Black Women Face So Many Obstacles To Getting Businesses Up And Running It’s Amazing There Are So Many
One of the hardest parts of being an entrepreneur for many is getting startup funding. But this seems to be hardest for Black women, despite the fact that Black women entrepreneurs are the fastest growing business owners in America. In fact, Black women own 58.9 percent of all Black-owned businesses.
But according to a new report by the National Women’s Business Council, prepared by Walker’s Legacy (created in honor of Madam C.J. Walker), Black woman face so many obstacles to getting their business up and running it’s amazing there are so many. Black female entrepreneurs have to struggle with not only a lack of capital, but also a lack of mentors, an inadequate network, and, of course, discrimination.
Even though there are so many businesses owned by Black women, they (along with most businesses owned by women of other races) make less money than those of men in their same demographic. The average Black-owned business racks in less businesses than those owned by whites as well. “The average Black-owned business has revenues of $58,119; the average white-owned business has revenues of $552,079. The average business owned by a Black woman has revenues of $69,101, while the average business owned by a white woman brings in nearly three times as much–$189,037,” reported Inc.
This could be one reason why venture capitalists aren’t attracted to assisting Black female-owned ventures. Banks, too, are hesitant to lend money to Black women, and this has a lot to do with the median net worth for a Black family, which in 2011 was just only about $7,111, versus $111,146 for a white, non-Hispanic family and $8,348 for a Hispanic household.
The lack of a great social network plays a part as well. The fewer people you have in your circle who can help you get funding, the less likely you will get it. Sometimes it’s all about the “hookup,” and Blacks in the U.S. have few financial hookups. “Given that most Americans do not have strong social networks that cross racial lines, that makes it almost incomparably harder for a Black woman entrepreneur to raise a friends-and-family round than it would be for a white woman entrepreneur,” Inc. pointed out.
So what’s a Black women with dreams of opening her own business to do? The report not only includes dire stats, but also recommendations to help Black women entrepreneurs to get the necessary funding. “One is for those women to seek out nontraditional and alternative funding sources, such as loans from Community Development Financial Institutions and microloans,” Inc. stated. “Another is continued and increased support for community-based business resources such as Minority Business Development Centers, Women’s Business Development Centers, and Small Business Development Centers.”