As entrepreneurs across the globe work to make sure their businesses come out of the novel coronavirus crisis in tact, Black businesses in particular are facing their own set of concerns.

Speaking with ESSENCE Senior Work & Money Editor Marquita Harris during the ESSENCE + New Voices Entrepreneur Virtual Summit, Chase Executive Christopher Hollins addressed what he believes to be the most urgent matter facing many successful Black-owned businesses in the COVID-19 era. While Hollins acknowledged that the absence of an adequate “rainy day fund” to support a business in times of crisis certainly isn’t a challenge specific to Black-owned businesses only, he also noted that Black-owned businesses do typically tend to have even less cash reserves on hand.

“What I primarily see within the community at-large is the inability to have reasonable cash flow, or to be liquid, for more than a month or two,” Hollins said. “The problem is more acute for Black-owned businesses, which in many cases, don’t have it beyond 20 or 27 days. For many of them, it’s not because they’re not generating the revenue. It’s [because they’re not] recognizing how you need to pay your suppliers and what you need to do with the money that you’ve earned so that you’re creating a cash buffer so that you have the ability for a rainy day fund if something goes wrong.”

Elaborating further, Hollins also cautioned entrepreneurs against being so caught up in pursuing their passion that they forget about managing their cash flow in a way that will sustain the businesses through tough times.

“Unfortunately, because people are so focused on what they have passion about, it’s these financial matters that kind of get in the way of them being able to do what they want to do,” he added. “But, one begets the other. You can’t be focused on your passion and your ability to have your own business, but, at the same time not be minding the store about the money.”

Watch the clip above to hear what else Hollins had to say. For more of everything you missed at the ESSENCE + New Voices Entrepreneur Virtual Summit featuring the New Voices + Target Accelerators Pitch Competition, head over to essencestudios.com.

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