. One proven way is to practice back to the future thinking. This is where you imagine yourself as being a millionaire, and outlining the steps you took to get your there. Work your way backwards until you arrive at where you are, and then take action. This will keep you motivated.

5. Face your fear and take action

If you believe that you cannot do become a millionaire, then you are right. You will never achieve anything in life if you do not believe in yourself. Money is attracted to great ideas but you need to overcome your fear of failure to be able to pursue these ideas to a point at which you start making money.

Ask yourself how much value you create for every hour you spend working. This will help keep you accountable for your time.

Remember, you are your wealth. The Money that flows to you is just a by-product of your non-financial resources. That is why most self-made millionaires can lose their entire fortunes and rebuild their empires in record time.

Article Source: http://EzineArticles.com/5752225 by Augustine Mwanje