Leveling the playing field takes on a new meaning for Black owned businesses post-pandemic and digital transformation is making it possible. One of the many observations we recognize for Black-led organizations and other firms within underrepresented business communities is the ability to create story and build community around those narratives through digital entrepreneurship.
Digital transformation for Black owned businesses considers the unique ways of digital adoption for Black founders and challenges for Black owned businesses, such as adverse effects of the pandemic or lower rates of investment capital, while maximizing approaches to digital entrepreneurship.
What is digital transformation for small business?
Digital transformation for small business is multi-nuanced and varies for every small to mid-size business across different industries and markets. One common factor is development of digital strategy that considers the current state of business operations to help organizations move to a future state, as well as how engagement with real people is improved. Aha! Notice that we state, “real people”! Real people indeed.
Contrary to common misconception, digital transformation and digital strategy absolutely must consider the people who are going to be involved in the transformation itself (vendors, decision makers, employees), and the people it will impact once it is set into motion (your employees and customers). It is after all, a transformation, which can quite easily feel like a disruption without merit. Change management is a critical aspect of digital transformation... and really for any shift in human behavior.
For Black owned businesses, digital transformation can both be directly related to revenue goals, as well as human centered outcomes like community engagement. Ultimately, the goal is to be transformative rather than simply adopt or onboard new tools and technologies without a data-driven rhyme or reason.
It takes strategy.
What does digital transformation mean for Black owned businesses?
There are more than 3.12 million Black owned businesses in the United States as of 2023 with more than 140,918 of those being employer firms providing more than 1.3 million jobs. Even further, Black buying power is projected to surpass $1.8 trillion in 2024 making the Black dollar invaluable. According to the Black Innovation Alliance’s 2022 Black Liberation and the Digital Economy (BLADE) Report, digital entrepreneurship is an opportune pathway to the greater digital economy for Black entrepreneurs and businesses.
How can black owned businesses leverage that same buying power to maximize the many lessons learned and growth of digital transformation to advance Black-owned businesses? Keep reading…
Digital transformation can mean the difference between staying open and an unexpected closure. Yikes! The pandemic is our biggest teacher considering more than 41% of the 400,000 business closures during the pandemic were Black owned businesses. Digital transformation is a powerful tool for Black-owned businesses to gain deep insight into operations, reach new customers or engage loyal customers, and implement strategy that increases profitability.
We’ve mentioned strategy several times now. Are you wondering where technology comes into play yet? If so, you’re right on track.
The truth is technology is a key factor in supporting a digital transformation, yet there are so many other facets that have to be considered like: YOUR PEOPLE and your business culture.
Nonetheless, Black owned businesses, especially solopreneurs, can consider their buying power, revenue goals, and customers to help determine when to acquire a new SaaS tool or when it makes sense to develop a low code application instead or when to optimize website traffic and so on.
Understanding your ability to support operational or enterprise-wide change, employee proficiency in technology, financial capabilities and customer buying journey is the start.
When should Black owned businesses consider digital transformation?
The average operating year for Black owned businesses in the U.S. is 3-4 years with an average of seven years for the top 100 Black owned tech companies in the U.S., according to The Plug’s Black Tech Effect Report. Black owned small to mid-size businesses across industries should consider the power in digital strategy as soon as possible to help automate processes, gain competitive advantage and profitability, and to capitalize on/multiply the giant that is the Black dollar.
Digital transformation requires an investment in time, money and the right digital strategy vendor, yet the earlier your business starts, the least costly the road ahead will be.
Here are some beginner and affordable steps that Black-owned businesses can take to undergo digital transformation:
Remember: Web 3.0 is available for social media promotion and engagement.
Build or optimize your website: Your website can serve as a digital storefront for a business, a digital interface for customer engagement, or allow customers to learn more about the business and its offerings. It can also enable the business to sell its products or services online, which can be particularly important with different demographics such as Millennials or Gen Z buyers who expect convenience and digital buying options. Optimize your website with proper link attribution and user experience design.
Use social media based on your audience: Organic social media strategy is a free option to help new and rising Black owned small businesses reach new customers, introduce brand, and engage with existing customers. It allows you to have an authentic digital presence for the people who care about your product or service. Platforms like Meta, Tik Tok, Be Real, Instagram, and SnapChat (Web 2.0) or Verasity, Minds, and Telegram (Web 3) can be used to share updates, promotions, and tell a story to help build a loyal customer base.
Utilize strategic digital marketing: Digital marketing (organic or paid) can help bring a story to life, while increasing visibility online through a targeted digital marketing campaign. This can include tactics like ways to fix search engine optimization (SEO), email marketing, pay-per-click advertising, social media strategy, and data analytics to help deliver data-driven decision making.
Implement digital technology within budget: There are so many digital tools available online and for on-premise application to streamline manual operations and productivity, such as customer relationship management (CRM) software, project management software, and accounting software. First, align your digital strategy needs with your budget, customer and employee insights, and business growth goals for the next 9-12 months before choosing the tech stack that meets your immediate needs.
Embrace digital business models such as e-commerce or NFTs: Black owned small to mid-size businesses are growing substantially in the e-commerce sector using a profitable digital business model such as what we’ve seen from Rihanna’s Savage X Fenty brand. E-commerce can enable businesses to sell their products or services with reduced costs, while non-fungible tokens (NFTs) such as digital art or collectibles in edtech systems allow cultural narratives to take shape in an equitable way. This can involve developing an integrated ecommerce website on Wix, selling products on third-party platforms like Amazon or Etsy, or using a blockchain developer platform like Alchemy or marketplace like OpenSea to develop and sell NFTs.
Engage with customers digitally: Black owned businesses that rely heavily on community engagement and social capital such as nonprofits or eCommerce businesses should have a way to digitally engage with customers on a continuous basis. Email marketing is beneficial, yet businesses that determine how to best support the customer or stakeholder buyer/engagement journey can see revenue-aligned success with online forums, chatbots, virtual events, and so on. This captures the community that is already drawn to your brand story to foster long-term loyalty.
How to Embrace a Strategic Digital Transformation in 2023?
Black owned businesses that understand where they are and where they want to go are ahead of the curve for digital transformation. Considering the state of business and what that looks like in six months, nine months, one/three/five years helps leadership embrace the necessity for and strategic application of digital transformation, while reducing costs and increasing efficiency.
However, digital transformation has become a buzzword in recent years, as businesses seek to leverage the latest technologies before taking the time to uncover the impact, purpose, or employee rate of adoption. A successful digital transformation journey in 2023 employs the follow methods and considerations:
Without strategy, without vision...No clear path forward can lead to disaster.
Start with a clear strategy and define the vision. Many are struggling with defining what digital transformation is and what it means in 2023. Before embarking on any digital transformation initiative, it's important to have a clear strategy and vision in place that is communicated with and for your stakeholders. Take a human centered approach to identifying your business goals, understanding the needs of your customers and employees, and assessing the current state of your digital capabilities. You may then prioritize your digital initiatives and allocate resources effectively. Think about it…no clear path forward can lead to disaster.
Embrace cloud computing. Cloud computing and hybrid or multi-cloud business operations such as via Google Cloud has revolutionized the way businesses operate, providing access to powerful computing resources without the need for expensive hardware and infrastructure. Cloud computing helps improve collaboration, scalability, and cost savings, which helps free up valuable resources that can focus on core business activities and growth. Leverage data analytics. Data analytics is 100% necessary to drive valuable insights into customer behavior, market trends, and business performance. Data analytics tools or integrated enterprise resource systems provide a centralized way to identify data trends and opportunities. Making decisions that are not rooted in data is a easy way to lose money and disrupt business continuity. Black owned businesses that garner insight into social capital and from brand equity can easily monetize data into revenue.
Ok great, but where do we begin?
In a nutshell, digital strategy for digital transformation is important for Black owned small to mid-size businesses to remain in operation, remain nimble to change, and to stay competitive. Starting with people, strategy, and data is a great way to begin your digital transformation journey. Here are a few considerations and best practices as you move forward:
Develop customer personas and map the buyer journey.
Consider employee and customer led transformation.
Leverage digital marketing as a steppingstone.
Align roadmap and strategy to revenue goals.
Consider the power of storytelling.
Identify what’s working.
Be truthful about what’s not.
Determine how digital can help improve.
Digital transformation for Black owned small to mid-size businesses helps equal the playing field, close the digital divide, and build digital equity.