Black Women Are Starting Businesses At A Faster Rate Than Any Other Demographic
The Black woman can.
Black women are starting businesses quicker than anyone else despite the hurdles they face.
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WSB-TV spoke to two women who took advantage of the initiatives dedicated to dedicated to helping women learn the ins and outs of starting a business.
Jamine Morton, founder of Skylar Security, joined the the Women’s Entrepreneurship Initiative a few months after she quit her job as a police officer. Before she got into the 15-month long program, Morton was stretched thin after she provided security for the Super Bowl.
“I didn’t have a life. I think I probably lost some hair through the process,” she recalled. “(It was) an incredible opportunity.”
WEI helped Morton immensely.
“They literally do grab you and support you and say, ‘How can I help?’” Moton said.
Candice Jordan is the founder of a home decorating tech company called Love Home. She started her business with her own money. Now, she’s getting help from The Big Incubator, a nine-month mentorship program for female entrepreneurs.
“Because being an entrepreneur is not easy,” Jordan said. “So, you need to have someone in your corner who will continue to push you past that wall.”
Black women are starting businesses at a faster rate than any other demographic, according to Entrepreneur magazine. Additionally, Black women are the only race of women who outpace their male counterparts. The number of businesses started by Black female entrepreneurs increased by 163% between 2007 and 2018. Despite these accomplishments, Black women-owned businesses face a specific set of hurdles.
They are less likely to receive funding compared to other demographics. Black women only received .0006% of the $467 billion awarded to tech start-ups since 2009. According to a report from the Federal Reserve Bank of Kansas City, 40 percent of Black women who apply for financing don’t receive any money, twice as much as white women.
When they do receive investments, the average is only $42K, way lower than the $1.3 million average.
Natalie Madeira Cofield, founder of women’s networking organization Walker’s Legacy, believes the rejection comes from a lack of diversity among funders.
“People invest in people they feel connected to, and the majority of those in power don’t necessarily get a Black woman,” she said. Black women also suffer from a lack of resources from their supporters.
“Even if they’re middle-class or upper-middle class, they are often providing some kind of financial support to a brother, cousin, parent, or auntie in crisis, or a community group they support, and they just don’t have the disposable income to invest in your business dream. Nor can they quit their jobs to do it,” Cofield added.
Still, Black women are starting their own hustles because working a full-job isn’t a walk in the park either, Forbes reports.
The Federal Reserve Bank of Kansas City report noted Black women venture into entrepreneurship because they experienced “poor treatment and the perception of being undervalued in the workplace.”
“It’s pretty evident that one of the primary reasons for black women to start businesses is frustrations on the job,” said Dell Gines, one of the authors of the report. “They feel they can’t get anywhere. We have been to seven cities doing the outreach and talked to a lot of black women. There’s a feeling of being passed over for promotions, a sense of workplace fatigue, of being asked to train people to be their boss.”
Mentorship programs, like The Big Incubator and WEI, and pitch competitions are essential for entrepreneurs who lack access to more traditional means of funding. Gines believes Black women “don’t know who to go to, where to go and what organizations are out there that can support them.” This leads to “clustering in very few industries with a low barrier to entry — service businesses such as hair salons, catering, child day care centers and consulting."
Gines believes this will change as Black women become more knowledgeable.
“You are going to see a rise in black women doing business in professional services with the rapid increase in education levels for black women and their increased participation in the labor market, in fields such as accounting and engineering,” he said.