Black entrepreneurs have spoken of their struggles during lockdown in the wake of a report showing most received no financial support from the government.
The government is facing renewed demands to address systemic inequalities head-on after research found nearly two thirds of Black, Asian and minority ethnic (BAME) business owners felt unable to access relief in the early days of the pandemic.
As reported in The Telegraph this month, an inquiry by a committee of cross-party MPs and the Federation of Small Businesses found a large number of BAME owners said they could not access support because they were rejected, or because of strict qualification criteria and a lack of information.
HuffPost UK has spoken to Black-owned businesses who suggested a lack of trust in the government was also a factor.
It comes as another new report, published on Wednesday, finds systemic disadvantage is a key reason Black entrepreneurs experience worse business outcomes than their white counterparts.
The research by British Business Bank and Oliver Wyman, titled Alone Together: Entrepreneurship and Diversity in the UK, examines the effects ethnic and economic background, gender and geography have on business outcomes.
The research, which will feed into the Commission on Race and Ethnic Disparities established by the prime minister in the wake of the George Floyd killing, showed that on average, Black entrepreneurs report much lower turnover (over a third less), productivity and profit than White owners.
Temu is the founder of south London based gift hamper company Ribbon and Bow. Established in 2017, each gift box is curated with the idea of helping people to connect with their loved ones near or far.
During lockdown, the business saw a rise in monthly sales with more people buying self-care packages and lockdown birthday gifts due to restrictions. But being a mother of two young children, Temu found it difficult to work, with limited childcare options while her husband worked on the frontline.
She also found it difficult to access financial assistance from the government and said a webinar with the HMRC for business owners struggling during Covid-19 was “overwhelming” and geared to more established businesses.
“It was off-putting and I actually feel that it was intentionally so to make the process so long that you decide it’s not something you want to do,” she told HuffPost UK.
“When it comes to taxes and doing your self employed assessment the process is simple. So I was surprised that this wasn’t reflected when it came to accessing financial assistance during Covid.
“A lot of the people who attended were asking the same questions, in the comments section, about how it works. I was told that if your business is eligible for the assistance you’ll be contacted – I wasn’t.”
Temu is pushing forward as best she can. Not just for the sake of her business but to challenge negative perceptions around Black enterprise and help nurture much-needed visibility for such brands.
“In the gifting industry, there’s a stigma that Black-made products aren’t good quality, or aren’t as great looking and professionally done as white counterparts. My products are for everybody but I think that some people are surprised when they realise that a Black woman is behind it. I work with Black owned brands and the quality of their products is amazing – that’s what I like to portray.
“For a lot of Black businesses it’s harder to be seen and showcased on broader platforms. That’s why I felt the need to not give up during lockdown and keep pushing, because it’s important that this changes.”
Sandra Monero was forced to close her Dalston shop Monero Dolls in July after her business was badly hit by lockdown.
The businesswoman, who opened the boutique selling her hand-crafted Black dolls in 2018, was initially unaware that she was even eligible for financial assistance from the government. Between March and June she signed on for Universal Credit to make ends meet.
“I didn’t know what to do, I was low, depressed,” she said. “My dolls weren’t selling, so I created a website. Things were still slow even up until June and then I found out, through word of mouth, that I was eligible for financial help help via the council.
“I was forced to close but it has been a blessing in disguise. It caused me to stop and reflect on what to do next because, at the end of the day, this is my bread and butter”.
Monero, who now runs a pop-up shop nearby, selling her dolls alongside other traders, pointed to a number of “complex” reasons why Black business owners in particular are bearing the financial brunt of this pandemic including inadequate information, a strict qualification criteria and a fundamental lack of trust between marginalised communities and the government, something Temu also highlighted.
“Some are thinking: ‘What’s the catch?” said Monero. “What’s in it for the middle class, white government?’. Some people may ask questions like: ‘Why would someone want to give you free money?’”
She continued: “I can understand why people wouldn’t have faith in their government. They had to find the money all of a sudden – even when, for all of these years, people have been crying out for funding for mental health and youth services, the elderly...only to be told that there wasn’t any!”
BAME campaigners have been calling for the government to launch a Covid-19 race equality strategy in the wake of growing evidence of inequalities amid the pandemic and fears of a deep recession.
Lord Woolley, former chair of the government race disparity unit’s advisory group, said he had had conversations with No.10 about such a review being instigated across Whitehall.
“It gives us a unique opportunity to tackle those deep-seated inequalities, which existed even before Covid-19, that could get very much worse, without dramatic action, without radical action,” he told The Guardian.
Similarly, London mayor Sadiq Khan told HuffPost UK at the beginning of October: “The issues that affect the structural racism that exists haven’t been addressed and the government seems to be hesitant to accept there’s a problem and if you can’t accept there’s a problem, you can’t take action.
“My fear is amplified by the fact that we know we’ve entered a recession but also if we’re not careful this recession will be extremely deep and having lived through the 1980s where Black people suffered disproportionately with mass unemployment I worry about another generation being written off in the 2020s like they were in the 1980s.”
During a private briefing for non-white journalists in April, HuffPost UK asked Chancellor Rishi Sunak if the Treasury will assess structural difficulties facing BAME businesses and individuals, to establish whether there are economic inequalities, above and beyond the idea of poverty.
He replied: “We are very cognisant of the types of sectors that are disproportionately impacted by what is happening and the types of people that work in those sectors.
“And it may not just be ethnicity that is important there, it might be there are various other factors as well that characterise people working in particular sectors of the economy that are impacted.”
But the reality is that Black businesses are continuing to struggle immensely.
In a Public Health England (PHE) review into how different factors can affect people’s health outcomes from coronavirus was published in June, poverty is flagged as an issue.
Erika Brodnock, founder of diversity research organisation Extend Ventures, said a review by the Treasury would have “immeasurable” impact.
“By doing something like this, the treasury would be taking a genuine step towards putting systems in place that are evidence backed that will enable communities that are historically disadvantaged to level up,” she told HuffPost UK.
This summer Extend Ventures and Your Startup Your Story (YSYS) worked with community organisations to survey Black and ethnic minority founders to understand how they are surviving in this economic climate and whether the current government support meets their needs.
The results, published before this second wave of the Covid-19, were damning. Some 48% did not access or expect to qualify for any government support scheme, just 2% of the businesses were seeking government help and only 32% applied for grants.
Brodknock added: “Entrepreneurship is often seen as a means to escape poverty and facilitate economic growth and that growth is then proliferated throughout communities.
“The fact is that Black and minority communities are consistently locked out of access to entrepreneurial support and funding for anything more than a kind of one man band-type shop or market stalls that can only really impact one family.”
Patricia Hamzahee, co-founder of Extend Ventures, told HuffPost UK: “Black people are the foot soldiers of small businesses in towns and communities around this country. As the government’s programmes for supporting businesses and self employed people were being rolled out, my anecdotal understanding from the people I know who are entrepreneurs and are managing businesses was that it isn’t getting to them.”
In June Ubele Initiative, a BAME-led intergenerational social enterprise, called for urgent action to support BAME businesses.
Writing to Alisson Rose, the CEO of Natwest bank, the group said: “BAME founders and owners, who are amongst the vulnerable customers you serve, feel their needs have been overlooked, before and after the onset of Covid-19. We must highlight that equal access to apply for support is not the same as ensuring equity in outcomes in accessing support.”
A government spokesperson told HuffPost UK: “We are committed to levelling up opportunities for all – and that includes supporting entrepreneurs from all backgrounds to succeed.
“We will continue to drive forward progress in this area. The minister for equalities will soon set out in more detail her update to the prime minister this week, on findings of the PHE review.”