Black female entrepreneurs are launching more businesses today in the U.S than ever. The uncertainty of employment realized when Covid-19 hit, has a lot to do with this new development. According to Harvard Business Review, they established that more than 17% of black females are in the process of running or starting a new business, which is more compared to only 10% of white females. However, the downside is only 3% of these business survives to their maturity and sustainable levels in the long run.
Unlike, businesses started by their white counterparts, black female entrepreneurs have a lot of challenges stacked against them from the onset. These reasons lead to their struggle in business and eventual closure.
Reasons for Venturing into Entrepreneurship
Many times people get into business to strive for financial freedom and the fulfillment of building an empire. The same can be said for black females in the U.S, business provides financial muscle and independence. However, this kind of freedom and independence is pegged on the success of the business.
Unfortunately, the above crop of entrepreneurs who only start businesses to achieve financial freedom, struggle in the long haul. To build a successful and sustainable business, it has to be more than just financial stability. There ought to be a solid problem, the business solves for it to be sustainable long-term.
Despite having a credible business idea and the zeal to succeed in the business world. Black female entrepreneurs struggle more in scaling up their business to higher heights, why is this?
Capital Access Still the Biggest Challenge
There is no denying the importance of capital to any business. Cash flow is the life force of any business, it is the heart and without it, the closure will be imminent. Unlike, white females, who mostly can raise a significant amount with the family series round, black females struggle to do this.
Investors and venture capitalists tend to segregate based on race too. The field is not leveled for both black female and white female entrepreneurs. In addition, black females take a huge student debt to finance their college education. By the time, they decide to go into business, they would have a huge amount of debt to pay.
There is a need to create an enabling platform and support institutions focused on providing financial support to black female entrepreneurs. Institutions like 1863 ventures from Melissa Bradley are needed more today to enhance businesses from minority communities get to be successful and scalable.
Lack of Access to Resources to Aid in Running the Business
Starting a business is one thing and running it successfully is an all different ball game. Not every entrepreneur is born ready and well-equipped with the necessary skills to manage a business. Black female entrepreneurs struggle on this front, with a lack of access to key people and institutions earlier on during the launch of the business. There is a need to equip black entrepreneurs with the following skills; marketing, product development, research, sales, fundraising strategy among others.
There is a key partner currently doing a great job in this area, this is 1863 Ventures. Its
holistic program touches on marketing, sales, fundraising, product among other key subjects. 1863 Ventures seeks to provide the right tools to black and brown entrepreneurs of both genders to help them succeed and grow sustainable and profitable businesses.
Buy from a black woman organization, is also a vital institution, that is solely focused on educating, empowering, and inspiring black female entrepreneurs. The goal of this organization is to create resources and tools geared toward helping black female entrepreneurs succeed in the business world.
What is Your Role
The black female will continue to enter the business world, but how do we support them sustainably? There is a way for everyone to contribute to this and enhance the development of resourceful businesses. The community should be encouraged to buy from black and support their own through and through. It starts with you, before appealing for external support, we have to start by supporting our own.
For your information, Afro Gist Media aims to educate, entertain, and inspire the black community. Afro Gist Media was founded by a black female, living and working in New York City. Support AGM in any way and this will go a long way in enhancing its reach and growth.