There is a huge wealth gap in America, and African American women are at the bottom of the totem poll, with a median wealth of a mere $200.
According to a new report, “While households of color are projected to reach majority status by 2043, if the racial wealth divide is left unaddressed, median black household wealth is on a path to hit zero by 2053.” (The Road to Zero Wealth, 2017)
Entrepreneurship has always been a key driver for building wealth and prosperity in this country and, ironically, African American women "who lack wealth" have been starting businesses at a higher rate than any other ethnic group — at four times the national average.
"For the last 20 years, women of color have turned to entrepreneurship at an extraordinary rate. While the number of women-owned businesses grew 114 percent from 1997 to 2017, firms owned by women of color grew at more than four times that rate (467 percent)." (The 2017 State of Women-Owned Businesses Report, 2017)
Barbara Bamba, Founder & Creator of Startup & THRIVE – The Pre-Launch Accelerator, believes, "African American women are now in a position to close the wealth gap in America — through successful entrepreneurship."
Bamba also knows that the biggest challenge African American women face in building wealth through entrepreneurship is the failure rate among African American owned businesses.
According to a report from the Ewing & Kauffman Foundation: "Black-owned and Hispanic-owned firms have higher failure rates than do White-owned and Asian-owned firms." (Research on Race and Entrepreneurship, 2016)
Here are the top 10 barriers to be aware of that can lead to business failure:
1. Starting businesses out of "necessity" and the need to survive.
2. Entering less profitable markets and generating lower revenues during their startup years.
3. Not knowing where to start, when it come to marketing in this age of too many options.
4. Lack of startup capital in the form of personal savings and family & friends support.
5. Lack of access to investment capital from venture capitalist and angel investors.
6. Lack of adequate networks for building profitable partnerships and win-win relationships.
7. Lack of experience and exposure to entrepreneurship.
8. Lack of mentors who can serve as guides and provide roadmaps to success.
9. Lack of time management, productivity and work/life balance.
10.Lack of support, feedback, community and accountability from like minded peers during their startup years.
And remember: the number one thing we must do to close the wealth gap in America — through entrepreneurship — is startup and THRIVE, because we can't afford to fail.