Black-owned small businesses are facing record-low sales, a stark contrast from a year ago. Here's why.

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Black-owned small businesses are facing record-low sales, a stark contrast from a year ago. Here's why.
Rochelle Porter, the founder of Rochelle Porter Design.CatMax Photography for Rochelle Porter Design
  • Black-owned businesses got an outpouring of support during the US's racial reckoning in 2020.
  • But a new report from Meta found that 51% of Black-owned businesses were experiencing low sales.
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In the weeks and months after the US's 2020 racial reckoning, as protests erupted across the country following George Floyd's murder, Black-owned businesses received a historic outpouring of support.

Founders such as Rochelle Porter, who owns the decor and activewear brand Rochelle Porter Design, saw their sales and follower counts soar. At the onset of the COVID-19 pandemic, Porter started selling masks, and as people quarantined, they outfitted their homes with her vibrant textiles. Then, press coverage sparked a flood of sales as social-justice issues took center stage.

But as the pandemic wore on, much of that consumer enthusiasm waned. "We've definitely seen a leveling off since then," said Porter, who's in Atlanta.

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The US is experiencing a boom in entrepreneurship, and women of color are the fastest-growing group among new business owners. But a new report from Meta found that compared to last year, businesses run by underrepresented founders were 14% more likely to report lower sales than other businesses. Meta's report on the global state of small business — which surveyed 5,324 small-business leaders in the US (and more than 24,000 globally) — cited the same disparity in its findings from the previous year, which were released in June.

Underrepresented business owners have faced greater hardships recovering from pandemic-related setbacks, Nicola Mendelsohn, the vice president of Meta's global business group, told Insider.

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When broken down further, the report found that 51% of Black-owned businesses were experiencing record-low sales compared to January 2021, versus 36% of all US businesses. Black-owned businesses were also the most likely group to report closing in the past year.

"Black-owned businesses have faced additional hardships, such as reducing employment, as a result of the pandemic," Mendelsohn said. "They've also cited cash-flow issues and a lack of demand as reasons behind lower sales."

While slower months — January and February in particular — are to be expected in retail, Porter said media coverage and social-media traffic petered out as early as the first quarter of 2021. This year, she saw a drop-off in engagement on Instagram and Facebook as algorithm changes made it increasingly difficult to reach customers.

"It's really hard to keep up with the algorithm," Porter said. "A post that would have gotten 200 likes last year or the year before is getting a fraction of that now."

Meta has initiatives to funnel education, funding, and business tools to underrepresented founders, including its Elevate program, which trains and mentors Black and Latino business owners in digital marketing strategies.

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If you're a business owner noticing abnormally low sales or decreased social-media engagement, contact this reporter at jortakales@insider.com to tell your story.

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