I fell for America’s white lie, entrepreneurship

My dad came to the United States on September 26, 1966, to pursue his Bachelor of Science degree in engineering at Howard University in Washington, D.C. He had just received his bachelor’s in physics, chemistry and mathematics at St. Stephen’s College in New Delhi, India, but this degree was not recognized as an official degree in the United States when he arrived and he had to start from scratch. An American college degree meant that he would be taken more seriously. As an immigrant and a person of color, he knew he had to do better than the average American to achieve just as much. 

After receiving his degree from Howard, my dad returned to New Delhi to marry my mother. In 1971, my parents traveled together to Washington, D.C., to pursue the American Dream. In 1973, my parents bought a small community grocery, liquor and deli market called Renno’s Quality Food Market located in Shady Side, Maryland. My parents became entrepreneurs out of necessity and because they hoped that this would lead them towards a path to wealth. 

According to Fundera, “20% of small businesses fail in their first year, 30% of small businesses fail in their second year, and 50% of small businesses fail after five years in business. Finally, 70% of small business owners fail in their 10th year in business.” Forty-six years later, my parents are still running their business. They are still on their feet every day from 8 am to 10 pm ordering product, stocking shelves, interacting with customers and offering suggestions on the best local wines. For them, their success in business is about building and serving their community. They are part of the minority of entrepreneurs who beat the odds.  

I know that owning your own business is complicated and unpredictable. We are fed stories about the idealistic view of entrepreneurship, not the reality that most of us face.  

In 2013, my husband and I decided to quit our jobs and open up a spice shop in Union Market in Northeast Washington, D.C. We hustled for six years to grow a business that had two locations and five employees. We had a product that people wanted. We built a niche for ourselves in the community. We were industry experts; chefs and bartenders from D.C.’s hottest restaurants hunted us down for the most obscure spices.

Nevertheless, we struggled. As business owners, we were caught up in running our business and it was difficult to connect with and learn from our community of like-minded entrepreneurs facing similar issues. We struggled to build a strong, reliable team of employees. We struggled, as a married couple and new parents to twin boys, at starting and running a business together. We struggled with the government bureaucracy we needed to navigate to grow our business. We struggled because we had run out of money. 

Entrepreneurship is a capital-intensive experience which makes it quite challenging for those with little access to capital to pursue. For example, the cost of insurance, licenses, inventory and equipment serve as financial obstacles to an entrepreneur even before a business opens its doors. 

There is a myth that entrepreneurship is a path to wealth. Entrepreneurship was far from a wealth-building exercise for me. The pursuit of entrepreneurship actually landed us in debt. By 2019, we had to close the shop. All of the pieces didn’t come together in the dreamy way entrepreneurs are told they can. 

Lack of access to capital is symptomatic of the racial wealth divide and increases the barrier to entry for most entrepreneurs of color. Historically, discriminatory lending practices prevented people of color from using traditional banks and lending institutions for obtaining capital. People of color have higher income and collateral requirements to secure loans. 

In a 2109 report, Disinvestment, Discouragement and Inequity in Small Business Lending, the National Community Reinvestment Coalition said, “Bank loans and business credit cards are more common sources of financing than venture capital, providing 5% and 2% of capital for established and expanding small businesses.” Higher interest rates typically accompany the loans or credit cards that people of color seek from banks or other financial institutions, making the cost of starting a business higher for the already economically disadvantaged.

Entrepreneurial support networks built specifically for people of color are scarce. Some organizations provide excellent resources for entrepreneurs but have high barriers to entry, such as income requirements. Members of the Entrepreneurs’ Organization, for example, “must be the owner, founder or majority stakeholder of a business earning a minimum of $1 million (USD) in revenue during the most recent fiscal year.” 

Access to capital and support networks are needed for sustainable entrepreneurship, particularly for communities of color who have low levels of wealth. I want to see networks of entrepreneurs built by people of color for people of color with lower economic barriers of entry. I want to see more equitable resources offered for those between “just starting” and those with $1 million per year revenues. I want to see more accessible financial planning and financial education resources related to business growth offered to people of color.

We all define “entrepreneurship” and “success” differently. My parents have had the tenacity to run their own business for over 46 years, despite the odds. Their willpower influenced me enough to try to create something of my own. Though it didn’t quite work out for me the way I envisioned, if my children are to ever want to pursue entrepreneurship, hopefully, the resources will be in place for them to be successful in whatever way they choose to define success.

Monica Grover is the special assistant to the Race, Wealthy and Community chief at NCRC.

Photo of the Grover’s spice shop, courtesy of Monica Grover.

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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

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