We don’t yet know the true size and impact of LGBT entrepreneurs, in part because many don’t disclose their sexual orientation or gender identity. What would happen if that changed?
Editor’s Note: This post is the conclusion of a project on LGBT women business owners. Read more here.
For LGBT women and men, the world can be a hostile, even dangerous place. But an increasingly warm embrace from the American populace has helped turn the tide, improving the everyday comfort and well-being of lesbian, gay, bisexual and transgender Americans — including the business owners among them.
The nationwide legalization of same-sex marriage, coupled with the celebration of “out” celebrities like actor Neil Patrick Harris and athlete Caitlyn Jenner, have helped boost acceptance of LGBT women and men in our society. As a result, more people are feeling comfortable with coming out and living as their true selves, and are even doing so at younger ages.
It’s an incremental evolution that could, if fully realized, have a significant impact on the entrepreneurial world.
The Business of Being Gay
Presently, there are 1.4 million businesses in the United States that identify as LGBT-owned, according to the Small Business Administration, accounting for about 3.7 percent of all U.S. small businesses. And these profitable ventures exist in nearly every industry imaginable — in our brief profile series alone, we spoke with a communications guru, a Google-backed photographer, a renowned education technologist and a wine-savvy serial entrepreneur.
Yet particularly for female LGBT business owners, other “out” entrepreneurial women are tough to come by, and statistics are scarce. Dawn Ackerman, vice president of the Golden Gate Business Association and the cofounder of business supply company OutSmart Office Solutions, offered one sobering possibility for why that is.
“It hasn’t been until recently that LGBT business owners are coming out — they were afraid it could hurt their business, especially the more successful ones,” she says. “If we weren’t coming out, then that made it hard to even make people aware of the fact that LGBT business owners are here, that we’re creating jobs and hiring people in our local communities, and that we want to find growth opportunities for ourselves.”
LGBT businesswomen and men still face unique issues, ones that go a long way toward explaining the sort of reticence Ackerman described (and that others we spoke with also cited). As we noted in the introduction to our series, workplace bias against gay, bi and trans employees continues to be a significant issue. And in dozens of states, those employees can be legally fired if their sexual orientation or gender identity is discovered.
Meanwhile, female LGBT entrepreneurs face potentially worse strains of the usual troubles that come with starting, funding and growing a business as a woman (and as a minority, for women of color). For example, investor, business owner and lesbian Heidi E. Lehmann bemoans the “formulaic” funding habits of venture capitalists, evoking the “white, male, 22-year-olds making a certain type of tech” that we’ve all become rather accustomed to seeing as funding recipients.
But not only is the exclusion of LGBT business owners unfair, it’s doesn’t make sense from a financial perspective.
When it comes to our consumer economy, LGBT households are leading the charge. Not only do these consumers go shopping 10 times more often than the average American household in a given year, they also spend about 7 percent more annually, according to research firm Nielsen. Numerous businesses of varying sizes have responded in kind, making gestures large and small to show consideration for — and solidarity with — LGBT women and men.
The growing power of gays, women and minorities in business calls into question the logic of VCs repeatedly funding the same types of people, Lehmann says, adding, “They’re backing what’s familiar — that’s what it comes down to. What’s going to change the ratio is changing the VCs.”
Making the Business World LGBT-Friendly
Fixes in the vein of Lehmann’s suggestion are already in the works. Laws (such as one in California), policies and initiatives supporting supplier diversity — a business certification program that verifies ventures owned by women, minorities, LGBT persons, veterans and other subsets of the population, then encourages corporations to partner with them and consumers to solicit them — have been a direct factor in the growth of queer-run operations.
And individuals and organizations alike are doing what they can to keep that momentum going, be it through encouraging LGBT business certification, hosting networking events, advocating for business-friendly state and federal policy changes, or simply telling the stories of women and men who are making money and impacting lives through their businesses.
Large corporations are also helping to support LGBT-owned small businesses — a reported one-third of all Fortune 500 companies are purposefully seeking out gay, bi and trans entrepreneurs with whom they can forge vendor relationships, according to a report from The New York Times.
It makes sense — after all, diversity in business ownership is not only good for disenfranchised individuals, but for everyone in our shared economy. It’s a concept we also discussed during our look at the intersections of race and gender in entrepreneurship.
Admittedly, it’s somewhat difficult to measure that impact in dollars in this case, since LGBT-owned businesses have only recently begun to declare themselves, and research into the subject is limited. But there is some evidence of benefits both within and without; a study conducted by the Society for Human Resource Management with Fortune magazine found that diversity positively affected client relations (by 52 percent) and perceptions of corporate culture (by 79 percent).
And anecdotally, business owners in the LGBT community say their revenue figures — and their overall quality of life — are both exponentially improved once they are allowed to live without concealing key parts of who they are.
As Jonathan Lovitz, director of the National Gay and Lesbian Chamber of Commerce in New York told us previously: “Being out in the workplace, and being allowed to be out in your own business, is great for your bottom line, because it allows you to bring your whole self to work. Your productivity goes up. Your wealth goes up. Your ability to personally network with people goes up.”
And, as Ackerman succinctly adds, “The more opportunities we have to help each other, the more we give back — the more everyone moves forward.”
Questions for Tomorrow
What could this mean for our economy? What results might we see from energizing and elevating LGBT entrepreneurs? Given their proven power to influence economic trends, what could this creative, hard-working group of Americans do, if given the freedom to live and lead without having to live in the shadows, without fear?
At present, it’s unclear where this forward motion will take us — but we’re excited to find out.
Posted: September 21, 2015