Black female entrepreneurs are starting up at higher rates than any other group. A new report looks at why -- and examines the hurdles they face in growing their firms.
The 2012 Survey of Business Owners from the United States Census Bureau, a number-heavy look at entrepreneurship in the U.S. between 2007 and 2012, revealed that African-American women are making especially large strides when it comes to starting up. But it said precious little about why.
The Census data show that black female entrepreneurs ran just over 1.5 million firms during that time (putting them at the head of nearly 60 percent of all black-owned businesses), which together contributed more than $42 million in sales to the economy. In all, these businesses accounted for 29 percent of new companies run by women in that five-year period.
To find out what’s motivating this enthusiastic embrace of entrepreneurship, the National Women’s Business Council teamed up with the Small Business Administration Office of Advocacy and the international women’s business collective Walker’s Legacy. They found that black women’s motives spring from a much deeper place than simply pursuing economic opportunity for themselves. Specifically, they sought to forge professional pathways free of discrimination — to open doors not only for themselves, but others as well. The women “explicitly express the desire to support and uplift their communities in the process,” the group’s final report says.
Yet while black women are starting businesses at unprecedented rates and for often selfless reasons, they also face a host of challenges that largely stem from sexism and racism. For example, they have an especially difficult time accessing capital to start up and to expand. The result? Black women may be starting lots of companies, but they aren’t able to grow them as effectively as their white and male entrepreneurial counterparts.
In search of solutions, the NWBC and its partners looked into the history of black women’s business ownership — and they found that an entrepreneurial spirit among black women is anything but new.
“Although newfound attention is being drawn to the rapid increase of black women-owned businesses, when couched within the appropriate historical context, this phenomenon becomes less of a surprise,” the report notes. “Black women have traditionally been a significant part of the workforce, operated their own businesses, and supported their communities for generations.”
The organizations also hosted sessions where African-American female entrepreneurs discussed their experiences. After this listening tour, the researchers came up with a list of recommendations to help black women business owners thrive and expand their ventures. Suggestions included encouraging more wealthy women of color to become angel investors, offering courses on entrepreneurship at historically black colleges and universities, and establishing more mentorship programs designed to address the particular challenges faced by this demographic.
In short, the task now is to stoke the success of this energized cohort of entrepreneurs. “Even with the social changes and advances that the country has seen over the years, there is still considerable work that can be done to support black women-owned business.”
Posted: October 10, 2016