Fixing the Gender Gap Among Minority Entrepreneurs – Next City
The Equity Factor

Fixing the Gender Gap Among Minority Entrepreneurs

Adrienne Bennett owns a successful plumbing and mechanical contracting business, Benkari, in Detroit. (Credit: New Economy Initiative)

It’s a well-documented fact: Minority entrepreneurs face a mountain of hurdles when starting a business, from lack of access to sufficient capital to poor bank services. Now, a new series of reports by the National Women’s Business Council, the U.S. Small Business Administration and Walker’s Legacy, a women’s business collective, hopes to shine a light on how those difficulties slice when it comes to gender. An Oct. 4 release looks at black women entrepreneurs, and it’ll be followed up by reports on Latina women, veterans and women who’ve opened businesses out of necessity.

The report draws stark comparisons along gender lines using 2012 data from the Small Business Administration. It points to the fact that even though black women-owned firms outnumbered black men-owned firms by nearly 500,000 throughout the U.S., the total receipts the former pulled in amounted to $42.2 billion, while the latter took in $100.1 billion.

And despite far surpassing the number of black male-owned firms, black women-owned firms only had approximately 317,000 employees, while black male-owned firms counted 563,000. When it comes to individual payrolls, a 2016 report by the American Association of University Women found that black women made on average 90 percent of the pay that their male counterparts did.

Esther Morales, executive director of the National Women’s Business Council, says those numbers are exactly why her organization launched a yearlong inquiry into women and business ownership.

“We saw that if we didn’t actually try and break [2012 data on women entrepreneurs] data down into subgroups, we’d be missing out on what we don’t yet understand about the different challenges and opportunities each group faces,” she says.

Researchers held three separate events this year in New York, Houston and Washington, D.C., meeting with local black women entrepreneurs, financial institutions, policymakers and others with a stake in helping small minority businesses thrive. Thanks to those who attended and shared their experiences (about 150 people), there are real stories included in the report, bringing a human element to what is otherwise a data-heavy script.

One of the common challenges: not having access to a solid peer group or mentors, leaving entrepreneurs feeling isolated on the path to getting their business up and running in a world that’s male dominated — at least, when it comes to culture and cash flow.

“Even though now there has been an increase in both the opportunity and the experience that black women entrepreneurs have reached, there may not yet be the conveners or institutions or vehicles that actually bring them into context with younger or less experienced women who don’t have access to mentors,” says Morales.

Part of the report’s suggested framework is for historically black colleges and universities (HBCUs) to start including entrepreneurship courses that give students first-hand experience in working with local businesses, and invite black women entrepreneurs — locals whenever possible — to come speak during courses.

Governments can play a role in this approach too. Morales points to what she says is the “first of its kind” city program directed toward women entrepreneurs in Atlanta called the Women’s Entrepreneurship Initiative. It links 15 women-owned businesses with mentors, financial assistance and access to city-funded technologies to help them make their product and business plan as sharp as possible for a 15-month period. With its emphasis on diversity, the program is partly designed to cater to Georgia’s status as having more black women-owned businesses than any other U.S. state.

Other wide-casting recommendations made by the report: encouraging black women to become accredited angel investors, linking black women entrepreneurs to local business associations and, as any self-aware report should suggest, more research into these matters. But even though this is the first step in what the NWBC hails as a yearslong process to outline the struggles women entrepreneurs from all backgrounds face, Esther says it’s enough to know more needs to be done now to correct the gender skew that’s tilting the business world.

“It’s something that we actually have to address, not just something we [report on, then] sweep under the rug,” she says. “We may have been able to guess at some of these conclusions, but when you have it written and presented in a formal way, that’s when people start to take notice.”

The Equity Factor is made possible with the support of the Surdna Foundation.

Johnny Magdaleno is a journalist, writer and photographer. His writing and photographs have been published by The Guardian, Al Jazeera, NPR, Newsweek, VICE News, the Huffington Post, the Christian Science Monitor and others. He was the 2016-2017 equitable cities fellow at Next City. 

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