Ways to Turn Challenge into Opportunity for Black Women Entrepreneurs
April 8, 2021 | Resources
The challenges women entrepreneurs face in starting, funding, and sustaining their businesses are well documented. However, Black women-owned businesses face significantly more obstacles than their white counterparts and the COVID-19 pandemic has only exacerbated these disparities. According to the Center for Responsible Lending, small businesses owned by people of color were hardest hit by the structural limitations built into the COVID-19 Paycheck Protection Program (PPP). As a result, CNBC reported that 41% of Black-owned businesses closed between Feb. 2020 and April 2020 versus 17% of white-owned businesses.
Even before the global pandemic, Black-owned business were unduly impacted by unfair lending practices. In fact, Black business owners are rejected for funding three times the rate of white-owned businesses due to institutional racism and other lending criteria that’s inherently discriminatory in nature.
With that in mind, we reached out to Meisha Lerato Robinson to discuss the unique challenges facing Black women entrepreneurs today.
Below are some takeaways from the conversation. We invite you to watch the full webinar here.
What’s behind the growth in Black women-owned businesses?
Studies have shown that racism, a lack of on-the-job support, and wage discrepancies, among other things, have led Black women to leave their corporate jobs to start their own businesses. As a result, since the early 2000s there’s been a significant increase in Black women owned businesses.
- Black women represent 42% of new women-owned businesses—three times their share of the female population—and 36% of all Black-owned employer businesses.
- Majority Black women-owned firms grew 67% from 2007 to 2012, compared to 27% for all women, and 50% from 2014 to 2019, representing the highest growth rate of any female demographic during that time frame (source: Forbes)
Why are Black women leaving corporate jobs to start entrepreneurial ventures?
Black women leave the corporate workforce for a variety of reasons including wage discrepancies. However, salary inequity is a significant hurdle when preparing for or embarking on the entrepreneurial journey.
- Based on ACS Census data, the 2021 wage gap for Black women compared to non-Hispanic white men is $0.63 (cents). Caucasian women make $0.79 (cents) compared to non-Hispanic white men (National Partnership for Women and Families)
- Wage secrecy is a problem. It’s important to have a conversation about salary with your peers so you have a benchmark for negotiation. “We actually don’t know (the information) until someone tells us,” Robinson said. “So, you are working, and doing the same work, as your peers and are getting paid less. But, unless we take away the curtain and actually have a conversation and know what people are getting paid – you’ll never know.”
- Research salary benchmarks for your job and industry before you accept the position. This information will provide you with the information you need to negotiate and fight for your worth.
How can Black women connect with mentors?
One of the ways to address the inequalities faced by Black women entrepreneurs is to provide robust mentoring opportunities.
According to a recent article published by Business News Daily, “mentorship is vital to the success of budding Black businesses because it helps combat overarching inequalities in the working world. It also gives Black entrepreneurs access to one-on-one advice and an opportunity to learn from others who learned how to successfully manage and overcome these struggles.”
Below are a few quotes from Robinson about ways to obtain mentors.
- “The opportunities to get mentorship these days are plentiful,” Robinson said. “You reach out to people and watch videos on YouTube and get a lot of the resources you need. I would utilize LinkedIn. I’m amazed how open people are on LinkedIn when you reach out and ask to have a conversation.”
- “I have a lot of informal dialogue and conversations with people on a regular basis,” she continued. “So, when I was thinking about leaving corporate America, I talked to everyone. I asked them ‘what’s their purpose? Who are they and are they achieving their purpose?’ That collection of stories helped motivate and mentor me and gave me models to utilize, helping me continue forward.”
- “Build a community of people around you that you trust and value their opinions. I would work with them to understand where there is a challenge. What is it from my idea that you are missing? (If you are struggling with articulating an idea) figure out your preferred way of communication – written or oral. I would recommend working with someone to help you finesse your idea or concept to something that other people can connect to.”
Meisha Robinson is the Founder, and Chief Executive of Hope of I Am, We Are (IAWA), a US and South Africa registered non-profit, dedicated to empowering youth across Africa. She is also a Community Engagement Manager at UNITE, a growing collaborative of Americans from all walks of life, dedicated to addressing universal challenges that can only be solved together and contributor of the new book – The Call to Unite.
- Black Women Business Owners of America – The Black Women Business Owners of America is a business association that supports African American women business owners, entrepreneurs, and startup founders across the country.
- Minority Business Development Agency (MBDA) – MBDA is the only federal agency tasked with promoting competitiveness of minority businesses.
- Black Girl Ventures – Our mission is to provide Black/Brown woman-identifying founders with access to community, capital, and capacity building in order to meet business milestones that lead to economic advancement through entrepreneurship.
- National Black Chamber of Commerce – The National Black Chamber of Commerce®is dedicated to economically empowering and sustaining African American communities through entrepreneurship and capitalistic activity within the United States and via interaction with the Black Diaspora.
- Visa She’s Next Grant Program – Visa is continuing to take action and remove the disproportionate barriers faced by Black women founders by offering $10,000 and a one-year IFundWomen Annual Coaching Membership to 60 Black women-owned businesses across six key cities in the U.S.
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