Money Monday: The Great Resignation

One of the significant headline stories from 2021 was the great resignation. And while I do not doubt that people were quitting their jobs in massive numbers, I always felt the description was a bit of a red herring, misleading or misguided.

This narrative is not accurate for many Black Americans, given the unemployment rate and the wealth gap. What seems more plausible is that people of color are leaving low-wage jobs for better opportunities, but not to start their dreams or businesses. For those who can fire their employers, and have decided to create their businesses, live their dreams, and become entrepreneurs, here is some advice.

Financing

After resignation, the most difficult challenge you will face in starting your business is funding. Black entrepreneurs have to do more to prove “worthy” of funding for banks and other organizations. One of the areas where black entrepreneurs struggle to raise capital is through venture capitalists. However, here is a comparable alternative for you to consider: Revenue-Based Funding (RBF). Revenue Based funding provides an opportunity for revenue-generating businesses to raise capital without diluting ownership.

Rather than taking equity, investors inject money into a business in return for a fixed percentage of future gross revenues. Payments increase or decrease based on revenue and can be collected from the borrower’s bank account or directly from existing payments systems.

Another source you may want to consider is Community Development Financial Institutions (CDFI). You should note that more than one-third of these institutions are managed or led by minorities instead of traditional banks. Also, at least forty percent of their loans are provided to minority communities. It may just be that you have greater success at obtaining funding through these institutions than traditional sources.

Mentorship

While this may not seem like a financial issue, I would argue that black entrepreneurs incur more significant learning costs than those in other communities.  Blacks starting their small businesses often learn through trial and error. They are advised by mentors who may not be familiar with the barriers facing black startups. While they all need to develop a business plan or budget, who teaches them how to navigate the loan process when facing subtle discriminatory practices employed by lenders or supply chain providers?

So while the Great Resignation affords opportunities to start your own business for many, in some communities, it’s not much more than a dream given the lack of financial reserves combined with that of leadership and mentorship.

Let’s talk Crypto Currency and taxes on the Zoom Conversation This Evening, February 28, 2022, at 7:00 p.m. Sign up at: https://bit.ly/TTCM_Feb2022 or
https://zoom.us/j/97960582729?pwd=WlZKUWpPdDlDdDRTQ1llVjM0VS9idz09

WHAT’S UP!

Today’s what’s up is about Crypto. Tonight we will be talking about Crypto and taxes. Did you notice a change in your tax return form since 2019? Yes, the IRS changed the questions on your Form1040 beginning in the tax year 2020. Check-in later and find out what’s up! Let’s talk Crypto Currency and taxes on the Zoom Conversation This Evening, February 28, 2022, at 7:00 p.m. https://zoom.us/j/97960582729?pwd=WlZKUWpPdDlDdDRTQ1llVjM0VS9idz09.

Ruthven R. Phillip, Esq., is a tax attorney, Stewardship and Philanthropy Ministry Assistant, and CEO of Give2Getrich, LLC. Give2Get Rich, LLC 2022. All Rights Reserved. Any distribution or reproduction of part or all of the contents in any form is prohibited.

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