THE RISE OF WOMEN OF COLOR ENTREPRENEURS:

Women in the United States have increased in economic mobility over the last several decades. We earn the majority of college and graduate degrees. We make up over half the workforce. We account for more than half of all professional and managerial positions. Yet, despite our greater educational achievements and increased work participation, we still face economic inequities. 

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Take, for example, the wage gap–for every dollar a man earns, a woman earns an average of 82 cents.  That’s if you’re a white woman.  The wage gap widens if you’re a black woman (66 cents for every $1 earned by a non-Hispanic White man), Native American (59 cents for every $1 earned by a man), or Latina (57 cents for every $1 earned by a non-Hispanic white man).  Some of the factors affecting the gap include:

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AGE

As women age, their pay relative to the pay of a similarly-aged male decreases. This is seen most sharply between ages 35 and 44. 

PARENTHOOD

Mothers with children at home tend to participate less in the workplace while their children are growing up, and thus may earn less.

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OCCUPATIONAL SEGREGATION

Women tend to cluster in occupations that pay less yet are considered essential occupations (e.g. retail, food service, education, hospitality). These same occupations were disproportionately affected by the pandemic, and in many instances have not fully recovered. 

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CAREGIVING RESPONSIBILITIES

Women still shoulder most of the caregiving responsibilities at home, including caring for minor children, sick spouses, and elderly parents. 

 

Perhaps these are some of the reasons why 1,800 new women-owned businesses are started every day. For many women, having the freedom to make their own hours allows them to balance work with family commitments, self-care, and leisure activities. However, economics is not the only motivator for these women business owners. For example, many women have a creative drive and a desire to express their individuality while challenging traditional gender roles and expectations.  

Whatever the reasons, the reality is that currently, about 42% of all U.S. businesses are woman-owned. Of those, 50% are owned by women of color (WOC). Not surprisingly, though, being a woman, especially a woman of color in business, comes with its challenges. 
Here are some of the biggest ones, according to recent data.   

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1. Limited access to capital—WOC business owners are likely to encounter, not only gender discrimination, but also face discriminatory policies and practices when it comes to securing capital to start up their ventures.  As a result, a significant percentage of —black and brown women entrepreneurs self-fund their startups. 
    

2. Prejudice from Conventional Lenders—Only 2% of venture capital is awarded to women-only founding teams.  Black women business owners are rejected by lenders three times as often as white business owners.  For other WOC, such as some Hispanic women, there can be the added barrier of not speaking, reading, or writing in English, which may get in the way of accessing loans or grants.
    

3. Lack of support—Support in the form of mentorship and advice is often a critical factor in business success. Research shows that mentored entrepreneurs raised seven times more capital and had 3.5 times more business growth than unmentored entrepreneurs.
    

4. Burnout—This is defined as “chronic workplace stress that has not been successfully managed.” Running a business is certainly a stressful endeavor, especially in the beginning and especially as a solopreneur.  Layer this on the chronic stressors of managing everyday life, parenthood, finances, health issues, etc., on top of sexism, racism, and discrimination, and it’s easy to see why burnout has become so ubiquitous among WOC business owners.