National Women’s Business Council report documents the experience of black women business owners and the significant barriers that may stem from their historical experience in the U.S.
WASHINGTON –October 4, 2016– The National Women’s Business Council (NWBC) unveiled a new report today detailing the struggle faced by many black women business owners and offering a roadmap of solutions to help the next generation of black women entrepreneurs. Black Women Entrepreneurs: Past and Present Conditions of Black Women’s Business Ownership, prepared for NWBC and the Small Business Administration (SBA) Office of Advocacy by Walker’s Legacy, a global women-in-business collective, details the findings of black women business owners who participated in three research events earlier this year. The report is one of a series of planned NWBC studies into subpopulations of female business owners, which will be released over the coming year.
“Black women entrepreneurs are among the fastest growing groups of women-owned businesses in the country with more than 1.5 million black women business owners in the U.S., making up nearly 60 percent of all black business owners,” said Carla Harris, Chair of the National Women’s Business Council. “But while the success of black women entrepreneurs over the past ten years has been significant, challenges still remain. This important report highlights the strong history of black women entrepreneurship in the U.S., sheds light on current barriers black women face when starting and maintaining a business, and identifies components needed to help them continue to build and grow successful business ventures.”
“Unlocking the opportunities of entrepreneurship for all Americans must remain a national priority, and this study will provide important information to help advance that goal,” said Rep. Nydia M. Velázquez (D-NY), Ranking Democrat, House Committee on Small Business. “I applaud the National Women’s Business Council for commissioning this analysis and look forward to reviewing its findings closely.”
The results of the report stem from three 2016 events organized by Walker’s Legacy and held in Houston, New York City and Washington, D.C. Each event featured black female entrepreneurs, financial services representatives, government officials, business leaders, academics and business service providers, with black women business owners sharing their experiences with the current business environment and its challenges, as well as their path forward. The report presents an analysis of three common threads which surfaced in these discussions:
- Flexibility and Fulfillment – Participants were motivated to start their own businesses for a variety of reasons, including creating generational wealth and a legacy for their children, following their passions, having more freedom and flexibility (including work-life balance), and giving back to their respective communities.
- Access to Capital and Resources – Participants indicated “risk” and “fear” are key barriers to accessing financial capital. Black women business owners describe the process of accessing funds for their businesses as “lengthy” and “exacerbated by a lack of information about available and diverse sources of capital beyond traditional bank financing.” In addition, many indicated that the potential for racism and discrimination is a barrier towards approaching traditional sources of capital. Participants also described the challenges of “not having a seat at the table” or at the “right tables,” as well as not having the social and human capital that would make them privy to key resources.
These successful business owners discussed the fear of rejection and denial in the loan application process; often times it was just “not worth it.” The participants described “borrowing from themselves first” and borrowing from family, rather than seeking traditional funding means.
- Mentorship and Networks – In general, black women business owners report there is a lack of quality, experienced mentors and sponsors who can not only support black women-owned businesses, but also champion their needs.
“Black women play – and have played – a vital role in the entrepreneurial landscape with the U.S.,” said Natalie M. Cofield, Founder and CEO of Walker’s Legacy. “With this report, we’re proud to continue to champion the agenda of understanding, empowering and supporting black women business owners by raising this critical dialogue nationally.”
The report also makes recommendations, some of which are specifically tailored to black women business owners and stakeholders in the small business ecosystem, respectively. Recommendations specific to black women business owners include:
- Diversify: Black women entrepreneurs should continue to seek opportunities to expand their networks and circles, push past boundaries, and broaden their levels of comfort in order to access other sources of capital, mentorship and support.
- Build: By cultivating new relationships with successful businesswomen, black women entrepreneurs would be able to learn from the experiences of these women while running and starting their own business. Resource platforms, like NWBC’s “Grow Her Business,” provide tools to help black women business owners succeed that, when coupled with mentorship programs and self-teaching, can help foster entrepreneurial interest and success.
- Alternate: Black women entrepreneurs should consider seeking non-traditional funding sources, such as crowdfunding. This will allow them to overcome the intimidating, daunting process of pursuing more traditional funding methods.
The report’s recommendations to stakeholders include increasing the number of black women angel investors (affluent individuals who provide financial capital for new business ventures); improving and expanding information and resource sharing targeting black women business owners, including local, community enterprise resource programs; further development of mentorship programs and networking opportunities for black women-owned businesses; and encouraging entrepreneurship programs at Historically Black Colleges and Universities (HBCU), with incorporation of diverse curricula into these programs.
About the National Women’s Business Council
The National Women’s Business Council (NWBC) is a non-partisan federal advisory council created to serve as an independent source of advice and counsel to the U.S. Small Business Administration, Congress and the White House on issues of impact and importance to women business owners, leaders and entrepreneurs.
About the Small Business Administration Office of Advocacy
Created by Congress in 1976, the Office of Advocacy is an independent voice for small business within the federal government, the watchdog for the Regulatory Flexibility Act (RFA) and the source of small business statistics. Advocacy advances the views and concerns of small business before Congress, the White House, the federal agencies, the federal courts and state policy makers.
About Walker’s Legacy
Founded in 2009, Walker’s Legacy is a professional collective committed to the empowerment and support of women of color in business. Its dynamic programming promotes the career advancement, skill sets, and network of women in business and women entrepreneurs. Women who engage Walker’s Legacy are women who aspire to start their own businesses, or are looking to enhance their knowledge of achieving success in corporate America and their network of like-minded progressive women.