For years, Black women have been forward-thinking entrepreneurs who have repeatedly changed the course of history. Research has now shown that Black women are the fastest-growing group of entrepreneurs, but the lack of resources makes their entrepreneurship challenging.
Fastest Growing Group Of Entrepreneurs
According to reports from JP Morgan, Black women own nearly 2.7 million businesses across the United States, making them the fastest-growing group of entrepreneurs nationwide. Despite the impressive numbers, and the undeniable impact of Black women-owned businesses, research shows that Black women are generally underfunded when it comes to getting resources for their businesses. Between 2014 to 2019, businesses owned by Black women grew 50% between 2014 to 2019, which was the highest growth rate of any female demographic.
Exponential Growth
Although Black women are starting their own enterprises in large numbers, experts say that that could be a direct cause of the toxicity of corporate America, especially towards Black women. Tosh Ernest, Head of Business Growth at JPMorgan Chase said that the high rate of Black female entrepreneurship may be a reflection of a general dissatisfaction with traditional 9-5 work.
“High rates of Black female entrepreneurship may also reflect lack of opportunity in the traditional workforce – many start businesses to survive rather than pursuing market opportunities,” said Ernest. “Over 60% spend fewer than 40 hours per week on their businesses, suggesting that they have other jobs or responsibilities that demand their time and attention.”
Hurdles
According to a report by JP Morgan, about 61% of Black women self-fund their startup capital, because of a lack of access to capital. According to the report, Black women find it difficult to get funding, with a rejection rate that is three times higher than that of white business owners. The disproportionate access to capital has resulted in many Black women having to pay for many of their business costs out of pocket.
According to Ernest, investing in Black women requires the right resources that will grow their brand.
“Black women are positioned to play an increasingly visible and important role in the United States’ future like never before,” said Ernest. “To elevate their voice and their careers, and to achieve the American Dream of social and economic equality, we believe that entrepreneurship is key and that we must play our part in targeted efforts that enable Black women entrepreneurs to grow and sustain their businesses.”