Black Americans are spending more on beauty products and services than ever before. According to Nielsen IQ, Black consumers spent $8 billion in the last year on beauty products, but high profits are hard to come by for small business owners.
A salon owner in Atlanta found success is possible with persistence and community.
"I love what I do. I always knew that I wanted to be in the hair industry," said Lawanna Gray, the owner of A Step Above the Rest Salon in Atlanta.
Owning a space has been a dream decades in the making for Gray. Following in the footsteps of her mother and her grandmother, Gray earned her cosmetology license and started learning the business early.
"A lot of my initial beginnings of business was watching the strong women around me, and I watched how they handled business," said Gray.
She studied entrepreneurship while learning her craft and saved every penny to open her own salon.
"I opened out of pocket," said Gray. "It's long days, long nights in the salon, and not having the resources available. You go to banks and they're like, 'No', you know, and I have a business plan, I have all of this, but they're not approving you."
Gray's experience is a common one. Black entrepreneurs face more barriers than their white counterparts in opening businesses across all industries.
Black-owned businesses saw post-pandemic boom, but challenges remain
Data shows the number of Black business owners in the U.S. was 28% higher in the third quarter of 2021 than it was pre-pandemic.
Research firm Crunchbase found just 1% of venture capital dollars went to Black businesses in 2022. In 2021, only 27% of Black loan applicants were fully approved for financing compared to 52% of white entrepreneurs, according to the National Minority Supplier Development Council.
Gray said she has struggled for years to get funding, loan approvals and grant money.
"You make it so tedious that it'll make you give up. The beautiful part about me is I'm persistent. I'll keep filling out grants. At some point, you're going to tell me, 'Yes.'"
She hopes her persistence and success will inspire others to not give up. Gray now travels the country for fashion weeks and beauty events and to train the next generation.
She knows there is money to be made in the beauty space, despite the disparities that still exist.
A McKinsey study reports, Black-founded and owned brands make up only 2.5% of revenue in the beauty industry — yet Black consumers are responsible for 11.1% of total beauty spending.
"There's growth and there's expansion, but there's still, again, a mindset shift that has to take place," said Gray. "Black women, Black men in this industry, we're still experiencing a very large financial gap between our counterparts."
Gray said fixing these gaps starts with investment from neighbors and leaders alike.
That's why she helps up and coming stylists however she can, especially when it comes to learning the lesson that: success is not made alone.
"You wonder where a lot of my spirit and my using my words came from. It came from her," said Gray of her client.
Linda Proctor-Merritt has been a client of Grays for years. They each help one another to grow their own business ventures.
"I can't remember a time that she wasn't doing my hair. It's almost like having a good friend," said Proctor-Merritt. "For those, of course, who want to start out as young entrepreneurs, this is where they could end up when we support them."
Proctor-Merritt said she hopes people recognize the strength and passion behind Black owned businesses like Gray's, and that we can all play a part in putting the next generation, like the name of this salon: a step above the rest.
