Black women across America are unique in the business world due to their struggles rooted in systemic racism and sexism, often resulting in a shortage of financing options.
To understand the challenges, Black female entrepreneurs face, begin to get their businesses up and running. We spoke to five business owners with success who discussed how they faced the challenges they faced and also ed suggestions for fellow Black female entrepreneurs.
Business advice for Black female entrepreneurs Due to financing difficulties and other obstacles, Black women entrepreneurs face unique challenges when starting an enterprise. As an example, in a 2021 report by the Federal Reserve Banks of several cities, the average Black entrepreneur submitted more applications for assistance with financial startups than other groups. But, Black entrepreneurs were half less likely to get full approval from small-business loans and other sources of business financing.
The experience of other successful business owners is among the most effective methods to overcome obstacles and realize your potential as a new entrepreneur. If you are already running your own business or are looking for some inspiration for starting your own, Here are some tips from Black female entrepreneurs.
1. Make sure you have enough money saved before reaching for investors.
Before embarking on her entrepreneurship journey with her husband Daniel, who was launching the company that makes scented candles, Tiffany Griffin pursued a profession in academia and policy-making. While focusing on distributing information and bringing about positive changes, she was determined to increase awareness of the Black experiences. Today, her company does precisely the same thing, incorporating scents influenced by the African diaspora and naming the candles in honor of Black pioneers and many others.
Being she describes herself as a “social entrepreneur,” Griffin declared that she would like her products to stir the memories of conversations and stories regarding Black culture. Although her goal in business was to help others on a social and cultural basis, she also discussed Black cultural issues; it was exactly what she felt was a hindrance in her pitch to investors in the business sector. The funding she received was frequently contingent upon compromising the fundamental values underlying her product based on race, an issue that Griffin and her husband both found alarming.
When Griffin and her spouse had a position of financial stability that allowed them to remove investors from their portfolios, they also acknowledged that many companies could compromise the core values they hold to keep on the right track. To prevent yourself from facing this scenario, Griffin suggested saving up the necessary capital before starting your venture to ease the burden of operating costs and startup costs.
“With financial stability comes freedom,” she added. “We’ve also learned how to plan and plan even … as well as adhere to the values you hold dear. We are adamant about our beliefs, and that’s why we strive to do the right thing.”
The lessons: Griffin advised emerging Black women entrepreneurs to save their money before starting their businesses to ensure they won’t depend on investors that may need them to make fundamental modifications to their companies.
Did You Know?
Finding funding can be a problem every female entrepreneur faces. Experts advise women entrepreneurs to request more funds than they require to ensure they receive funding in lower quantities than they ask.
2. You can charge what you’re worth.
After a few years of working in the corporate world of America, Janna M. Joyner figured out that she would like to establish a creative marketing agency. Agency. The fact that she was not given an increase and was told the business had no funds for an increase in wages forced Joyner to step away from the company’s politics and create her own company, Leap Innovative Group. While she knew the field, Joyner said she found it difficult to determine rates for herself since she could not speak up on her behalf.
After lowering her prices over time, Joyner eventually realized that the connection African Americans have with money at a cultural level is different compared to white business owners. This creates a disjointed view of what is worth.
“Our white counterparts are used to having capital, used to pricing themselves higher, and had the confidence to stand behind their prices, even when they were higher than the market rate,” Joyner said. If they could rely on their price and stand by their prices, then why wouldn’t I? I’m confident in my knowledge … and therefore, I must also feel sure I’m worthy of the cost I negotiated for it.”
To overcome this fear of being insecure, Joyner welcomed the counsel of white mentors, whose wisdom and faith in the value of money led her to boost her fees. Joyner realized that she was certainly worth the rate and felt comfortable studying the market average. For this reason, she advised Black women who run businesses to be wary of taking criticism personally. When clients say “no” to your rates, according to her, it indicates the price they’re willing to pay, not the services you provide.
“My clientele now consists of businesses who understand the value I bring and are happy to pay what I’m worth,” Joyner stated.
The lessons: Joyner encouraged Black female entrepreneurs to be cautious about undervaluing their services through market research and understanding their services’ value.
Tip
Low prices may turn away clients. People often think you will get the value you pay for and consider costs at a bargain unimportant and cheap.
3. Get your products sold early.
She graduated 2008 from Stanford University in 2008 and later completed her MBA at Harvard in 2016. Houston-born Britney Winters thought that she was heading toward bigger and better opportunities and a life of business achievement.
But, after a couple of years working in investment banking and the fossil fuel sector, she realized that she “never could bring my true self to work.” This self-declared lack of responsibility for her work path led her to pursue business entrepreneurship, which led her to establish her own hair extension company and business, a wig manufacturer Upgrade Boutique.
After a decade of experience as a full-time business owner, Winters said the most significant problem she had to overcome was obtaining money for her venture. While many small and medium-sized businesses can find the initial capital via family members and friends, this option may not be for Black entrepreneurs. Based on data from the Federal Reserve Bank of Boston, the white family has an average of over four times as many assets as Black families.
Although she’s received financial assistance, Winters said she also had to deal with funding issues when she sold her items during the early stages of her company. After establishing the pop-up shop and selling her products within three hours, she raked in some cash and started building a customer base. Although it wasn’t relatively as high as she had hoped for, Winters said it was her motivation to push toward her goal.
“I think we kind of want the ideas we have to be perfect before bringing it to the market, but I learned that you have to work with what you have,” she explained. “Sometimes it’s difficult to get capital access, and so you need to determine the most fundamental prototype of what you could present … to gain entry into the market. After that, you can work toward developing it to your vision.”
The lessons: Winters urged business owners to get the most value from their money by beginning small and then selling their goods in the early stages of their business. This is aiding them in growing the number of customers they serve and earning additional capital to invest back into the company.
4. The network can help you gain clients as well as coaches.
Although white men have held the upper hand in celebrities, sports, public relations, and communications for a long time, LaTonya Story has carved her way to a successful profession in this field. She owns LPS Consulting PR, a private marketing and public relations firm with a portfolio of today’s top talent. Story was a part of several famous athletes, such as Michael Vick and Dwight Howard. She has also received numerous awards from the industry, such as The Women in PR Trailblazers Award.
Although she’s today regarded for her business acumen, Story said she started with having to be more ambitious than white males to establish herself. When she began her career in PR around two decades ago, the sole Black female in the industry had been Marvet Britto, founder of the Britto Agency. The Story used her networking capabilities to overcome that obstacle to get one of the initial clients. Using “word of mouth, social media, and traditional pitching,” she could bridge the gap between herself and the established PR experts.
With their assertiveness and determination, Story said most Black female entrepreneurs could find potential mentors or clients by “not being afraid of reaching out to people.”
“My first opportunity came by calling a radio ad that I heard for the Allen Iverson Celebrity Summer Classic,” she stated. “I volunteered for two summers in the public relations department, which allowed me to network and meet professional athletes, one of which took a chance on me and became my first paid client.”
The lessons: The Story stressed the importance of networking when seeking new customers and mentors. The author advised young Black female entrepreneurs not to hesitate to try new things and reach out to those they want to collaborate with.
Key Takeaway
An experienced PR company can assist businesses in overcoming and resolving PR issues which include negative customer reviews, executives scandals, and security breaches.
5. Conduct market analysis.
As a Black American woman, becoming an event organizer in Dubai was a natural job option for Genera Moore. But, following several years of planning large popular social gatherings within”the “City of Gold,” Moore succeeded with a brand new business usually run by white males auto parts.
As the founder of Motorparts Nation, Moore distributes auto parts to mechanics from Ghana. She discovered her passion for international trade while working in Middle East countries, Middle East, Moore said that she began working with auto parts following an analysis of the market and determining which areas needed auto parts the most. Although her professional experience has led her to areas of the globe that Black women aren’t as prevalent as other races, She said that in the end, she was able to count on her race as a “superpower.”
“Being a Black woman has had a lot of advantages, even living in the Middle East,” Moore stated. “I consider myself to be trustworthy and honest and adhere to my plans in executing precisely what I stated I would achieve. It’s what I do best.”
Moore discovered that being a Black woman of color, she could contribute to the lives of communities needing the most significant aid. According to Moore, this group of people includes the citizens of Ghana as well as, in particular, the auto mechanics from Ghana.
“Black women reinvest in the community, and we don’t just focus on our household — we focus on how we can collectively do things to empower someone else or connect with someone else,” she said. “It might sound as if my business is merely auto components, but if you examine the 10 most prevalent health issues that result in death in Africa, the road-related injuries rank close to malaria, AIDS, or stroke. … I’m a business will change that through training mechanics to make roads safe.”
The takeaway: Moore recommended finding a new business by conducting studies on the market and finding communities that require assistance.
Tip
In addition to carrying out market research, owners of businesses may also use business surveys to create leads and evaluate the brand’s reputation and satisfaction of customers.
The reason Black businesswomen need guidance and mentorship
It is still difficult to start a business with Black women. While pursuing more advanced education than women from other minorities, they need guidance in navigating the difficulties of establishing and expanding a business, including getting approval to receive funding.
“Black folks have less access to high-worth networks and information, and access like that is pivotal and, in some cases, becomes mandatory for success,” Griffin said.
Mentorship is essential for the growth of new Black firms because it can help combat the underlying inequities in our society. This also allows Black entrepreneurs to receive one-on-one guidance and share knowledge with others who have succeeded in managing and overcoming these challenges.
“I have the responsibility to share what I know with other women,” Joyner stated. “My company hires Black women from colleges since I know how difficult it is. I wanted to offer the women a secure environment where they could grow and learn and not let their mistakes negatively affect them professionally. I wanted them to have the opportunity to claim that they do not understand something.”
Key Takeaway
Black female entrepreneurs could get advice and mentorship from successful business owners who can aid them with the challenges of finding funding and networking.
Statistics about Black female entrepreneurs
The ongoing issues of racial inequity that span centuries and still raging in contemporary America are not hindering Black women’s business-minded spirit. According to an American Express report, Black women make up 42 percent of the new female-owned firms, even though this minor category is just 14 percent of the female populace. Furthermore, research from Harvard Business Review found that 17 percent of Black women have businesses or are currently beginning one, compared to 15% of White males and 10% of White females.
Between 2021-2023, Black female-owned companies grew by 50 percent. This is the most significant proportion of women in the female demographic. Many of the entrepreneurs we spoke to believe that an important reason for this growth is because Black women are a highly creative and adaptable bunch of people who don’t hesitate to try new things.
“This makes them incredibly brave and pushes them to take leaps,” Griffin stated.
Education can also have a crucial role to play. As per the National Center for Education Statistics, Black women earned 13.6 percent of associate’s degrees, 11.4 percent of bachelor’s degrees, and 13.4 percent of master’s degrees in the school year 2021-2023. These advanced degrees will give entrepreneurs the foundation and skills to create and run businesses independently.
Did You Know?
Black women have been the driving force behind several companies changing how we talk concerning women’s health. One example is Health in Her Hue, a platform that connects Black women and females of color to knowledgeable and compassionate healthcare professionals.
Controlling business ownership in an individual minority
In the process of seeing more Black women take on the entrepreneurial role, They are gaining ground as a significant category of entrepreneurs. Finding funding for their business, keeping them operational, and serving their clients need a specific method and determination. The reward for accomplishing something as huge as running a profitable business will be enough to be worth the effort.
