From $0 to $250,000: 5 Black small business owners share how much it really cost to start their business

How much money does it take to start a business? 

Your eccentric uncle says he started his small business with nothing but pocket change and hard work, but your favorite creator on TikTok says they poured their entire savings into their small business. Google that question and you’ll find hundreds of websites and blogs claiming it takes anywhere from $100 to $400,000 or more to get started. In other words, no one really knows. 

But there’s one thing we do know: However much it costs to start a new business, it typically costs Black business owners more. On average, it cost Black business owners $21,000 to start their businesses — compared to $16,000 for their non-Black peers, according to a recent QuickBooks survey. 

Additionally, these aspiring Black entrepreneurs have a harder time gaining access to loans and funding. More than half of Black respondents (57%) say they were denied a bank loan at least once when they started their businesses — compared to 37% of non-Black business owners. 

Despite the added financial hurdles they face, most Black respondents (73%) are optimistic that the Black-white wage gap will shrink in the next 100 years — and that the next generation of Black business owners will face fewer hardships on their entrepreneurial journeys. These business owners agree that mentorship and coaching from Black business owners will have the biggest impact on the success of the next generation. 

Part of that involves today’s Black business owners sharing their business journeys — their successes and failures, their goals and aspirations, and, yes, how much money they started with. There are a few things we as a society have quietly agreed to keep private — and, unfortunately, money tends to be one of those things. But talking transparently about the money it takes to start and run a business, while intimidating, encourages an open dialogue about money for aspiring entrepreneurs. They might just realize they do have what it takes after all.

So, how much money does it take to start a business? We connected with five brave Black business owners to find out. 

Ancient Song Doula Services: $0

Chanel Porchia-Albert started her Brooklyn-based business, Ancient Song Doula Services, in 2008 with $0. “I had no money,” she says. “I literally started in my home.” 

Ancient Song Doula Services offers low-cost and free doula services to women of color and low-income families. “We don’t turn anyone away,” says Chanel. “We support moms through all reproductive health choices and all stages of the reproductive life course.” She was inspired by the beautiful birth of her first child and wanted to create a space where Black women like her could have the same great experience she did. A place centered on care. A place where Black women could share their experiences and find trusted health services. 

Having no startup money wasn’t going to stop her. “I think I earned $150 from my first client, and I just grew from there,” she says. With almost no money or even a solid revenue stream, Chanel moved Ancient Song Doula Services out of her home and into a rental space. “I just told myself I’m gonna make it work,” she says. “And I did!” For her, this was a big lesson in trusting the process. 

Today, Chanel’s biggest expense is her staff. She prioritizes providing wellness benefits and opportunities for growth, and says that’s been one of her best investments. Looking ahead, Chanel has big money dreams. “Within the next five years I’d really love to be in the million-dollar range,” she says, “and be able to buy a building.”

The Pink Hotel: $16,000

Tiffany Young started her Atlanta-based business, The Pink Hotel, 12 years ago with $16,000. “Not enough!” says Tiffany. 

The Pink Hotel is a party hotel complete with a cupcake bar, a salon and spa, a ballroom, a movie theater, and more. Guests can book parties and events at The Pink Hotel, Tiffany and her staff take care of the rest. “I wanted to give women and kids a place to come for self-care, for parties, and to get a little pink in their life,” she said. 

Unsurprisingly, the hotel part of The Pink Hotel has always been Tiffany’s biggest expense. Eight years after starting The Pink Hotel, she made the gutsy decision to sell off all her assets to buy the building. “I sold everything I had and took my entire savings and put it down on this building,” she says. “And I still didn’t have enough, because small business owners never have enough.” But Tiffany believes in making your business work for you—not the other way around. “I couldn’t afford a home mortgage and a business,” she says, “so I live here. My son has a room here, my staff have a room—that’s how we came up with the name!”

With more than a decade of entrepreneurship under her belt, Tiffany is proud of what The Pink Hotel is today. Looking ahead, her biggest financial goal is “prosperity, wherever that leads me,” she says.

The Fresh Food Factory: $35,000

Amanda Stephenson started her Washington, DC-based business, The Fresh Food Factory, three years ago with $35,000. Or as she says, “savings and a credit card.”

The Fresh Food Factory Market sells affordably priced local products that are ethnically infused and made with quality, healthy ingredients. She was inspired to start her business after her father was given a terminal prognosis of six months to a year to live. “He’s surpassed that by 18 years!” she says. “I wanted my community to have the same health outcome my father had. I want them to live beyond their life expectancy and be healthy.” 

For Amanda, the biggest hurdle and expense was buying a commercial property. But for her and her business, it’s well worth it. “This building allows me to have longevity and leave a legacy,” she says, which is just what she wants for her customers too. Looking ahead, she’s excited to continue to build her team, their services, and her assets. 

String Thing Studio: $250,000

Felicia Eve started her Brooklyn-based business, String Thing Studio, with $250,000. “An inheritance from my mom who passed,” she says. “I figured I would do something with it that was inspiring to her.”

String Thing Studio is, at its core, a yarn shop. But Felicia insists it’s more than that. “We’re a community space,” she says. “A rental space for anyone who has creative aspirations.” After her mom passed, Felicia turned to knitting for solace—and discovered a lot of other people in the knitting community were doing the same. “People use knitting to work things out,” she says. “I like to describe it as the yoga of the mind.” So she opened her yarn shop, started knitting, and invited people to join her. “We found a community that helped each other heal at the knitting table,” she said. We’re a close-knit community.”

Today, between classes and workshops, retail sales, and community events, String Thing Studio brings in about $10,000 a month. Looking ahead, Felicia’s big money goal is “to sustain my inventory and employees, and pay myself a nice salary,” she says. 

Trade Street Jam: $500

Ashley Rouse started her Atlanta-based business, Trade Street Jam, with “whatever I had in my bank account at the time,” she says. “Maybe $500.”

Like many aspiring entrepreneurs, Ashley worked a regular 9-5 while she got Trade Street Jam up and running. She had a dream, and she was going to achieve it. Today, Trade Street Jam brings in anywhere from $15,000 to $50,000 a month selling low-sugar, clean-label jams, cocktail mixes, hot sauces, and more. Ashley is proud of her business success—but admits the road wasn’t always smooth. 

“We once invested in a quarterly production run—it was about $100,000,” she says. “Things went wrong and we had to throw the whole production away. We lost a lot of money.” But she didn’t let that financial mistake discourage her from taking risks. “The gutsiest decision we made was ordering $50,000 worth of raw materials from overseas,” she says. “It was so scary, but it paid off when COVID hit and supply chains went crazy—we had what we needed!” For Ashely, running a successful business means trusting your gut. 

Looking ahead, Ashley plans to grow her team and, eventually, sell her business for $100 million. “You heard it here first!” she says.

It’s time for ‘the talk’

Did this article answer the question, “How much money does it take to start a business?” No. But did it convince you that it’s possible to start a business with almost any amount of money? We hope so! 

There’s no definitive playbook when it comes to starting a business (except this one, but we’re biased). Whether you start a business with no money or invest your entire savings account into your big idea, sharing your financial lessons, wins, and losses might just be the inspiration that another entrepreneur needs to go forth and prosper. And a rising tide lifts all boats—three in four Black business owners believe successful Black businesses are critical for a thriving community. 

So go ahead, have the talk. Talk about how much money you had (or didn’t have!) when you started your business. Talk about how much money you lost on a bad decision, and how much money you made when things went right. When we remove the taboo surrounding the money talk, we open the door to honest, inspiring, and transparent conversations. 

Check out more money transparency stories on TikTok or head over to our YouTube channel to see more inspiring stories from Black business owners.